In the wake of the unprecedented boom in mobile broadband, pressure is building around the world for governments and regulators to act quickly and decisively to the frantic demand for more spectrum.
The telcos are leading the charge, but the broadcasters are lobbying for their case equally vigorously. The broadcasters do not necessarily need all the spectrum they currently have, but they view mobile broadband and telcos as competitors to their monopoly on video entertainment, so they will do everything to keep them out of that market for as long as possible.
The result is that many others who need spectrum find themselves in the middle of this conflict. Because of high commercial interests, other sectors such as public safety, utilities, transport and infrastructure are also forced to review their business models. Simply asking for more spectrum and then possibly wasting it through a myriad of proprietary systems is no longer an option. Cooperation and coordination is required in sectors where egos and financial interest are clashing.
From a technical perspective, there is a consensus of opinion that 4G is the way forward. This is based on open systems such as LTE for outside the building, complemented with pico-cell technologies to extend the services inside the building. These technologies can deliver the video-based and high-speed data services that are currently needed by every organisation using mobile telecoms services.
Of course open systems would also reduce costs quite significantly, which would have far-reaching consequences for public safety operators in the USA which are currently paying as much as four to 10 times more for their equipment than those operating similar services in Europe or Asia. Obviously those proprietary vendors have a vested interest to argue against open standards. While Motorola's P25 is in theory an open standard. The problem is the company controls both the market and the standard and there is no ecosystem supporting this standard in the competitive market sense.
Security is often put forward as a reason to not coordinate and cooperate. However, all open standards do offer quality security and ways that allow for the prioritisation of traffic from the public safety sectors, which generally is not much more than 1% of total mobile traffic.
However when all of the above is considered, very strong lobby forces emerge, eg:
The incumbent operators which currently dominate the market, AT&T and Verizon, do not want to see more spectrum freed up because they are now sitting in a very favorable position, particularly in low frequency cellular spectrum where they effectively control the use of 85% of the available spectrum as measured by population served in the original cellular spectrum in 800MHz and the recently auctioned spectrum in 700MHz. This is the "beachfront property" with much lower costs to build for 4G and much better coverage and in-building performance.
This is exactly where AT&T and Verizon want to be. They do not want more spectrum to be made available in the near future, particularly if the FCC, as it may well do, puts spectrum caps or other mechanisms in place to make sure a reasonable amount of spectrum is available to other players. What AT&T and Verizon want is to see spectrum tied up in regulatory/legislative battles while they consolidate their monopolistic positions. They have fine-tuned their legal approach and know that they can play the regulatory system game for another five to 10 years.
An attractive alternative to the incumbents would be for the spectrum to be dedicated to government use. The statutes require the 10MHz of D-block which was not sold in the last 700MHz auction to be allocated to commercial use. But the public safety community and Motorola (which is trying to protect its monopoly in the public safety market) and, behind the scenes to some extent the incumbents, are working hard to get the 10MHz D-block assigned to public safety, even though public safety already has its own broadband spectrum above the D-block.
The idea behind all of this is to take that spectrum off the market so that T-Mobile, Clearwire or LEAP cannot get access to it. T-Mobile's position is already weakening in the market, and this what the incumbents want to see.
In addition, much of the interesting spectrum below 1.5GHz in the USA is controlled by the Federal Government and much of that is woefully underutilised. Taking spectrum away from the military, for example, is even harder than getting it away from broadcasters.
The FCC would like to use spectrum as a way of restoring competition to the wireless market so as to return to the halcyon days of the late 1990s when there were four to six player markets in most parts of the country. In those days features, penetration and usage went up and prices went down: that is, competitive markets worked.
Unfortunately, the reality today is that it may be already too late to have anything other than a dominant duopoly market, particularly now that Google and Apple are supporting the incumbent duopoly through various agreements.
As an example of the unmanageable complex spectrum situation in the USA, the Federal Government's military spectrum is not even under the jurisdiction of the FCC — it is under the jurisdiction of NTIA (National Telecommunications and Information Agency), a branch of the Department of Commerce. So it will be another problem to be faced to free up the hundreds of MHz of spectrum the FCC is hoping for.
All hope is now focussed on Congress, which may support the FCC's proposal and not give its support to the incumbents.
However, because very few people watch broadcaster content over the air in the US, they do not need the spectrum for services. Instead, broadcasting over the air gives broadcasters the right to demand the cable TV providers carry their channels in the local markets they serve under the FCC must-carry rules. So owning broadcast spectrum is a very important bargaining tool. Unless Congress changes the law to guarantee local 'broadcasters' can get their content onto other broadband networks (ie, cable, telco broadband, satellite), then broadcasters will hang onto their spectrum for dear life.
Decisive political action would be required to resolve these issues, and unfortunately that is something that is currently in short supply in the USA.
Nevertheless the FCC is very knowledgeable about the complexity of this situation and very realistic to know that, in order to free substantive spectrum in the 2015 to 2020 timeframe, the battle has to start now. The question will be if the USA can afford to take such a long time to catch up with the rest of the world and thus fall further and further behind in the digital economy, while Chinese companies such as Huawei and ZTE are rapidly overtaking Motorola and other American companies.
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