NAB’s Spectrum Paper Misses the Mark

NAB released a study that claims there is no spectrum crisis. Too bad the study doesn’t contain any quantifiable analysis. The study relies on (1) procedural attacks on the FCC, (2) a discussion of networking technologies without sufficient technical or economic analysis, and (4) an argument that the FCC should find spectrum somewhere else.

NAB’s procedural argument attacks the FCC’s own analysis as well as its reliance on evidence produced by independent analysts. NAB complains that the FCC’s decision was based on the forecasts of independent analysts and that the FCC’s technical paper supporting the need for additional spectrum took too long. NAB does not, however, claim that the forecast of the independent analysts were wrong or explain why the FCC’s delay in issuing its technical analysis is relevant to its substance.

In any event, NAB’s sole focus on the findings of the FCC is too narrow. The international community recognizes there is a spectrum crisis as well based on a rigorous technical analysis. According to the calculations of the International Telecommunication Union (ITU), 1,280 MHz to 1,720 MHz (including spectrum already in use or planned to be used) will be needed to support new mobile wireless broadband technologies. (See ITU report here.) Compared to the ITU’s estimate, the FCC’s plan to make available 500 MHz of spectrum in the next ten years is conservative.

NAB’s recitation of potential new network technologies fails because it doesn’t quantify the overall potential capacity benefits of these technologies or their cost. There are limits to cellularization of networks based on physics, economics, backhaul availability, and environmental concerns. The NAB study doesn’t discuss any of these issues. It also doesn’t discuss the extent to which spectrum forecasts have already taken these potential capacity increases into account. Compiling a list of potential network technologies doesn’t qualify as quantifiable analysis.

NAB’s claim that mobile service providers are warehousing spectrum also rings hollow. NAB uses cable operators as its poster children for this argument. But the statements of one set of licensees that hold a mere 10 MHz of spectrum in certain markets do not mean there is no spectrum crisis. Here NAB commits the fallacy of “proof by example” – if one licensee is warehousing spectrum (no matter how little), all licensees are warehousing spectrum. That fallacy won’t fly.

Finally, NAB argues that, if the FCC just made all spectrum in its pipeline available, the crisis would be solved. But the FCC and ITU analyses have already taken this spectrum into account.

Everyone agrees there is a spectrum crisis except the broadcasters – the group from which the spectrum would come. But if NAB really believes there is no spectrum crisis, it wouldn’t worry about incentive auctions. Service providers won’t pay for spectrum they don’t need. Of course, NAB never paid for it either.

WCAI Responds to NAB President Gordon Smith’s Keynote

WCAI President and CEO Fred Campbell released the following statement in response to NAB President and CEO Gordon Smith’s keynote address at the NAB conference:

“Broadcasters say the spectrum crisis would be solved once the mobile broadband providers build out the spectrum they recently acquired at auction. The fallacy here is that demand projections supporting the need for more spectrum already assume all previously auctioned spectrum will be built out. Broadcasters are the ones warehousing spectrum they received for free and use to serve only ten percent of the population.”

UK Recognizes the Need for More Spectrum and Announces Plans for Its Largest Auction Ever

Everyone has probably heard the National Association of Broadcasters’ (NAB) assertion that there is no spectrum crunch. Many have refuted NAB’s claim, including FCC Chairman Genachowski. Further evidence can be found overseas in the UK, which just announced its plans to hold its largest ever single auction of additional spectrum for mobile services in the UK, equivalent to three quarters of the mobile spectrum in use today. The UK regulator, Ofcom, has come to the same conclusion as the FCC: More mobile spectrum is essential to meet the demands of increasing mobile traffic. If the U.S. doesn’t make additional mobile spectrum available as well, it risks falling behind the UK and other countries in mobile wireless innovation. The U.S. shouldn’t allow that to happen.

The National Association of Broadcasters Is Wrong about Spectrum

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.