Dealing with the Spectrum Crunch

How spectrum will be shared by the Department of Defense and by commercial users — and even if it will be at all — is a sticky topic that was described in a well-done piece by Marguerite Reardon at CNET.

The basic problem is, of course, that we are running out of spectrum and must find creative ways to keep up the supply as the growth of mobility continues to accelerate. Reardon’s report focused on a keynote at the CTIA Mobilecon conference last week in San Diego.

The government is trying to deal with the issue. For instance, a plan aimed at frequency sharing that was created by the President’s Council of Advisors on Science and Technology (PCAST) has been adopted by the FCC. At the end of the day, much of the sharing will need to be done by the DoD, which is the largest holder of spectrum in the U.S. The question comes down to both how to do this and whether commercial entities are on board with approaches in which they do not control the spectrum outright.

A main challenge is that it is vital and very hard and expensive to move DoD services in the preferred spectrum, which is 1755MHz to 1855MHz. Reardon describes three ways in which the government and commercial interests can share the spectrum. The problems include the fact that the more sophisticated of the approaches may be beyond the abilities of all but the biggest carriers. An even greater impediment is that the commercial players may simply not be interested due to the uncertainty of sharing quarters. Reardon runs down the main points in the article, which is well worth a look.

Spectrum to carriers is like water to farmers. How much a company holds and how much another company is willing to fork over in order to get its paws on it are drivers of some deals that have happened or are in the rumor mill.

In what would be a major blockbuster, the Nikkei newspaper reports that Softbank is in talks to acquire Sprint Nextel, which is the third largest carrier in the United States. Softbank also is said to be interested in adding spectrum held by Clearwire, which is half owned by Sprint. Spectrum is key, Seeking Alpha wrote:

While smartphone makers and subscribers may come and go, spectrum may be seen as a more static commodity. Moreover, the use and need for spectrum is still young and growing. As LTE advances and smartphone penetrations proliferates, use of spectrum is likely to grow and the value of unused and underused spectrum should appreciate.

There are various reports that follow the musical chairs involving several carriers. The drivers of these, too, involve access to spectrum to at least some extent. T-Mobile has announced a merger with MetroPCS. Computerworld has a story that suggests Sprint may be thinking of making its own bid for MetroPCS, but Bloomberg quashes that possibility, at least for now.

The Reardon story and the rumors about possible acquisitions are both complex, in their own ways. The bottom line is the same: Mobility is increasingly quickly and, if anything, that growth is accelerating. Elements necessary to sustain that growth, such as cell towers, are vital. But they can be had. The most precious commodity is spectrum. Adding spectrum and developing ways to squeeze more out of what already is on hand will be vitally important as the future unfolds.