Spectrum Buzz

By John Celentano, Strategic Marketing, TESSCO Technologies

Seems like radio frequency (RF) spectrum, or lack of it, is a hot topic these days.

Consider the recent buzz on spectrum in the industry.

• AT&T, in addition to owning a large block of 700 MHz spectrum along with its 850/1900 MHz holdings for its cellular network, is willing to plunk down $39 billion to buy T-Mobile USA, ostensibly to gain access to T-Mobile USA’s extensive spectrum holdings across the country. If the deal goes through, AT&T gains T-Mobile USA’s existing 1900 MHz spectrum and more importantly, the 120 licenses of AWS (1.7/2.1 GHz) 20 MHz spectrum for which T-Mobile USA paid $4 billion in the 2006 auction.

• Right behind that, AT&T has offered to buy 22 700 MHz licenses from a rural service provider that operates in parts of Minnesota and Wisconsin.

• Verizon already has started its LTE build-out in the 700 MHz band as an overlay to its existing CDMA 1900 MHz network. The company just announced LTE build-outs in 21 new markets starting in June 2011.

• Sprint with its Network Vision architecture intends to recast its customer access to available spectrum by consolidating its holdings across the 800/900, 1900 and 2500 MHz bands.

• On May 20, 2011, the FCC issued a Public Notice inviting technical input on how to maximize the 2 GHz band for fixed/mobile applications.

• WCAI itself has been vocal in calling for channel allocations that are both wider and contiguous in certain bands such as 2.5 GHz. Such adoption by regulators would make use of this spectrum more “effective and efficient.”

Spectrum translates into bandwidth. More bandwidth means wider channels for carrying information. Wider channels mean faster download speeds that can support a greater array of services: high-speed Internet access, mobile voice, and increasingly, video. And more services simply means greater revenues for the service providers.

Where is all this demand for more spectrum coming from? Quite simply, it comes from the surge in usage of data-intensive smartphones, tablets, and mobile-enabled laptops that is driving demand for any speed, anywhere, any media services. If the carriers are going to deliver, they will need access to more spectrum wherever it can be made available.

Consider what happened when AT&T first released the Apple iPhone. In the beginning, the company was pleasantly surprised at the customer take-rates despite the iPhone’s high purchase price. But then, with literally millions of iPhones coming online in major markets in a matter of months, AT&T began to see its network suddenly bog down as all those data-rich devices tried to get a high-speed connection. Clearly, the company was unprepared for the surge in data traffic usage that iPhones generated. Needless to say, iPhone users were not very happy with AT&T’s performance. So the company embarked on a rapid network upgrade program to expand capacity in both the access network between customers and cell sites, and in the backhaul network that connects cell sites to switching centers. AT&T’s current motivation in scooping up more spectrum likely has as much to do with avoiding future network congestion as it does for providing new data-rich services. In this context, all wireless service providers, whether in metro or rural markets, are facing similar capacity issues.

This situation begs the question: how much investment will be needed to build the network that can handle all this traffic?

Two main factors drive wireless capital expenditures (capex) – the number of wireless devices connected to the network, and the minutes of use (MOUs-voice & data) that each device generates. The number of devices is proliferating when you count smartphones, tablets, mobile-enabled laptops, and growing volume of machine-to-machine (M2M) connections for a host of industrial and commercial applications. And each device is churning out ever-increasing megabits per second of information. Taken together, the data traffic load on the network is expected to grow at high double-digit rates annually with no foreseeable deadline. This means that wireless carriers will book, for some time, significant capex as they expand area coverage and increase data-handling capacity, while beefing up the backhaul network throughput.

In the end, this capex pace and duration will be gated by the amount of spectrum being freed up over the next several years. That will create even more buzz!

Our Agreement with Ericsson

Author: Clearwire

We just announced that Ericsson, the industry leader in managed services, will manage the day-to-day operations of the Clearwire 4G network. The seven-year, managed services partnership will allow Ericsson to implement their proven global best practices in network management while allowing Clearwire to focus on increasing operational efficiencies and reducing operating costs.

So what does this mean for the folks that built the nation’s first 4G network? We’re happy to report that approximately 700 Clearwire employees are expected to begin performing their network functions as Ericsson employees in locations around the United States before the middle of this year. This also means that network performance isn’t going to suffer because the work we’re seamlessly transitioning to Ericsson will still be performed by the same skilled and talented network employees who perform the work today.

What about our customers, you say? As we just mentioned network performance won’t be an issue so they’ll still have the same great 4G experience. But also, customers will see no change in their interactions with Clearwire because we will remain the priority point of contact. (The same is true for our wholesale partners and vendors.)

