The global adoption of LTE was going to heal the rift between the CDMA and GSM camps and give U.S. consumers more freedom to switch among carriers and greater choice in devices. Verizon’s planned sale of its extra LTE spectrum pretty much quashes that dream.

For sale sign

The technology wars were supposed to be over. The global adoption of LTE as a common 4G technology was going to heal the rift between the CDMA and GSM camps and give U.S. consumers more freedom to switch between carriers, as well as the ability to choose from a set of common devices that could work on any network. Well, forget it: Verizon’s planned sale of its extra LTE spectrum pretty much quashes that dream.

Instead of coalescing around mutually exclusive technologies, U.S. carriers are now coalescing around mutually exclusive spectrum bands. But the result is the same. A Verizon LTE phone won’t work on an AT&T LTE network and vice versa. This was always going to be a problem, but Verizon’s proposed fire sale of 700 MHz licenses would essentially codify that rift. If Verizon dumps all of its lower 700 MHz spectrum, it won’t share a single similar license with any of the country’s other operators, effectively creating its own private band within the 700 MHz airwaves.

That means device makers like Apple will have to design phones that work on Verizon’s network and no one else’s. In that case, dozens of carriers that own spectral real estate in the same band won’t be able to roam onto Verizon’s network. LTE was supposed to change everything, but the industry remains as balkanized as it always was.

A little bit of background

The 700 MHz band is a truly messed-up patch of the electromagnetic spectrum. It has been sliced and diced into every sort of license and configuration possible. In 2008 Verizon bid on and won at auction what was essentially a nationwide 22 MHz license called the “upper C block,” over which it is today deploying the first phase of its LTE network.

The C block is a pretty choice chunk of airwaves, but it’s also a weird one. Its duplex is reversed, which means the frequencies normally used for the downlink are used for the uplink and vice versa. That makes C block a special case that requires special hardware. To build devices that work universally across the 700 MHz band, a device maker would be forced to cram filters and other elements into the device to prevent the disparate parts of the band from interfering with one another, a costly proposition.

But Verizon didn’t just pick up the C block in the 2008 auction; it also picked up a bunch of lower A- and B-block licenses in big and mid-sized cities across the U.S. In the big urban areas — like New York, Los Angeles and Chicago — Verizon needs more capacity to meet the higher mobile broadband demand, and those 12 MHz and 24 MHz chunks were supposed to provide that extra bandwidth. But if Verizon wanted to incorporate those additional LTE airwaves into its network, it would have been forced to go to the extra effort and eat the added expense of sourcing cross-band devices.

Dozens of operators also own spectrum in those lower 700 MHz airwaves, which means any device Verizon procured to work across its bands would have also worked on its LTE networks as well. But the proposed spectrum sale tosses that scenario out the window. By dumping everything but its core C-block spectrum, Verizon would no longer need to wrestle disparate frequencies into submission. Instead Verizon gets to segregate itself in the upper half of the band, leaving everyone else to their own devices in the lower half.

Verizon has made the calculation that it’s easier to buy up friendlier airwaves than try to whip the conflicting halves of the 700 MHz band into shape. That friendlier spectrum happens to be the Advanced Wireless Service (AWS) airwaves at 1700 MHz/2100 MHz that Verizon is buying from the cable operators. That’s why Big Red has made the regulatory approval of its cable airwaves a condition of its 700 MHz spectrum sale.

The national and tech media has largely portrayed Verizon’s proposed fire sale as a concession to the Federal Communications Commission and the U.S. Department of Justice in exchange for approving its AWS acquisition for the cable operators. But I think that’s hogwash.

Verizon probably had little intention of ever using the lower 700 MHz if it could avoid it. It wanted the frequencies as backup (and to keep it out of its competitors’ hands), but now that the cable operators have presented it with a much more marriageable bride in the AWS airwaves, Verizon feels it can trade up to a better class of spectrum.

