There are four national carriers operating in the United States of America today. The two later carriers are AT&T and Verizon Wireless, with the two smaller being T-Mobile US and Sprint. These four carriers compete with one another and a number of smaller, regional operators plus their own respective MVNOs, Mobile Virtual Network Operators. The industry regulator, the FCC or Federal Communications Commission, is responsible for some of the oversight of the industry and for managing the spectrum auctions to provide each carrier with the necessary airwaves in order for them to provide customers with the necessary technology. At the time of writing, the FCC is preparing a complicated auction in order to sell off a part of the 600 MHz spectrum currently used by American broadcasters and due to make up part of the cellular networks in the years to come.
Spectrum at the 600 MHz point is considered amongst the most valuable for cellular operators because the lower the frequency, the greater the penetration of the signal through walls and solid objects. This means that a network operating at the 600 MHz frequency will need fewer masts compared to one operating at say 900 MHz, 1,800 MHz, 2,100 MHz or higher frequencies. This in turns reduces the overhead of running a business in proportion to the number of customers with service on their devices – operators will still need to provide areas of higher capacity networking but can use shorter range, higher performance and higher frequency cells for this coverage. Currently, the 600 MHz spectrum is used by a number of broadcasters and the FCC is overseeing an auction to realize spectrum from the broadcasters to be sold on to the carriers in due course. The FCC needs to ensure that the spectrum is sold at a fair price for the broadcasters via a reverse auction, but also to ensure that all participating carriers can compete by preventing those with the deepest pockets from buying up all of the available spectrum. As part of this process, once the FCC has agreed to buy spectrum from broadcasters, the spectrum will be “repacked” in order to divide it up ready to be sold on to the carriers. As part of this process, many broadcasters are expecting to move their channels to a different part of the 600 MHz spectrum.
One of the larger carriers, AT&T, has urged the FCC to ensure it has the necessary resources in order to produce and action a transition plan for the move of spectrum from the broadcasters to the carriers – within a few months of the reverse auction conclusion. AT&T stated that the FCC should include provision to ensure specialised engineers are used in an efficient manner in order to minimize the length of the transition period, essentially, for the greater good – “delivering public interest benefits to the greatest number of people in the shortest people of time.” The carrier referenced the 800 MHz spectrum auction that concluded in 2005 and the follow up rebranding action was expected to take three years, but is still ongoing. This particular frequency rebranding exercise is more complicated than the 600 MHz repacking and repurposing arrangement. Currently, the FCC has a thirty nine month plan to repack the released 600 MHz spectrum, which some in the industry believe is not long enough.
AT&T has deep pockets and is expected to be an important bidder for 600 MHz spectrum, although T-Mobile US has been outspoken in needing to keep an even playing field and to prevent AT&T (and Verizon) from gaining an unfair advantage. Sprint has already stated it will not be bidding for 600 MHz spectrum although in recent days we have seen stories circulating that Sprint’s parent, Softbank, may be considering buying 600 MHz spectrum.