Charged with identifying more airwaves for commercial use, the National Telecommunications and Information Administration (NTIA) recommended last year that the private and public sector split time on government airwaves. The idea is that the DOD and other users were only using their spectrum at certain times and in certain places, so why not let carriers access those frequencies whenever and wherever they weren’t occupied by the feds?

Carriers traditionally like licenses they can call their own, and the industry initially responded to the deal with skepticism. In a blog post, AT&T still said it would rather see airwaves cleared entirely of government users and auctioned for commercial use but was amenable to the idea of sharing if clearing the airwaves was not possible.

“I want to emphasize that we continue to believe that clearing and reallocating is the best approach to freeing up much needed spectrum for commercial mobile broadband use,” AT&T Assistant VP Stacey Black wrote in the policy blog. “The existing exclusive licensing regime has resulted in billions of dollars in wireless infrastructure investment, enabling the U.S. to lead the way in the global mobile broadband marketplace. While clearing spectrum for exclusive commercial licensing must remain the top priority, when that is neither time nor cost effective, AT&T supports exploring sharing arrangements.”

Black hints at another possible obstacle to a shared spectrum plan: Congress. Lawmakers have counted on the billions raised in spectrum auctions to fill government coffers. Depending on how spectrum sharing was implemented it would either raise no money or far less than previous auctions.

Over the next few months, the three carriers and the DOD conduct trials and simulations of sharing scenarios at government installations. The results of those tests will be released in March.

Sprint was the only carrier in the Big 4 not on the list, but a Sprint spokesman told FierceWireless that the company works closely with the NTIA and will be following the tests closely.

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As you can see from the first map, MetroPCS owns some big swathes of spectrum, but like most carriers it hasn’t deployed networks throughout its license territory. Instead its focused on the bigger markets and populated regions of its footprint.

Pay particular close attention to the darker splotches on the map. In some regions MetroPCS owns considerable spectral bandwidth – in some cases more than 50 MHz – but for the most part those dense concentrations of airwaves aren’t in big cities. Still T-Mobile is going to get a 20 MHz capacity boost in most of the cities where MetroPCS currently operates. Plus T-Mobile will be able to take advantage of Metro’s unused airwaves outside of the big cities, if it feels the needs.

The second Mosaik map shows where the coverage of T-Mobile and MetroPCS actually overlaps. These are live networks as opposed to spectrum holdings so where there’s color you should actually see a signal. In those purple areas, T-Mobile’s network is going to a significant LTE capacity boost. In many areas it will have enough spare PCS airwaves to build out new dual-carrier HSPA+ networks.

The third and fourth Mosaik maps should be viewed together. The third shows all of T-Mobile’s current spectrum holdings before MetroPCS is layered on, showing where T-Mo owns frequencies but necessarily where it’s built networks.

The last map is the two carriers’ combined spectral holdings, which should give you an idea of the networks they could potential build.

Pay attention to the red parts. These are what T-Mobile is really after in the merger. In those red regions it will have more than 70 MHz of overall capacity, which frankly is going to make T-Mobile CTO Neville Ray do backflips. With that much capacity there’s frankly no network AT&T or Verizon can build that T-Mobile can’t match. Depending on how quickly the new ‘T-Metro’ moves, it could beat its larger competitors to those cities with a big honking 40 MHz network that puts any 4G network so far deployed to shame.

But also note that those red patches only cover a handful of big cities, such as Los Angeles, San Francisco, Dallas, Boston, Detroit, Atlanta and Miami. Even in cities where T-Mo stands to gain substantial frequencies like New York City and Philadelphia, the new merged carrier won’t cross that 70 MHz threshold. MetroPCS is going to give T-Mobile a lot of capacity in some key markets, but its not a spectrum panacea.

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But AT&T is trying to rectify that situation by tapping spectrum in the most unexpected places. On Thursday, AT&T announced its intentions to buy spectrum squatter NextWave and its big hunk of Wireless Communications Services (WCS) spectrum. Shortly afterward it filed notice with the FCC that it plans to pick up smaller WCS holdings from Comcast and Horizon Wi-Com. UBS Investment Research analyst John Hodulik believes AT&T is now approaching Sprint, which is the last remaining WCS licensee of note.

