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Featured: The Wireless Spectrum Apocalypse: How Will it Affect You?

August 21, 2012 - Written By Christina Gardner

 

When you hear these words ‘wireless spectrum’ what goes through your head? Do you know what it is, and that there is be a huge problem with it today?  I came across this topic, and the more I read, the more interested I became, and I also learned a great deal. First let us learn about this ‘spectrum’ and what it does for mobile device carriers.

What is Mobile spectrum? “All wireless communications signals travel over the air via radio frequency, aka spectrum.” So in English terms, the signals that you’re TV, radio, smartphone, and GPS use, or “the radio frequencies that transmit off of signals.” Author Maggie Reardon at CNET gave this wonderful example for explaining a mobile spectrum:

“The easiest way to understand what spectrum really is and how it provides services is to look at your radio. When you tune your radio to 93.9 FM, you are tuning into a station that is broadcasting at 93.9 megahertz. If you want to a listen to a different station, like one that only plays country music or jazz, you turn the dial to another frequency like 104.7 FM. And a different radio station will be transmitting over that particular frequency on a different setting on your radio dial. No two stations transmit over the same spectrum at the same time in the same area, because if they did, they’d cause interference with one another.

And because wireless signals only transmit over a certain distance, you won’t be able to tune in a radio station you like that broadcasts out of New York City when you are in Philadelphia or Chicago or anywhere beyond the distance that those broadcast signals can travel via spectrum over the air to your radio

Mobile phones work much the same way. Wireless operators, such as AT&T and Verizon, cannot transmit wireless signals over the same frequencies in the same markets at the same time.”

So now that we know what spectrum is, what is the issue? Well, we come across a small cellphone company by the name of C Spire. C Spire is a ‘small, southern wireless provider formerly known as Cellular South. What does C Spire have to do with mobile spectrum?

C Spire has recently acquired $192 million worth of 700 MHz spectrum. The problem they are having? They aren’t even able to use it which now brings us into the belly of the beast. According to some, this recent purchase is considered valuable spectrum that is slowly dwindling and hard to come by. The problem C Spire is having is that they want to launch their new 4G LTE network, which is promising to reach 900,000 customers, however bigger companies like AT&T and Verizon have made it very hard for small time companies like C Spire to acquire the devices or handsets needed to run the correct network or ‘spectrum.’ Which doesn’t really surprise me, why wouldn’t AT&T and Verizon want manufacturers to make devices compatible for only them?  However, this leaves companies like C Spire sitting on a very expensive resource unable to use.

This is a huge issue going on that many of us may not be aware of. For those of you who are not able to afford the bigger companies like AT&T and Verizon, you should all be concerned. Mobile Spectrum is running low, and AT&T and Verizon own about 70% of it, and are looking to acquire even more as they state they need more of it!

Kathleen Ham, VP of federal regulatory affairs, T-Mobile says:

“As we transition to 4G LTE, spectrum is a key part of the strategy and survival of every carrier. And it’s the duty of the regulators to ensure that we don’t end up with a market of spectrum haves and have-nots.”

As you can see, it’s quite an issue especially to the smaller wireless carriers. If the bigger companies continue to take up spectrum, smaller companies like T-Mobile and C Spire could be pushed right out the door. This is starting to concern these small town companies and they are hoping regulators and judges to intercede.  Ham continues to state:

“We are in a critical time in the evolution of the wireless industry.”

I’m sure many heard about when T-Mobile was going to merge with AT&T and they were actually refused by the Federal Communications Commission and Department of Justice. Ham said this regarding these actions:

“If the government turned down our deal [to merge with AT&T] because they want us to continue to compete in the market, then we need access to spectrum.”

I can definitely understand the concern regarding this the more I research. It’s an alarming concern when you have a small company like C Spire that is wanting to grow, but are not able to when companies like Verizon have 70% of the market and are wanting more instead of maybe letting the underdogs get some.  Verizon and AT&T are spending millions of dollars to make sure that “spectrum auctions” that go through new rules are being written in a way that will benefit them.  Well, that doesn’t seem fair, but I’m not surprised. Those who have the most spectrum will be able to ‘dictate what happens in the market as carriers move to 4G LTE services.’

So what if these companies like C Spire are able to get their hands on some of this value-able spectrum? This still causes a problem, and doesn’t mean the company is on ‘easy street.’ Like mentioned earlier, these bigger companies are able to control what happens with the standards of these spectrums, but also the standards on how smaller companies can acquire the devices that are compatible.  Does it surprise you that they would do this, especially when it’s Verizon?

 

Back in April, C Spire made a move to speak out and start a movement regarding this. They filed an antitrust lawsuit against AT&T and its suppliers claiming they are ‘trying to run it out of business.’ They believe that AT&T got together with chip makers and standards bodies to make sure that the standards and specifications for devices that run on the 700 MHz spectrum were difficult. So what does AT&T have to say about it? Of course they declined to comment for the most part. They did however, say they had created this ‘spectrum island’ for ‘technical reasons’ and it was to protect THEIR customers by creating their own ‘band class.’ I have to chuckle, because I find it unlikely that any big giant like AT&T and Verizon are looking out for their customers, but that is just my opinion.

 

 

So the outcome to this all? C Spire is only one of the countless others in the same position. These small companies desperately want judges and FCC to intercept and help the situation of spectrum and limit these mobile giants. Imagine if these two companies are able to acquire more mobile spectrum? It will become even harder for these smaller companies, which may very well put them out of business. Mobile spectrum is like real estate for mobile carriers big and small and right now, and two out of dozens own most of it. Verizon actually made a 4 million bid on a purchase of spectrum just last year.  This is concerning as many feel Verizon already owns enough. I never really thought about some of these things, and didn’t realize how very complicated things can get when dealing with spectrum. How are other business’ supposed to prosper when two very big popular companies own most of it? Many are sending in letters to the FCC about this “potential” purchase. One specific example would be U.S. Sen Al Franken, who was one who expressed such a concern. He stated:

“I am concerned this transaction poses a serious threat to consumers and to competition that will ultimately result in higher prices and less choice for consumers. If your agencies do approve this deal, I urge you to only do so if you are able to adopt stringent conditions to protect competition and the public interest.”

This is a huge decision on the FCC’s part. Many feel that the FCC will approve the deal without thinking twice about the smaller people. I urge you all to visit the source link and read the in-depth information provided about this situation, and see how big  it actually is.

In conclusion, why is this important?  Consumers are starting to pay more and more for the plans out there by AT&T and Verizon.  Even though they created unlimited voice and text message bundles, they are still paying more with these new ‘tiered’ plans.  I being a customer (Verizon) am one to admit,  the new plans is costing many consumers more than what it should.  An analyst made a point that:

“..In less than 12 months, $30 has gone from buying you unlimited data to not even covering 1 GB…”

Then you look at Sprint and T-Mobile and they still are offering unlimited data plans, which many consumers find much more important than what AT&T and Verizon are offering now. It’s a very interesting situation to become aware of, because essentially this isn’t getting better. Verizon and AT&T are striving to be on top, and are constantly looking to acquire what little spectrum is left. What do you think will happen? What would you like to see happen? Do you think the smaller companies like T-Mobile, or other lower price mobile carriers would be missed? Or do you think the FCC should really start to look into this and start limiting these two carrier giants? Let the ‘little people’ get a chance out there? These are questions you should really ask yourself, and see how you feel and which side you find yourself  on.

 

Sources: CNet