Spectrum on Hold
Despite constant and strident pleas for more spectrum, wireless carriers are now apparently in no hurry to take hold of the frequencies long touted as the future home of advanced data services.
The shiftevidenced by industry support for a proposed three-to-five-year delay in the 700MHz band auctionindicates the carriers are now content to develop so-called third-generation services on bandwidth they already own.
Under a plan included in the Bush administrations fiscal 2002 budget proposal to Congress last week, two sets of spectrum in the 700MHz band would not be made available for wireless communications before 2004 and 2006, closer to the time when the spectrums current users television broadcastersmust clear out.
"Our position is that the final time frame [for using the spectrum] remains the same even with the proposed auction delayswere merely changing the order of operations," said Travis Larson, a spokesman for the Cellular Telecommunications and Internet Association, in Washington. "Either way, the spectrum ends up in the hands of wireless carriers at roughly the same time."
Larsons statement is a far cry from the hand wringing that has accompanied industry pleas for more spectrumespecially in the 700MHz bandsince the auction was first scheduled last fall.
In a reversal of their earlier position, carriers now say that a delay in use of the 700MHz band will not affect the timing of commercial availability of 3G services.
Furthermore, improved technologies will enable ever more sophisticated services on already-licensed frequenciesdespite a steady cry for more spectrum allocations in other bands, sources said.
"The industry, since 1990, while it has continually complained, has done very well with the spectrum thats been available," said Herschel Shosteck, chairman of The Shosteck Group, in Wheaton, Md. "Every time theres a technological innovation, theres more capacity added to the network."
AT&T Wireless currently offers limited data services, and incrementally more advanced offerings are expected to be deployed gradually, beginning with Code Division Multiple Access carriers such as Verizon Wireless later this year.
"The idea that super-duper services are suddenly going to take the country by storm is self-delusional," said Shosteck, who recently published a study concluding that sufficient spectrum exists for low-cost, low-speed mobile access to the Internet. "It always takes a technology five years to mature. There is not going to be much [high-speed mobile data access] until 2005-2006 simply because of the maturation process."
Congress had originally set an auction schedule that would have assigned half of the 700MHz band to carriers last fall, allowing them to use it as soon as they could lure the TV broadcasters out with financial compensation. Payoff negotiations have so far failed, however, demonstrating that the frequencies remain more valuable to the TV operators than to wireless carriers.
The carriers new support for a delay indicates they no longer believe they can compel the TV operators to depart before 2004 and are willing to wait for the law to ultimately push them out.
Less than one year ago, the CTIA and six of the largest wireless carriers, including AT&T Wireless Services Inc., Verizon Wireless and VoiceStream Wireless Corp., pressed upon regulators the importance of the 700MHz band for 3G. "Because of its location in the electromagnetic spectrum and its excellent propagation characteristics, the 30MHz of spectrum to be auctioned in the 700MHz band is ideally suited for next-generation mobile and high-speed broadband services," they said in a July 20, 2000, letter to then-FCC Chairman William Kennard.
Today, several industry sources say privately that 700MHz is not a favored band for 3G and that carriers prefer to use the same spectrum used in other countries for next-generation services.
"The channels are useless for our purposes until the broadcasters are off them," said Bill McCloskey, a spokesman for Atlanta-based BellSouth Corp. "I dont know that weve decided what wed want to do with 700MHz channels even if we buy any."
Unlike a related White House 2002 budget proposal to charge such analog broadcasters as Paxson Communications Corp. lease fees as long as they refrain from converting to digital technology, the auction delay plan has not elicited opposition from key telecommunications lawmakers.
In addition, the National Association of Broadcasters will not oppose an auction delay, according to an official of the Washington-based association. The NAB has members on both sides of the issue, including Paxson, which is the largest operator in the 700MHz band and the most vocal critic of the Federal Communications Commissions policies to clear the band for new users.
Industry observers widely expect Congress to adopt Bushs auction delay plan for a number of reasons, including to remedy its earlier misguided mandate that the FCC begin auctioning the spectrum six years before auction winners could use it.