Verizon Wireless Adamant on Need for AWS Spectrum to Meet 4G Demand

Usage projections suggest that traffic on Verizon Wireless’s LTE network will surpass data usage on its 3G EVDO network by early 2013; and by the end of 2015, LTE traffic will be five times the peak data traffic ever carried on its EVDO network -- and even those estimates could be overly conservative given that the carrier has consistently underestimated growth in consumer demand, company execs told Wireless Bureau officials, according to an ex parte filing (http://xrl.us/bm8imv). “PCS refarming is part of Verizon Wireless’s LTE plan to help handle the further increases in traffic that will occur, but it is in addition to and not an alternative to the AWS spectrum,” the carrier said. PCS refarming alone will not be adequate to protect customers from experiencing service degradation, the carrier said, providing maps that depicted projected LTE capacity constraints in two markets.

Deploying LTE on less than 10 MHz, while possible, is an inefficient way to add capacity; in addition to limited throughput, overhead and signaling take up greater bandwidth, the carrier said. “This can create a ping pong effect, bouncing traffic from larger channels to smaller channels and forcing traffic onto smaller channels to the detriment of the user experience,” the company said, arguing its evidence “demonstrates once again that grant of the proposed license assignments will serve the public interest."

Verizon Wireless also dismissed the arguments of MetroPCS, which said the carrier’s plans to sell its A- and B-block licenses is in effect an “admission” that the company does not need the AWS spectrum it plans to acquire from the cable companies (CD Apr 30 p14). “That has matters backwards,” attorneys representing Verizon Wireless said in a letter Thursday responding to the allegations. The carrier needs the AWS spectrum to meet growing demand for services that run over LTE, it said. “Verizon Wireless is willing to consider sale of its 700 MHz A and B block spectrum precisely because the AWS spectrum at issue here offers a more cost-effective and spectrally efficient way for Verizon Wireless to expand capacity on its LTE network and meet customers’ demands,” Verizon lawyers said.

MetroPCS’s assertion that the spectrum deals would remove the cable companies as potential roaming partners is baseless because the cable companies in question do not sell or purchase any roaming services, the carrier said. Verizon Wireless’s deployment of the spectrum will actually increase the amount of spectrum capacity available to support roaming by other providers, it said. Verizon also dismissed MetroPCS’s allegation that SpectrumCo engaged in trafficking with regard to the AWS spectrum, pointing to SpectrumCo’s “extensive and time-consuming efforts” over several years to investigate the provision of mobile broadband service on the AWS spectrum. The group of cable companies only decided to sell the spectrum to Verizon Wireless after carefully concluding there were “substantial financial risks” associated with its own construction of a wireless network. “Neither MetroPCS nor any other party has provided any facts to support a claim of trafficking,” Verizon said.

Level 3’s concern that the spectrum acquisition might improperly restrict competition for the provision of wireless backhaul and special access, because there will be less business for Level 3 and other competitive providers, has “no place in this proceeding,” the carrier said (http://xrl.us/bm8ixm). Level 3 had argued that the backhaul market would be subjected to additional constraints on competition because of certain sections of the Verizon Wireless agent and reseller agreements for Time Warner Cable and the other cable companies (http://xrl.us/bm8ix6). But the marketplace for high-capacity services is competitive, the carrier said, and “to the extent that Verizon Wireless does purchase backhaul services from the MSOs, such purchases will only strengthen a competitor to ILECs and CLECs in this space and thus enhance competition overall.” Arguments to the contrary belong in an industry-wide proceeding about backhaul facilities, not docket 12-4, the carrier said.

Comcast executives met with Wireless Bureau Chief Rick Kaplan Tuesday to reiterate “why the proposed transaction will serve the public interest by putting currently unused spectrum in the hands of a carrier that will use it to meet consumers’ skyrocketing demands for mobile broadband services,” according to an ex parte filing posted Friday (http://xrl.us/bm8iyp). The spectrum sale and separate commercial agreements present the “best and most efficient short- and long-term solution for Comcast to provide its customers with wireless services,” said Comcast, one of the cable companies proposing to sell its AWS licenses to Verizon Wireless.

T-Mobile representatives met with officials from several FCC bureaus to discuss the declaration of an economics professor who concluded the public interest wouldn’t be served by the transfer of an “inappropriate concentration” of scarce spectrum resources to Verizon Wireless (http://xrl.us/bm8i4p). Yale Professor Judith Chevalier said Verizon Wireless doesn’t have an immediate need for the spectrum, but the spectrum is valuable “because it forecloses competition,” T-Mobile said.