Spectrum Sharing Gets More Attention

"It seems the spectrum narrative has begun to shift in the aftermath of incentive-auction-legislation passage and … in light of lowered expectations for freeing up additional airwaves in the near term,” said analyst Jeff Silva of Medley Global Advisors. “A new narrative appears to be evolving that suggests in the strongest language to date that a multi-prong approach that includes spectrum repurposing, federal-nonfederal spectrum sharing, spectral efficiency and other measures will be required to accommodate hyper-demand for wireless data in a spectrum-constrained environment.” Further mergers and acquisitions “do not appear to be an explicit element of the new narrative, but one would assume wireless carriers believe M&A to a prominent option,” Silva said.

Coming M&A “poses a bit of a quandary for the Obama administration as it grapples with how to interpret secondary-market transactions that provide greater access to spectrum, but may also give rise to competitive concerns in a maturing, capital-intensive wireless industry that’s transitioning to an LTE technological platform,” Silva said. “It’s a difficult balancing act, and policy choices are not necessarily obvious.” It “doesn’t appear that there’s a clean, linear path to meeting mobile broadband demand in the future,” he said.

The NTIA is “committed” to President Barack Obama’s “ambitious goal to nearly double the amount of commercial spectrum available this decade,” Administrator Larry Strickling said in a written statement last week after Genachowski discussed the sharing test. “We look forward to working with the FCC to explore spectrum sharing opportunities in the 1755-1850 MHz band. In collaboration with federal agencies and the wireless industry, NTIA and the FCC will work to identify sharing solutions that can enable spectrum to be put to commercial use more quickly and in a more cost-efficient manner than attempting to move all federal operations from the band. Together, we can make more spectrum available … while protecting vital government missions."

"The answer to carriers’ concerns, and the antidote for their trade-show induced pessimism, is spectrum sharing,” said Free Press Policy Director Matt Wood. “It’s something they already rely on heavily, if you look at the Wi-Fi offload data, yet always seem hesitant about embracing in policy discussions. Whatever happens in the short term, there is a limit to how much more we can clear and auction. Carriers should focus less on capturing spectrum for exclusive use, and more on capturing the benefits of shared use, smart radios and upgraded networks to improve their capacity.”

Carriers are starting to embrace sharing and other solutions, said Public Knowledge Legal Director Harold Feld. “The reality is (as we have said for some time) that carriers have been guilty of wishful thinking in believing they could get enough spectrum from broadcasters or the federal government to meet all their future needs,” he said. “Unfortunately, because the government makes money from auctions, the White House” has been an “enabler” in “perpetuating the belief that we could get more spectrum to auction sooner than reality has shown,” Feld said. “Carriers also failed to appreciate how much the fact that LTE needs relatively large blocks of paired spectrum -- as opposed to WiMax, which could work reasonable well on unpaired -- would make it harder to find spectrum.”

Even carriers that appreciated the challenges “are probably disappointed,” Feld said. “I think that surprised a lot of people that, despite the full engagement of the White House and bipartisan support creating the best political environment in history, the broadcasters and the Defense Department still have considerable power to protect their spectrum. But as is also common, disappointment when reality sets in makes the situation look more dire than it really is. We are seeing a lot of innovation in things like spectrum sharing and spectrum efficiency.”