Hodulik said in a research note that those deals will give AT&T almost exclusive ownership of the WCS band, which ultimately would allow it to deploy a 20 MHz LTE network nationwide.

Getting all those licenses is key to AT&T’s strategy otherwise WCS will remain useless for mobile broadband services, as it has for the last 15 years. Interference problems with the neighboring satellite radio services have made the band a no-man’s land for terrestrial cellular technologies. But a compromise between Sirius XM Radio and AT&T would solve the problem.

Their proposal to the FCC would designate 10 MHz of the 30 MHz WCS band as guard bands, which no cellular signals could cross, thus protecting satellite radio signals from interference. The problem is AT&T can’t tell a bunch of other WCS license holders that spectrum they paid for is suddenly off limits. It has to buy up all of their licenses to make its plan work. In addition, it needs to get as much of the usable WCS frequencies as possible to ensure it has consistent capacity and nationwide coverage for any new LTE network.

Why WCS is important to AT&T’s plans

So what would a 20 MHz network mean? For starters it would be the exact same size as Verizon’s current LTE network, which is rapidly nearing completion. While AT&T already has 20 MHz of 700 MHz of its own in many markets, it’s forced to deploy 10 MHz networks in key cities like Chicago and Los Angeles. WCS could provide a consistent blanket of capacity across all urban markets in the country.

AT&T’s LTE markets are marked by the orange dots

I say urban areas because WCS’s 2.3 GHz frequencies don’t have the propagation characteristics of 700 MHz, hardly making them optimal for rural or suburban deployments where cells are stretched for miles. A bit too much is made of 700 MHz’s reach, though. AT&T doesn’t need gobs of capacity on rural highways. It needs that capacity in cities where high demand and the density of subscribers mandate cells be packed closely together – regardless of what frequency they use.

AT&T still has to close these deals, get FCC approval for its spectrum retooling plan, standardize WCS as an official LTE band and deploy its network. Then it has to build a device market for what will essentially be an AT&T-exclusive band. That will take years. Its current LTE plans will have to move forward regardless of whether its WCS plans work out. Also, it will still be on the hunt for more airwaves.

As Fierce Wireless points out, Verizon would still be far ahead of AT&T in the airwave race, even if Ma Bell can pull off its grand plan. AT&T would have the spectrum for a nationwide high-capacity LTE network in several years. But Verizon has nearly completed the equivalent network already, and if its acquisition of the cable operators’ spectrum is approved, it will have enough spectrum to build a second network of similar size and breadth next year.

The Verizon-cable deal, though, is encountering growing opposition. What should have been an easy bid to buy and put to use spectrum that’s lain dormant for eight years has turned into a big political controversy. Verizon overreached by agreeing to co-marketing pacts with the Comcast and Time Warner Cable, which essentially amounts to the companies divvying up the wireless and residential markets in different regions.

According to Reuters, the U.S. Department of Justice is demanding some big concessions from Verizon before it will let the deal pass, including the dissolution of their co-marketing agreements.

Photo courtesy of Shutterstock user SSSCCC

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AT&T will pay $25 million for the spectrum plus a possible contingent payment of up to $25 million, which is paltry. But in a separate deal with shareholders it has agreed to take over NextWave’s $600 $550 million in debt. In exchange AT&T will get WCS licenses covering 210 million people.

To understand the implications of the deal, you first have understand why WCS is such a problematic band. Bisecting WCS are Sirius XM Radio’s satellite broadcast signals, which would be knocked out if a high-powered terrestrial cellular was transmitting nearby. After years of impasse, AT&T and Sirius finally settled their differences, and in June submitted a joint proposal to the FCC that would allow both an LTE network and Sirius’s satellite radio service to coexist peacefully.

But that proposal didn’t solve the whole problem. The plan called for creating “guard bands” on either side of Sirius’s spectrum – no man’s lands where mobile carriers weren’t allowed to transmit. Those guard bands would sit in two portions of the WCS called the C and D blocks, effectively eliminating any possibility of using those licenses commercially. Guess what? AT&T doesn’t own much C-and D-block, but NextWave owns a heck of a lot it.

