FCC to Review Spectrum Screen

September 3rd, 2012 by · Leave a Comment

According to FierceWireless and other reports, the FCC is preparing to revise how it decides how much spectrum is too much. FCC Chairman Julius Genachowski will propose the review with a vote on September 28. They’ll be looking at the rather obvious issue of whether to treat lower frequency spectrum differently than higher frequency spectrum, expecially in the context of M&A.

Of course, they just recently approved such a transfer for Verizon Wireless in which 20Mhz of AWS spectrum changed hands, along with several other related deals. Meanwhile, AT&T is still looking for more spectrum following its failed T-Mobile bid last year. It’s an interesting tug of war: the largest mobile operators feel pressure to acquire more spectrum to compete while the smaller ones complain that they’re the ones that can’t compete because the big guys have all the spectrum.

But perhaps the biggest red herring in all this is that without spectrum there can be no satisfaction of mobile bandwidth demand. Having enough of the right spectrum is about costs, not bandwidth starvation. You can always have smaller and smaller cells with the same spectrum, it’s just so much easier to throw spectrum at congestion than it is to add depth to the network.

The fear is that if the two largest providers own too much of the right spectrum, they will have a permanent structural cost advantage. But on the flip side, Verizon and AT&T seem to live in fear of the mobile data tsunami and consumer outrage if they don’t stay well ahead of it. Every price increase, data cap, and limitation of any sort is scrutinized without mercy these days. More spectrum is the simply the easiest and cleanest way to scale things right now.

But regulators need to address the question of what threshold to set in order to maintain long term competition. How many players do we really need in the wireless sector running parallel, generally equivalent network infrastructure?

If nothing else, however, the FCC’s intention to review the spectrum screen now just seems to reinforce the widespread perception that regulators are years behind when it comes to technology. We should have had this discussion back when we spent a whole year arguing about nothing but net neutrality, but it was less sexy I guess.

Categories: Government Regulations · Wireless

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