Now That We Know The Telcos Exaggerated About The 'Spectrum Crunch'; How About Some More Open Spectrum?

from the pretty-please? dept

For years now, the big telcos have been whining and complaining about a supposed "spectrum crunch," saying how they were going to run out of useful radio spectrum and wouldn't be able to set up new wireless services if they couldn't control more and more of it. And yet... as FierceWireless has noticed, the big guys all seem to think they have plenty of spectrum now:
Executives from the nation's largest wireless carriers now seem to be pretty pleased with their spectrum positions. AT&T CEO Randall Stephenson recently said the carrier has a solid spectrum position for the next three to five years if it gains approval for its pending spectrum purchases. Verizon Communications CFO Fran Shammo said that with its recently completed $3.9 billion purchase of nationwide AWS spectrum from cable companies, Verizon Wireless now has enough spectrum to handle its capacity needs for the next four to five years. Sprint Nextel CEO Dan Hesse said the carrier's Network Vision plan will give Sprint a strong spectrum position through the end of 2014 and that date will be extended to 2016 with the addition of spectrum from Clearwire. And T-Mobile USA CTO Neville Ray said the carrier is busy refarming its 1900 MHz PCS spectrum and now has enough 1700 MHz AWS airwaves to deploy 10x10 MHz channels across 90 percent of the top 25 U.S. markets when it launches LTE next year.
The report quotes analyst Tim Farrar explaining what many had been arguing for years -- that the so-called "spectrum crunch" was basically a myth to get access to and control of ever-greater swaths of spectrum to keep it from others:
"I think it [the spectrum crunch] was overblown. And everyone had an interest in pumping up a spectrum crisis," said TMF Associates analyst Tim Farrar. He said the FCC wanted to promote itself as the agency that could spur innovation and expand broadband access; Verizon and AT&T didn't want the FCC to cap the amount of spectrum available to them; companies that speculated with spectrum did not want the market to think they had worthless assets; and smaller carriers wanted more spectrum on the market to lower the price of all spectrum. "Everybody had an interest in talking it up and no one had an interest in saying the emperor has no clothes," he said.
And yet... one area where spectrum could be really useful? New open wireless offerings. But there we're left stranded. Rather than looking for new ways to provide open spectrum, the government has continually focused on figuring out ways to give more to the big telcos. In fact, just as I was finishing up this story, I saw reports on the FCC's new plans to release more spectrum -- but most of it via auctions. Very little appears to be ticketed for openness. Unfortunately, part of the problem is that the government seems to value spectrum solely based on how much someone will pay for it -- rather than the beneficial uses it might create. Thus you have fewer advocates willing to "pay" for open spectrum, and many who don't understand the importance assume that open uses have no value. This, of course, ignores just how much open spectrum has enabled, from cordless phones to garage door openers to really powerful things like home automation and WiFi.

So, if we can see that the big telcos' current spectrum appetite is satiated, and we can recognize how much open spectrum can enable amazing new innovations with tremendous benefit way beyond the price of the spectrum, shouldn't there be a big focus on getting more open spectrum out there and available for use?

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  1. identicon
    Ed C., 6 Oct 2012 @ 9:13am

    The same old game

    Wireless is just going to fall into the same vertical integration pit that continues to plagued phone and cable for decades. The problem is, when a single company is given a monopoly over utilization of the infrastructure, whether it's cables or wireless spectrum, the end result simply cannot turn out any other way. Since the monopoly will only pursue avenues it thinks are profitable, leaving many others left unexplored, the infrastructure can never be used to it's full potential. The monopoly will have no other way to recoup its investment cost than to charge high fees for its services. Of course, the freemarketeers will simply chant that competition will solve everything, but when all competitors use the same strategies that underutilize their own costly private infrastructure as everyone else, there is almost no path to lower cost.

    But there is another way, simply don't allow vertical monopolies in the first place! By simply separating infrastructure and service providers, other companies that don't have such a singleminded vision would explore and develop those other avenues, while the infrastructure provider charges for access. This is why the internet, with its sharp division between infrastructure and service providers, is innovating at a breakneck pace, while the legacy vertical monopolies, such as wireless and cable, continue dragging their feet at every step and charge high prices for poor service. As long the government keeps giving preferential treatment to these same vertical monopolies, NOTHING will change.

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