700 Interoperability Mandate Presents Tough Issues to Work Through, Milkman Says

Small carriers hope that 700 MHz interoperability will become a key focus of the FCC, following approval of a data roaming mandate at the April commission meeting (CD April 8 p1). Small carriers are worried that without an interoperability mandate manufacturers won’t make affordable handsets for Band 12, covering the spectrum they bought in the 700 MHz auction. The spectrum AT&T and Verizon Wireless bought in the 2008 auction is primarily in Bands 13 and 17 (CD Oct 8 p1).

"Interoperability in a variety of contexts is something that the commission and stakeholders have highly valued,” Milkman said. “As the commission works to facilitate the development and deployment of affordable broadband to all Americans, it can play an important role by helping realize economies of scale and thereby lowering costs, and by enabling roaming.” But Milkman said the FCC also has to take into account “the realities of engineering, economics and other practical considerations."

The FCC is closely following global issues related to 700 MHz and broadband, Milkman said. Starting last summer, Tom Peters, the bureau’s chief engineer, started attending standard setting meetings where LTE standards were debated, she noted. Commissioner Mignon Clyburn attended part of Tuesday’s workshop as a member of the audience but did not speak.

"We have to have a required interoperability solution in order to aggregate the scale and to drive this forward,” said Eric Graham, vice president at Cellular South, a small carrier that bought 700 MHz spectrum. “When you look at a scale-driven business and you realize where this problem rates globally, it makes more acute the need for … an interoperability requirement from the commission.” Graham noted that 700 MHz “is uniquely a U.S. issue” and that AT&T and Verizon rank well down the list of customers of a major international provider like Qualcomm. “Where does that put Band 12?” he asked.

Regulation has a cost, but so does the lack of regulation, said panelist Matt Wood, associate director of the Media Access Project. “What we're talking about here is the ability of large, dominant firms at times to impose costs on their competitors, to raise the costs that their competitors have for equipment acquisition and deployment,” Wood said.

Stacey Black, assistant vice president for market development at AT&T, said imposing interoperability mandates on carriers would delay 4G rollout in the U.S. An interoperability mandate “would force us and our manufacturing partners to start over and switch to new bands, which would require substantial and additional development, testing and trials.” Black said a mandate would slow consumer adoption of 4G. “Modern chipsets … can only support two bands under one GHz for broadband,” he said. “Forcing carriers to incorporate two 4G bands into all 700 MHz devices would foreclose backward compatibility with legacy mobile broadband networks.”

The FCC also shouldn’t change the rules after an auction in what effectively constitutes a “bait and switch” maneuver, Black said. It was understood before the 700 MHz auction that the 700 MHz A-block, mostly purchased by smaller carriers, posed particular interference issues, he said. “Those difficulties are fully reflected in the fact that the A-Block group carriers won licenses in that spectrum at considerably lower winning bids.”

Graham responded that standard-setting body 3GPP did change the rules of the road following the auction. In the months after the 700 MHz auction closed in April 2008, 3GPP agreed to divide Band 12, covering the lower A, B and C blocks, into three different bands. “Since that time development proceeded at a rapid pace for Band 17 and stagnated for Band 12,” he said.

Panelist Michael Chard, a senior director at Qualcomm CDMA Technologies, said his company manufactures chipsets serving small markets and will release a chipset for Band 12. “Qualcomm has heard the requirement, heard the demand,” he said. “Scale is always important in this business but it’s not the only requirement that we look at.” Chard said he could not comment on the relationship between scale and cost, saying those questions are better directed to handset manufacturers.

Requiring handsets to work across multiple bands creates potential problems, said Bill Stone, executive director of network strategy at Verizon Wireless. “There’s always tradeoffs,” Stone said. “I personally think the biggest challenge is the size of the device. Each band you add to the device requires additional components and exactly how much volume is consumed varies.” Lower frequency bands are more challenging because of the size of the components, he said. “At the high end, that can add up to 10 percent or more in additional volume for each low frequency band you add to the device.”