By buying NextWave, AT&T eliminates the biggest possible source of opposition to its joint proposal with Sirius. It’s a fascinating – and kind of brilliant – maneuver: AT&T is buying spectrum it can’t possible use for 4G, but in doing so AT&T could then turn its own worthless WCS spectrum into highly valuable 4G airwaves.

Of course, AT&T needs to get FCC and U.S. Department of Justice approval for the deal. And it needs the FCC to grant its request to retool the WCS band. AT&T hasn’t gotten much love from regulators since the T-Mobile debacle, but I doubt there will be much opposition to this deal. The WCS airwaves have sat idle for a decade and a half – a shameful waste of a public asset. AT&T’s proposal would finally put those airwaves to use.

AT&T will also gain NextWave’s Advanced Wireless Services (AWS) licenses covering about 60 million people — mostly in smaller markets – which should help AT&T bulk up the next phase of its LTE rollout. NextWave also owns or leases a few 2.5 GHz licenses, which is the same spectrum Clearwire uses for WiMAX. AT&T presumably gains those licenses as well, though it probably has little use for them and didn’t even mention them its announcement.

Trespassing photo courtesy of Shutterstock user Nicolas Raymond

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The new deal will see licenses in 218 markets change hands, the balance going to T-Mobile, which will pay Verizon an undisclosed sum of cash. In all, T-Mobile will gain licenses covering 60 million people, and, most importantly, T-Mo will be able to fill critical gaps in its future LTE network. Though T-Mobile gained a lot of Advanced Wireless Services (AWS) airwaves after its merger with AT&T failed, it still has the frequency holdings to only partially cover the country. For instance its original plans called for covering only three-quarters of the top 25 markets with the new LTE network.

The deal with Verizon can fill in those holes, giving it spectrum in Philadelphia; Washington, D.C.; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; Charlotte, N.C.; Raleigh-Durham, N.C.; Greensboro, N.C.; Memphis, Tenn.; and Rochester, N.Y., among other markets. In exchange, Verizon would receive licenses covering 22 million people.

It’s no coincidence that most of the licenses T-Mobile gains are east of the Mississippi. Verizon already has AWS holdings in the eastern half of the U.S., and the cable deal will only make it more flush in east coast airwaves. Meanwhile, T-Mobile’s received a lot of west coast airwaves from AT&T.

So why the change of heart from T-Mobile? It’s probably acknowledging reality. T-Mobile has been angling for those cable airwaves all along, which is why it has called for the Verizon-cable deal’s dissolution on anti-competitive grounds. But it likely realizes it has little chance of stopping the deal from going forward, so T-Mobile might as well deal directly with the airwaves’ eventual owner. You also could take the more cynical view that Verizon is simply buying a very vocal critic’s silence with some extraneous spectrum.

Image courtesy of Flickr user buddawiggi.

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Dish is claiming that it must wait for the LTE standards body, the 3GPP, to validate its S-band satellite spectrum – now being called the Advanced Wireless Services 4, or AWS-4 band — for 4G use. Normally that would seem reasonable – except that the 3GPP is expected to give its stamp of approval this December. Dish is claiming it needs a full four years after that to bring online a measly network covering 20 percent of the population. From the filing (pdf):

In general, development, testing, certification, and deployment must follow each other.  This entire process is expected to last 48 months from when the AWS-4 service rules and 3GPP S-Band specifications are completed.

In short, based on an ambitious buildout schedule and barring unforeseen circumstances, DISH believes it can deploy its network to 60 million POPs within four years.

It’s not as if the FCC isn’t giving Dish a long leash. The FCC proposes a 3-year time line for Dish, and the commission is even factoring in the time Dish has to wait while it finalizes the rulemaking that would officially designate its spectrum for terrestrial use.

Buying time for a quick spectrum flip?

So why does Dish need the extra year? It claims it needs to wait for the equipment, chipsets and devices to be available. By Dish’s reckoning wireless vendors have become so sluggish and unresponsive it will take 48 months to retune their already commercially available base stations and print new chipsets for the 2 GHz band.

