It appears that the National Association of Broadcasters (“NAB”) is trying to thwart incentive auction legislation by arguing there is no spectrum crisis. In a letter sent to the leaders of the Senate and House Commerce Committees, NAB claims that wireless carriers are sitting on $15 billion of spectrum. They base this claim on an article published by dailywireless.org.
The article’s allegation that wireless providers are sitting on spectrum is just plain wrong. For example, the dailywireless.org article claims that AT&T won’t use its 700 MHz spectrum anytime soon (even though it will begin deployment this year), and that “[t]elecommunication companies should loose [sic] it or use it.” The reality is that, if 700 MHz licensees don’t use their spectrum in a timely manner, they will lose it. The buildout requirements applicable to the 700 MHz band are the strictest the FCC has ever adopted and were designed to ensure that 700 MHz licensees quickly deploy next generation 4G networks based on the LTE standard. Those FCC standards already contain a “use it or lose it” provision that provides more than enough incentive for rapid deployment at 700 MHz. (Disclaimer: I was Chief of the FCC’s Wireless Telecommunications Bureau when the 700 MHz rules were adopted and the auction was held.)
The author of the article apparently believes wireless providers should have begun deploying their 700 MHz networks the moment they received their licenses. Of course, that was impossible. New standards and hardware need to be developed whenever a new spectrum band is made available, which takes time. Hardware designers hadn’t even begun designing chipsets, test equipment, and base stations for LTE when the 700 MHz auction was held, and the LTE standard continues to be further refined and developed. Given this reality, the timetables for deployment in the 700 MHz band are very aggressive: These networks are already under construction only a few years after the auction was held and are relying on the earliest hardware implementations of the LTE standard. In contrast, the broadcasters’ transition from analog to digital took more than 20 years. Work on the digital television standard began in the late 1980’s, but the digital transition wasn’t complete until 2009 – and even then it was the result of a Congressional mandate rather than the voluntary efforts of the broadcasters.
The facts also show that even this aggressive deployment of 4G networks on current spectrum won’t be enough to satisfy consumer demand. AT&T’s mobile network traffic increased 5,000 percent after it began offering the iPhone, and data usage levels continue to rise. If more spectrum isn’t made available, service providers will face a spectrum crisis as early as 2014. America can’t afford to let this happen, and American consumers won’t stand for it.