If the sale goes through, Verizon won’t have to play ball with anyone else: its band, its rules.

It gets worse

Verizon isn’t the only one trying to carve its own private band. AT&T is trying to separate itself from the rest of the rabble in the lower 700 MHz by creating its own band class surrounding the B- and C-block licenses it is using to roll out its own LTE network.

Like Verizon, AT&T has legitimate technical reasons for doing so, the main ones being it would be able to utilize even funkier parts of the 700 MHz for its new super-LTE scheme and avoid interference problems in the A block. But the end results will be the same: AT&T isolates itself in its own part of the electromagnetic spectrum, and everyone else gets shut off from the iPhones and other devices that Apple, Samsung and the rest build for its network.

There’s a chance the FCC won’t let AT&T’s plans fly. There’s also a chance AT&T will buy up a lot or all the A- and B-block licenses Verizon plans to sell, which would suddenly give AT&T common cause with every other lower 700 MHz license owner in the country. But as it stands now, we’re looking at the future of three distinct band classes within 700 MHz: one for Verizon, one for AT&T and one for everyone else.

If you don’t believe me that the implications of this are tremendous, just look at Apple’s new 4G iPad. The CDMA version is designed to work on a single 700 MHz network: Verizon’s. The GSM version is designed to work on a single 700 MHz network: AT&T’s.

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  1. Hopefully Qualcomm can come up with a all in one solution chip. The iPhone 4S unified all the 3G into one solution (except T-Mobile), as technology advances, they might be able to do the same with LTE.

    1. I hear you Mike, but I fear we won’t see that for a while. Technically we’ll see some interoperability when carriers start launching LTE at AWS, but the only one that really benefits is T-Mobile.

  2. I hope the requirement for any of these sales is forced interoperability of devices.

    1. Hi Medplusapps,

      It is in the FCC’s power, but it would be tough. Plus Verizon wouldn’t be selling if it was forced to interoperate. If everyone was required to offer only cross-band devices than those A-block and B-block frequencies would be just if not more valuable than the AWS freqs its picking up.

  3. @Kevin,

    Nice summary of the “gated spectrum” issues. Please quote me. ;-)

    Seriously, are you sure Qualcomm’s Gobi chipset won’t support the fragmented 700 MHz spectrum in the US? I know other countries are in different bands, however, it seems Qualcomm would want to take care of it’s biggest market as measured in revenue.

    1. Thanks Curtis, always good to hear from you.

      Actually I’m sure Qualcomm’s chipsets support every conceivable LTE band. It’s a question of the RF front end. Separate power amps, antennas and, in the case of the C-block, filters. In the case of AT&T it’s not that it can’t easily support interoperability with lower 700 MHz users, it just doesn’t want to, because there are interference problems in the A-block, which is at the edge of the band.

      Also the more generalized you make a radio the worse it performs.

      There are plenty of legitimate technical reasons for the carriers to compartmentalize, and I can’t fault them for wanting to do take advantage of them, but there are also huge competitive implications. It’s a tough call. Do we want to optimize the device for the network or do we want to create a more vibrant marketplace? In this case those two goals work at cross purposes.

  4. Kevin: What does this imply for the Public Safety spectrum? There has been a lot of talk about spectrum sharing between public safety and a wireless operator. The public safety spectrum is also in the upper 700MHz band. Would/could devices for public safety then only be compatible with VZ’s LTE network?

    1. Hi Jonathan,

      That’s a very good question. I’ll admit I haven’t been following activity in the public safety as closely, but I’ll look into. It’s definitely time we had an update post on this.

  5. One world, one phone – Voice over LTE – retirement of 2G/3G CDMA/GSM. I thought this would be the case by 2020.

    Looks like that is a pipe dream. Just in the North America, a “compatible” device has to support these LTE frequencies (along with filters, etc.) – 700, 800, AWS (1700/2100), 1900 and 2500. Add 900, 1500, 1800, 2100, 2600 for the rest of the world, and you have a mobile device that has to support 10 bands to cover the whole (or almost) world. Who is going to make a chip that will do that?