Earlier this year, Dish claimed that it also had to wait for LTE-Advanced to be commercially available, which is another specious rationalization. LTE-Advanced is an iterative technology. You have to have an LTE network before you make it advanced.

To put this in perspective, the 3GPP approved the final LTE standard, called Release 8, in December 2008. Exactly two years later Verizon Wireless had a commercial LTE network up and running. And Verizon was starting from scratch with a brand new standard – Dish only needs the 3GPP to tack on another frequency band class.

This is another example of an operator making desperate claims about the need for spectrum, and then finding every excuse not to build networks when they finally get it. It’s a good indication that Dish chairman Charlie Ergen has no intention of ever building a network and just wants to flip the licenses for a quick and profitable sale. The more leeway there is on a building a network, the more attractive those licenses will be to a potential buyer.

Consumer advocacy group Public Knowledge also suspects that Ergen’s intentions aren’t pure. It sent its own filing to the FCC (pdf) asking that Dish’s spectrum be loaded down with conditions that would prevent big carriers like AT&T and Verizon Wireless from gobbling up its LTE capacity at wholesale rates. The most interesting condition was No.4, which would stipulate “unjust enrichment penalities” on Dish if it tried to sell its spectrum to Ma Bell or Big Red. From the filing:

While permitting a lucky incumbent to spin regulatory straw into gold may increase the total amount of spectrum available for mobile data services, the transfer of AWS-4 licenses to the emerging wireless duopoly would be worse than the status quo for consumers, competitors and innovators.

Dish photo courtesy of (CC BY 2.0) Flickr user Dave Lindblom; Sale image courtesy of Flickr User Peter Kaminski

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Verizon is trying to buy the cable operators’ Advanced Wireless Service licenses, which would give it a near nationwide footprint of airwaves for an LTE overlay to complement its current 4G network at 700 MHz. To sweeten the pot and gain regulators’ permission for the buy, Verizon has offered to sell off its spare airwaves in the 700 MHz band to other operators.

Carriers like T-Mobile and Sprint, along with a slew of consumer advocacy and telecom industry groups, have criticized the deal, claiming Verizon is merely trying to lock up the most valuable 4G airwaves in the market in order to keep them out of its competitors hands. The implication here is that Verizon locked down the A and B blocks, and now that much more valuable AWS frequencies are in play, it will do the same with the cable operators’ licenses.

In the letter (pdf), Kaplan points out that under the terms of the 700 MHz auction Verizon is required to build networks in the A and B blocks by no latter than June of 2013, yet it appears to have done nothing with those licenses. He asks:

“…what steps to date, if any, has Verizon Wireless taken to deploy mobile services using the Lower 700 MHz A of B block licenses (either or both)? On what timetable has Verizon Wireless been planning to deploy mobile service in these Lower 700 MHz blocks?”

Kaplan also wanted to know why the sale of those 700 MHz licenses was contingent on it grabbing the cable AWS spectrum. The FCC wants to how that’s relevant, if Verizon had tried to sell its extra 700 MHz licenses in the past, and whether Verizon truly plans to abandon the spectrum sale if the cable deal isn’t approved. Kaplan wants answers next Tuesday.

Verizon is in a tricky situation here. Those A and B block licenses don’t fit well into its LTE plans for multiple reasons: the goofy configuration of the 700 MHz band, the fact that they don’t form a nationwide footprint and interference concerns in A block. When Verizon bid on them and won them in 2008, it probably wanted them as insurance – or to keep them out of AT&T’s hands. It was hoping something better would come along, and it did — in the form of nice big gift-wrapped package of clean nationwide airwaves delivered by its new cable buddies.

The truth is that operators pull these kind of warehousing shenanigans all the time. AT&T, Verizon and the cable companies haven’t done squat with the AWS licenses they won them in 2006. But you don’t actually admit to your regulator that warehousing is what you planned to do along. It got Comcast in trouble a few months back. Now the FCC is asking Verizon the question directly, and a lot hinges on Big Red’s answer. If you’re trying to convince the FCC to approve a spectrum sale, it’s not a good idea to tell them you have been a lousy steward of the public airwaves so far.

Photo courtesy of Flickr user Mark Strozier

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