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Does AT&T need more spectrum? It’s complicated

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AT&T's proposed WCS spectrum sale

Sprint (s s) believes it has caught AT&T (s T) in a ‘gotcha!’ moment. While AT&T is using the threat of a spectrum crunch as justification to buy T-Mobile, Ma Bell is trying to sell off mobile broadband airwaves it already owns. In a letter to the Federal Communications Commission, Sprint basically calls AT&T a hypocrite, citing AT&T’s intended sale of its 2.3 GHz spectrum as another reason for the FCC should deny AT&T and T-Mobiles’ $39-billion deal. While Sprint has levied plenty of dead-on criticisms against AT&T-T-Mobile deal in the past, this time the operator has overshot the mark.

Here’s an excerpt for Sprint’s letter, signed by Sprint attorney Charles Logan:

“AT&T, in fact, has more licensed spectrum than any other CMRS provider in the country. Other wireless carriers, such as Verizon, manage to serve more customers with less spectrum resources than AT&T by using their existing spectrum licenses, deploying new technologies, and investing in infrastructure. To the extent AT&T can be said to be constrained at all, therefore, any ostensible limitations are the result of years of underinvestment by AT&T in its network and AT&T’s failure to put its existing spectrum to more efficient use – or, in the case of AT&T’s WCS spectrum, to any use at all.”

Heady stuff, but it ignores the fact that the 2.3 GHz Wireless Communication Services (WCS) spectrum bands are a mess. Ever since the licenses were auctioned off in 1997, every major operator owning WCS has tried to find some use for that spectrum, but they all came up with squat. Power restrictions in the band make it useless for any kind of mobile voice and broadband service. And attempts by AT&T and BellSouth (which AT&T acquired) to use it for fixed wireless DSL-replacement technologies fell flat after numerous trials.

The specific C-block and D-block licenses AT&T is trying to sell in partnership with NextWave are even more problematic. They straddle opposite ends of the Satellite Digital Audio Radio Service (SDARS) band used by Sirius XM Radio (s SIRI), requiring any network to have a guard band to prevent interference with Sirius’ radio signals. That means the already small allotment of capacity in each block, 5 MHz, is cut in half.

At worst, AT&T is guilty of putting lipstick on this WCS pig — rouge and fake eyelashes as well — in attempt to find a buyer for the licenses. AT&T pointed out just how worthless these licenses are in its public policy blog after Public Knowledge made similar criticisms of hypocrisy. Yet, the little fact sheet AT&T and NextWave put together to market the spectrum paints WCS in much gentler light. In those materials, AT&T claims that the licenses can be used for all kind of nifty applications: smart grids, supplementary downlink for mobile networks, fixed wireless broadband access, backhaul and one-way broadcast services.

4 Responses to “Does AT&T need more spectrum? It’s complicated”

  1. Whether or not ATT “needs” more spectrum is irrelevant to letting them acquire T-Mobile. Why should they be given access to the spectrum that T-Mobile can use to serve its customers? Is this a new form of eminent domain for corporations? OK, ATT wants to grow, but the country doesn’t need them to grow, if the existing companies can provide that service without merging. Which they can.

    • Kevin Fitchard

      Hi Ken. This is going to be an interesting debate in coming years. This is one of the first topics that Stacey and I started mulling over when I started last week. On the one hand, you’re right: 1 + 1 does not equal more than two. No new capacity is created if spectrum is divided between two entities or is in a single entity’s hands. That said, there’s a huge demand for more and cheaper mobile broadband. That means operators need to achieve better economies of scale. It’s a lot cheaper per bit to run build and run a network with 20 MHz of capacity versus one with only 10 MHz of capacity. But does an operator with so much more market power wind up passing those savings to its customers?