Report Outlines Reasons Behind Network Operators’ Unused Spectrum
A variety of operational factors cause carriers to buy extra spectrum licenses without deploying the spectrum, Peter Rysavy said in a conference call about his new report on the subject. “It’s a long-term process from identifying spectrum to when it actually becomes deployed,” he said. “Operators, when faced with the opportunity to obtain spectrum whether or not they need it at that time, really have to obtain it simply because there’s no assurance of when it will become available next.” The report (http://xrl.us/bnc7if) was done independently by Rysavy Research.
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Lengthy time frames in technological deployment and adoption contribute to the spectrum buy-up, said Rysavy, president of a technology consulting firm whose clients have included Verizon Wireless, T-Mobile, CTIA and Microsoft. New network technologies are deployed every 10 years, Rysavy said, listing the previous examples of GSM, UMTS and LTE deployment. However, an 18- to 20-year period exists between the technology’s deployment and peak adoption, he said. Because consumers still use older networks, “incumbent operators, especially ones that have had networks for quite some time, have to manage multiple networks,” he said. “As much as we'd like to think ‘well, just turn off GSM and make that spectrum available for LTE,’ that’s simply not possible.” Uncertain future spectrum availability also pushes carriers to buy additional spectrum, Rysavy said.
Network operators have to consider the investment and possible delays when deploying spectrum, Rysavy said. “I feel that’s misunderstood in the industry that there are a very large number of considerations that go into managing the spectrum.” Increasing demand and whether it’s best to spend a carrier’s infrastructure investment on legacy or new technology outlays factor into the business model, as well as considering how much capacity is needed and the resulting revenue, Rysavy said. “There’s the consideration of keeping service prices as competitive as possible,” he said. “It only makes sense to deploy the amount of spectrum you need to address your current demand.” Incumbent users of the spectrum, necessary infrastructure development, potential problems and regulations can also create deployment delays, Rysavy said.
Network operators will eventually deploy their unused spectrum, Rysavy said. He cited an example from the LTE network. Low demand on the network leads to operators deploying it over a 700 MHz band, but they can add capacity as demand increases by building out AWS, he said. “Over a five-year period there will be a three-year period, at least in this scenario, where you have unused spectrum simply because you don’t need the capacity. But, at some point, you do have to apply that spectrum, and over time all the spectrum does get used."
"NAB looks forward to working with policymakers to implement an incentive auction program that is truly voluntary and preserves the future growth opportunities of local TV stations,” an NAB spokesman responded to the report. The association believes the stations “will choose to remain in the great business of broadcasting,” he said. CTIA and CEA had no comment.