    LTE licenses mandate “unlocked” devices. No point in having “unlocked ” devices, if they cannot work with the LTE frequencies of different carriers…

  6. Thomas A. Heller Thursday, April 19, 2012

    I’d call my Senator to complain about this, but his landline phone set isn’t compatible with mine.

  7. Thomas A. Heller Thursday, April 19, 2012

    The proper role of government vis a vis these wireless communications networks should parallel what government did when it opened the trans-Mississippi territories to settlement: ensure accessibility of land to all comers, large & small, through the Homesteading Act. Then ensure that all parcels of land are adequately connected to all other parcels by public rights of way, to enable trade & economic growth.

    This, broadly speaking, is how the West was settled. It should also provide the model for the wireless territories, where Land = spectrum; Homestead = device; Roads = network access.

    1. Hey Thomas, Thanks for commenting.

      In the case of the homestead act, hundreds of thousands of landless people got a piece of real estate, right? In the case of spectrum, the vast majority is going to a few big carriers. I definitely get where you’re going, but spectrum is still held in the public trust. I think the government still has a role to play even after the parcels are passed out. Or is that what you are arguing? That the government needs to open the airwaves to more comers, not just the rich ones?

      1. You get the essence of what I’m saying. Like others, I have been struggling with the challenge of these networks, in particular defining the proper role of public authorities.

        I’m suggesting something that draws from past constructs that have delivered significant benefit to a free society’s advancement. The Homestead Act thought came to be just a month or so ago and I tried to conceptualize exactly what were the analogues (e.g. “roads and vehicles are to land like signals and devices are to networks”, enabling unencumbered exchange) I give much credit to the work of Richard Posner, whose ‘Economic Analysis of the Law’ was fundamental to my being able to ‘see’ the essential nature of this terrain with some degree of clarity. In this construct, freedom of exchange rests upon the interoperability of the devices. In my mind, that should be the essential feature that government must assure. *That* is where the public interest lies.

  8. MetroPCS runs LTE on 1700mhz spectrum i beleive. If T-Mo and Verizon launch LTE on that spectrum, theres a chance Metro could get some roaming agreements in to increase their small LTE footprint.

    1. Hi Helgaiden,

      Yep, we’ll see interoperability at AWS, but I’m not sure how much good it will do most carriers. T-Mobile will definitely benefit because its LTE network will be entirely centered on AWS, but AWS carriers who are doing multiple LTE freqs (Metro) get devices that only work on half of their networks. Also it looks like AWS will be infill, used to augment capacity within the umbrella 700 MHz networks, meaning it won’t be a useful roaming frequency.

  9. Doesnt MetroPCS use 1700mhz as their LTE Spectrum? If Tmo and VZ launch LTE on that spectrum, it could be possible MetroPCS could benefit by signing roaming agreements and increasing their small LTE footprint to a much bigger reach.

  10. The problem is that the FCC decided to divide the lower 700 MHz into three distinctively different spectrum blocks. The A-Block full of interference and coverage cut outs due to TV Channel 51 and the 50kW power premissioning of the E-Block making it very challenging for anyone to operate in it. The B-Block being clean spectrum that is actually usable and the C-Block with net neutrality restrictions attached to it.
    Does it come to a surprise that the A-Block sold for half of the B-Block and the C-Block sold for a discount to the B-Block?
    The B-Block owners paid double what the A-Block owners paid because they didn’t want to face the A-Block interference issues and now the FCC wants to force them to be interoperable with it? Come on.
    If the FCC would have taken the effort to make all three blocks in the lower 700 MHz identical in rules and interference characteristics we would have interoperability.

    1. Thanks for the comment, Roger,

      Great point. The FCC did create a mess of the 700 MHz band.

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