US carrier Sprint have announced that they are not to participate in the upcoming AWS-3 (advanced wireless service) spectrum auction. This auction is due to start on the 13 November but applications for auction needed to be presented to the FCC today. By way of background, let me explain that the AWS-3 auction is to sell off slices of frequency at the 1,700 MHz, 1,760 MHz and 2,165 MHz points. Sprint currently does not operate in any of these frequencies, but instead has bandwidth at the 800 MHz, 1,900 MHz and a significant proportion of spectrum at the 2,500 MHz point. One of the FCC's many rules is that no one carrier can control too much spectrum at any of the frequency points and in Sprint's case, unfortunately, their allocation of spectrum at the 2,500 MHz point counts against their maximum allocation at the higher frequency scale. In other words, if Sprint successfully bid in the AWS-3 auction, they may exceed the FCC's maximum allocation.
Given that Sprint does not operate in the frequencies up for auction and runs the very real risk of having to hand back frequencies that it successfully bid for, or being forced into sharing it with competitors, it makes perfect sense as to why Sprint has pulled out at this point. This is without mentioning that much of the AWS-3 spectrum being auctioned off is already being used by around 2,500 government agencies, so there is a degree of risk involved in acquiring this bandwidth. Instead, the operator is concentrating its efforts on the low frequency auction expected next year, where it does not have much spectrum as two thirds of these bands are controlled by Verizon and AT&T. Lower frequency radio waves are able to penetrate further into buildings and through solid objects but has lower maximum data transfer speeds for a given technology. Lower frequency masts have a greater effective range and this means it can cost significantly less to build out the infrastructure to provide service for a given area. As less masts are required, it may also mean that LTE roll outs happen quicker too.
In the back link article, I covered how the FCC had asked the TV broadcasters to release spectrum so that it could be re-sold on to the carriers. We've also received news that two Los Angeles TV stations, KLCS and KCET, have agreed to share a single frequency for their programming and this means that another channel of spectrum is available for next year's auction, for which they'll be paid of course. The FCC have said that without widespread broadcaster participation, next year's low frequency auctions will fail. Sprint must believe that the FCC in conjunction with technical developments (to allow broadcasters to share channels) will help make the auction a success and if so, it should be able to pick up a meaningful amount of spectrum in the lower frequencies. Going forward, Sprint appear to be caught between a rock and a hard place when it comes to spectrum and bandwidth and I hope, for their sakes, that the 2015 auction goes well.