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No Spectrum Shortage, Just an Allocation Problem

As a new study from Citi Investment Research & Analysis make clear, the US does not have a spectrum shortage. We’ve just allowed a relatively small number of carriers to control the spectrum. Quoting the study’s summary:

“Today, US carriers have 538MHz of spectrum. And, additional 300MHz of additional spectrum waiting in the wings. But, only 192MHz is in use today.”

Perhaps if we had an effective “use it or lose it” policy in place, or a heavy tax on unused spectrum a more vibrant market for this spectrum would emerge. But today, the problem is not a shortage of spectrum but the fact that what’s out there is not being utilized.

Obviously things vary by geography, but Citi’s summary is completely justified. Their methodology is thorough both as to who owns what and what is deployed county-by-county for 3100 separate counties. Here’s the summary of what’s in use:

and here are the details on what’s currently owned by US carriers:

So why would we repack the TV broadcasters and auction off that spectrum when we’ve just finished putting in place unlicensed access to TV white spaces? Unlicensed spectrum will be heavily utilized while more exclusively owned spectrum will just add to the pool of under utilized resources.

By Brough Turner, Founder & CTO at netBlazr

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That's a fairly squirelly analysis Richard Bennett  –  Sep 30, 2011 3:48 AM

The raw data is useful, but has to be taken with a grain of salt. It shows that 280 MHz is currently in use by the four major carriers, and incorrectly lumps in the Clearwire and 700 MHz spectrum (264) with it. 700 MHz hasn’t been cleared yet, and the Clearwire isn’t as useful for mobile as for stationary use.

The National Broadband Plan recommends 300 MHz more for mobile and 200 for fixed, which is conservative on the mobile side and generous on fixed.

We need to clear the TV broadcasters because their spectrum is underutilized. They’ve got 300 MHz for 30 million users, while the mobile networks have 300 users who aren’t going to be satisfied with 70 MHz of 700 Mhz that’s actually in the pipeline so far.

And that's a fairly squirrelly comment, Richard. Brough Turner  –  Oct 3, 2011 1:28 PM

And that’s a fairly squirrelly comment, Richard.  700 MHz is almost completely cleared in any effective market sense and Verizon is using 700 MHz spectrum for their “4G”, i.e. LTE service. AT&T;also has 700 MHz spectrum that’s clear but unused.

And Clearwire’s 2.5 GHz spectrum is not just for fixed. There is an issue that, with today’s technology, higher frequencies require more cell sites, thus capex goes up ~15% if you cover an area using PCS frequencies (1.9 GHz) instead of 700-800 MHz, but that’s independent of whether it’s fixed or mobile whether you are at 700 MHz, 1.9 GHz, 2.5 GHz or 3.5 GHz.  You should expect to see LTE mobile services at everything from 450 MHz to 3.5 GHz depending on where you are in the world.

Issues with LTE phones Richard Bennett  –  Oct 7, 2011 7:52 PM

Amateurs don't seem to realize that the process of buying spectrum at auction, clearing it of existing users, and deploying equipment for the new use is not as simple as buying a Wi-Fi access point and turning it on. In the case of 700 MHz, the ultimate use is LTE, and deploying LTE is much harder on a GSM network like AT&T;'s today than it is on a CDMA network like Verizon's. See this article to understand why: http://www.hightechforum.org/why-apple-doesnt-support-lte-yet-and-why-it-doesnt-matter/ All mobile carriers will tell you that 2.6GHz is no good for their app; the issue is coordinating/synchronizing between towers. While this can theoretically be done, it's very difficult in practice to bond an 800 MHz channel with a 2.6 GHz one.

Yes, the issue is with the technology, not the need for spectrum! Brough Turner  –  Oct 7, 2011 8:10 PM

Indeed, we need another generation of silicon before we can combine LTE (for data) with 3G (for voice) and the LTE gear for 2.6 GHz is behind that for 700 MHz. I know that. My point was the spectrum claims are exaggerated. Also note, no one is planning to "bond" a 2.6 GHz channel with an 800 MHz channel. The issue is building chips, amplifiers and antennas into the handset that can alternately support 3G, LTE and WiFi in various bands. i.e 3 radios in 5-8 bands. It's a difficult technical problem and selling the mobile operators more spectrum won't make this any easier. (And it won't raise enough money to make a dent in the national debt).

Disagree with your main point Richard Bennett  –  Oct 7, 2011 8:15 PM

The spectrum claims - the fact that LTE networks need twice as much spectrum as the mobile operators have today - are uniform around the world and are not at all exaggerated. The claims that I find impossibly naive are the DSA and Open Spectrum fantasies that presume forms of CSMA that can't actually exist (because of latency.) But it's a free country, trust the bankers if you wish.

Interesting premise Christopher Parente  –  Oct 5, 2011 8:13 PM

I wanted to check out the new report for myself, but FYI your link is broken.

Citigroup document no longer public... Brough Turner  –  Oct 6, 2011 4:34 PM

Well this is interesting.  Not only is the link dead, but the document itself completely disappeared from anywhere on the web, at least for a day or so.  It was originally posted by the National Association of Broadcasters, not by Citigroup, so perhaps Citigroup objected to their work being publicly posted. 

In any event, once something is out on the net, it’s unlikely anyone can get it back.  Currently (6 Oct 2011) the report is available here:
and I have a copy on a local hard drive if this goes away.

Thank you -- that link works. Christopher Parente  –  Oct 7, 2011 2:51 PM

Thank you—that link works.

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