We filed comments with the FCC yesterday on the proposed purchase of 122 AWS spectrum licenses by Verizon Wireless that are currently held by a group of cable companies including Comcast, Time Warner Cable, Cox, and Brighthouse. In aggregate, the licenses cover a 20MHz national footprint, about 10% as much spectrum as Sprint/Clearwire has today.
The cable companies purchased the licenses in order to build a mobile broadband network that would compete with AT&T, Verizon, and Sprint, but soon discovered that the skills required to do that were outside their wheelhouse; they probably also discovered that running a multi-company consortium is no fun either, but we don’t know that for a fact. As a result, the spectrum is currently lying fallow.
Verizon offered to buy it as part of a complex transaction that would also allow them to bundle mobile phone service with cable broadband for sale to their customers, and which would also allow the cable companies to offer similar “quad play” bundles to their customers. A great deal of the discussion of the transaction focuses on the bundling aspect, but that’s really quite distinct from the spectrum transaction. The FCC has business examining cross-marketing deals, but the rules that apply are very different from those that apply to spectrum.
Spectrum is a vital input to the mobile economy. The more spectrum a carrier has in use, the faster the download and upload speeds it can provide to data customers, other factors being equal. Faster data means more innovation, and that means more jobs and a more robust economy.
Verizon has done a very good job rolling out LTE, as have the other large carriers (AT&T and Sprint) and some of the small ones: MetroPCS was actually the early leader in this area. Because of the efforts and the investments made by these carriers, the United States leads the world in LTE adoption, something you don’t hear as much about as the studies that show us in a middling position with wired broadband.
We can’t rest on our laurels, however. We’re already spectrum-limited in cities such as New York and San Francisco that are challenging to cover, and LTE apps will ultimately catch up with the supply of bandwidth. The U. S. lags our competitors in total spectrum available for commercial use because our government users have larger appetites. Congress had the opportunity to transfer as much as 200 MHz to auction in its recent spectrum auction authorization bill, but backed down to a figure that will most likely come out in the 50-60 MHz range.
With these technical and political facts at work, it’s unacceptable to allow these 122 licenses to go to waste. The FCC has tools to examine spectrum concentration known as “spectrum screens” that should be applied to the transaction. We believe that conscientious examination will show that the transaction is in the public interest and should go forward.
Read our FCC comments here.