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Verizon Wireless’ Spectrum ‘Crunch’ Appears Self-Imposed

February 24, 2015 - Written By Cory McNutt

Spectrum in the US is being bought all of the time – after that, some of it is used and other amounts are apparently hoarded.  It is bad enough to hoard it, but Verizon, apparently, cries that they have a “disastrous spectrum crunch.” On one hand, Verizon was telling the Federal Communications Commission (FCC) they were running out of spectrum because they wanted the FCC to approve a deal with the cable industry.  At the same time, they were telling investors that they had more than enough spectrum to handle their future projects.  Verizon cannot have it both ways.  The FCC has often wonders how many times Verizon can cry ‘wolf’ yet they have never received a satisfactory answer from the telecom.

Recently, the FCC received $44.9 BILLION worth of bids – a new record – for AWS-3 spectrum. With this much spectrum available, even Verizon should stop their gripping and stop the wireless industry claims that Title II rules would prevent investments within their industry.  Is the number of smartphones really threatening to overwhelm the carriers’ networks?  Do the carriers have any business asking for help from the government or do they already have all the help they need via existing technology?

“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. – FierceWireless”

Does this mean that Verizon spent $10.4 billion in the recent AWS spectrum auction on more spectrum that they really did not need – meanwhile smaller companies would love to have even a small piece of this valuable commodity.  With reserves such as those, Verizon and AT&T can raise the prices they charge the smaller companies if they want to use any of that spectrum.  This type of hoarding has been going on for years and is nothing new.

Every auction, the major wireless carriers threaten the government that the wireless industry will collapse if they are not allowed to purchase the spectrum even though the FCC admitted that Verizon and AT&T control about 70-percent of the low band spectrum licenses.  This leaves the smaller companies extremely vulnerable to the whims of the larger carriers… much like a bully beating up on the smaller kids.