Verizon Makes It Very Clear Its 'Spectrum Crunch' Never Existed

from the chicken-little dept

If you recall, the wireless industry has spent much of the last decade proclaiming that a "spectrum crunch" was afoot, declaring that unless the government did exactly as requested, wireless growth and innovation would grind to a halt. AT&T was quick to claim that it needed to buy T-Mobile because of said spectrum crunch, though the company's own leaked documents highlighted that this simply wasn't true (this hubris being a big reason the deal was rejected). Verizon has also spent years crying spectrum poverty when convenient, despite repeated analysis showing its holdings lead the industry.

Yes, there is finite spectrum, but as with all network capacity constraints this has increasingly been mitigated by Wi-Fi offloading, new technologies and smart engineering (not to mention unlicensed options and technologies we haven't even conceived yet). If there is a "spectrum crunch," it's predominantly among smaller competitors that lack the resources to buy huge swaths of spectrum, or the political power to get regulators to tilt the entire playing field (and spectrum auction process) in their direction. Of course, both AT&T and Verizon have breathlessly and repeatedly denied that they warehouse extra spectrum to help keep would-be competitors at bay.

After years of warning of spectrum armageddon, Verizon's again making it clear that the entire spectrum crisis was contrived nonsense. After nabbing another $10.4 billion at the recent AWS-3 auction, Verizon CTO Tony Melone this week stated that despite years of claiming spectrum poverty, Verizon never really felt pressured to buy such a huge swath of spectrum:
"In a conference call with investors, Tony Melone, Verizon Communications' executive vice president of network, said that "entering the auction there was no markets where we felt compelled to acquire spectrum, irrespective of the price." Verizon did not feel pressure to aggressively bid for spectrum because it already had at least 40 MHz of AWS-1 spectrum in many U.S. markets, especially in the eastern United States, Melone said."
It's always kind of amusing when the network guys forget to adhere to narratives set by the policy folks (like the Verizon CFO's recent slip up in admitting Title II isn't a big deal). But Melone's comments are a far cry from claims made by Verizon's policy blog just a few years ago, when the company was trying to get regulatory approval for a huge co-marketing deal with the cable industry:
"Rather than waste time arguing about spectrum efficiency, let’s focus on the issue on which we all agree: America’s wireless consumers face a spectrum crunch that won’t be relieved by Verizon’s spectrum purchase. It’s up to the industry, as well as policymakers, to help ensure that more spectrum reaches the marketplace soon, so America’s wireless industry remains the global leader in innovation that it is today."
Said spectrum crisis seems to materialize out of thin air when Verizon needs something, then just as quickly disappears when the company candidly decides to talk about its holdings. Of course, Verizon gets away with this kind of stuff, in part, because the tech press (with the occasional exception) loves to regurgitate company claims unskeptically. And if you've been paying attention, you'll note that congestion has long been a useful bogeyman to scare regulators into bending rules to the benefit of the biggest, least competitive companies. Remember the Exaflood? How about usage caps? Does anybody notice a pattern?

With Verizon's bloated belly full from the recent AWS-3 spectrum purchases, and new technologies constantly evolving to more than meet mobile network demands, that should be the last we hear about Verizon's spectrum shortfall for a long while, right? Of course not. The big telco threat these days is that if the government imposes tough net neutrality protections, we'll see a dramatic decrease in innovation and network investment leading to (you guessed it) network performance and capacity issues (though we've illustrated how these claims too are bunk).

You'd think we'd reach a point, after so many years of false claims, where the press would no longer just take the claims of lumbering, bloated duopolists at face value. If there's a crisis, it remains a crisis of critical thinking.
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Filed Under: antitrust, competition, spectrum, spectrum auctions, spectrum crunch, tony melone
Companies: verizon


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  • icon
    ahow628 (profile), 18 Feb 2015 @ 10:48am

    Finger gun

    I'm just picturing Verizon execs in the FCC offices with their finger guns in their jacket pocket and threatening to shoot.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Feb 2015 @ 10:55am

    Of course there is a spectrum crunch! Just like there is a shortage of high-tech workers...

    reply to this | link to this | view in chronology ]

    • identicon
      Verizon Marketing Dept., 18 Feb 2015 @ 11:16am

      Re:

      *Fingersnap* THAT'S the answer! Just like H1-B techs, we'll import cheaper spectrum from other countries, repackage it, and upsell it as genuine American! *sniff sniff* Do I smell a promotion? Yes I do!

      reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 18 Feb 2015 @ 11:39am

    The crunch might be real, but it is not in spectrum.
    The crunch might have something to do with not investing in the infrastructure to make use of it.

    Much like the doomsaying about finite bandwidth, the truth is if they had just invested money over time to upgrade and expand there wouldn't be a problem. But investor value & bonuses are always more important, and one can always run and get a handout to deal with what has become a much worse problem (now if only we could force them to not pocket the handouts & still not fix the problem).

    For all of the love of the "free market" it is amazing how far they bend over to make sure that the market will never be free for actual competition.

    reply to this | link to this | view in chronology ]

  • identicon
    Morgan Wick, 19 Feb 2015 @ 4:08pm

    And Verizon and their cronies continue to stare with longing eyes at the broadcast television spectrum, even though if they do need spectrum it will doubtlessly be because of the demand for video broadcasters currently deliver and whose technology AT&T and Verizon are currently reinventing with their "LTE-Broadcast/Multicast" technologies, except that way we'll have to pay AT&T or Verizon for the content and, ironically, we'll be wasting more spectrum by potentially pushing out the same content multiple times, once for each wireless provider.

    reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 19 Feb 2015 @ 6:26pm

    my first comment of the year.

    Posts like this are why it's hard to Techdirt seriously.

    Verizon isn't saying that "spectrum crunch" never existed, they are saying that in those marketplaces, they have already obtained spectrum which may or may not be developed. The AWS-1 frequency group was not generally the group initially used in the US for 4th gen services, and was actually mostly used by T-Mobile and a few others. Many of the devices sold until recently in the US could not operate in this band.

    That they have purchased spectrum rights in AWS-1 does not in any manner change the lack of space many carriers are seeing in the traditional bands used for wireless communication in the US.

    Karl, I know you really, really, really hate all big wireless (and wired internet) providers. The disdain in each and every one of your posts is clear. If you are going to try to write hit pieces, at least try to be more honest.

    (I'll be back again in a few months to laugh at something else. Generally I read Techdirt these days between the Daily Show's site and The Onion. It helps me better frame the posts here!)

    reply to this | link to this | view in chronology ]


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