As for the significance of this anouncement? We want to direct your attention to a third-party perspective that we found to be quite profound.

“This managed services partnership is the next logical step for both Clearwire and Ericsson, one that will have significant near -term and long-term benefits for Clearwire’s employees, customers, retail distributors and investors,” observed Berge Ayvazian, Senior Consultant with Heavy Reading. “It also represents Ericsson’s second managed services contract in the U.S., building on the Network Advantage agreement that has already delivered major operational and economic benefits for Sprint.”

In short, while we have entered into an agreement with a company whose core competency is network excellence, Clearwire will continue to own our 4G network and remain responsible for network design, network strategy, vendor selection and long-term investment decisions. Our network is still ours – Ericsson is just managing it – allowing us to streamline the business and deliver a high-quality mobile broadband experience to our customers.

Reprinted from the Clearwire blog.

WCAI to Hold a Webinar on Using Real-Time Analytics on 4G Networks

Next-generation 4G networks will create new opportunities for wireless operators and service providers, but will also present a range of fresh challenges. WCAI will hold a webinar to take an in-depth look at the implications of 4G for the way wireless services are delivered and networks are run. The webinar will focus on the strategic role of real-time analytics in providing the fine-grain data analysis that will enable providers to deliver compelling, revenue-generating new services—while controlling operating costs.

The webinar – "Real-Time Actionable Intelligence Strategies for 4G Operators" – is scheduled for Wednesday, May 18 at 11 am (U.S. Eastern Time). Moderated by Berge Ayvanzian of Heavy Reading, it will feature David Wiseman, Director Telecom Business Development at Sybase an SAP Company. Sponsored by Sybase an SAP Company, the webinar is free of charge and open to all. Register now!

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.

Clearwire and Sprint (peanut butter and jelly, peas and carrots…you get the idea)

By Clearwire

We’re pretty proud of the Sprint and Clearwire match – it’s a partnership that’s been one of the most productive in the U.S. wireless market to date. Together we’ve deployed the first true 4G network in North America and made 4G a household word. So, we’re happy to report that this partnership continues with an updated long-term wholesale agreement between Clearwire and Sprint.

There are a number of details that you can read about here, but the really big news for Clearwire is that Sprint will commit a minimum of $1 billion in cash to Clearwire for 4G wholesale services. This money will be used to support Clearwire’s ongoing operations, and it underscores the interdependent and strategic relationship we have with Sprint.

Our all IP-network is Sprint’s 4G network. (It’s also the same 4G network used by Comcast, Time Warner Cable, Best Buy, Cbeyond, Mitel, and Locus Telecommunications to offer mobile broadband to their customers.) Our unmatched spectrum provides Sprint with a strategic advantage in terms of network capacity. As data usage rises, the need for a rich spectrum portfolio will become even more acute.

With the only 4G wholesale network in the country, coverage for more than 120 million people, and a growing customer and revenue base, we look forward to continuing our partnership with Sprint to deliver outstanding 4G service.

This article is reprinted from the Clearwire blog.

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.”

WCAI 4G Caucus Wraps Up with Discussions on Backhaul, LTE Migration, 3.65 GHz Regulations

The WCAI’s 4G Caucus wrapped up today with a semi-annual, member-only joint meeting of the Engineering and Regional Operator committees. The two-day event generated a lot of productive debates and announcements, including from FCC Wireless Bureau Chief Ruth Milkman, who said the Commission yesterday circulated an NPRM in response to the WCAI’s 2.5 GHz OOBE (out-of-band emissions) petition. The announcement is great news for the wireless broadband industry in the U.S. as it represents an important step toward harmonizing the 2.5 GHz band internationally and realizing the economies of scope and scale.

During the committee meeting’s roundtable discussion today, WCAI members addressed such issues as 4G network backhaul, migration to LTE and the impact it has on regional operators, as well as regulatory issues facing the 3.65 GHz band. Excellent presentations were delivered by LBA Group CTO Chris Horne, DragonWave CTO Erik Boch, Sioux Valley Wireless Technical Director Joel Brick, and JAB Broadband VP, Technical Operations, Bret Westwood. Also at the meeting, WCAI Regulatory Counsel Paul Sinderbrand of Wilkinson Barker Knauer provided a comprehensive update on key regulatory issues facing the industry and advised the members on how best to address them.

We at WCAI would like to thank everyone who helped make the 4G Caucus a success, especially our speakers, sponsors and media/research partners.

We look forward to seeing you again at 4G World on October 24-27 in Chicago. Please use WCAI discount code (4GWMS22) to save $200 on registration and support WCAI.