Dennis Wharton of the National Association of Broadcasters (NAB) is irked by the wireless industry comments to eliminate spectrum waste and he wants to draw attention to the wireless industry’s own dirty laundry.  Wharton points out that Dish Network and Time Warner Cable might be hoarding some of their auctioned spectrum to speculate on future value and that there is potentially $15 billion dollars of spectrum being hoarded.  But even if there is $15 billion of spectrum hoarding (and much of that spectrum will eventually be used), it does not justify $70 billion of spectrum being waisted in the form of white spaces by TV broadcasting.

There’s been much media criticism of the wireless industry for alleged spectrum hoarding, but the problem isn’t that simple.  Former FCC chief economist Thomas Hazlett who has studied the spectrum market for years stated the following when asked about spectrum hoarding by the wireless industry.

Thomas Hazlett –

The 534 MHz (auctioned to the wireless industry) is way over-stated.

First, through 2009, only about 200 MHz was being used by mobile carriers. That includes 50 Cellular, 120 PCS, and about 20 for SMR (the former dispatch licenses turned into mobile phone spectrum by Nextel).

Second, there were (finally) big auctions in 2006 (AWS) and 2008 (700 MHz). These yielded 90 MHz of licensed spectrum (AWS) and 70 MHz (700 MHz – counting previous auctions in 2002/03). This bandwidth was encumbered. The 700 MHz licenses had TV stations broadcasting on many of them until to June 2009, and still have wireless microphones and (maybe) low power TV broadcasts. It’s not a big issue because most of the bandwidth, owned by AT&T and VZ, is being used for LTE — and this is not yet rolling out. The AWS spectrum is encumbered by government users, and it’s a problem for T Mobile and other carriers who paid the $13.9 billion in 2006. They’re still clearing the band.

Third, there are the 2.5 GHz licenses that Clearwire and some smaller players are aggregating to provide WiMax services. There is up to 190 MHz available here. But it is fragmented insanely, and the companies have to piece together most of the bandwidth via long-term contracts with non-profit educational institutions — Catholic churches, community colleges, etc. How much can be effectively deployed is not publicly known. Clearwire claims that it has something like 90 MHz covering about 120 million pops. And they’re the biggest play, by far, here. Given the licensing problems and the technology problems (WiMax not scaling, not blowing away 3G let alone LTE), and the inherent cost disadvantage in building new networks from scratch (against carriers upgrading 3G to 4G), this spectrum is not yet effectively competitive in the wireless space.

So, when you get down to it, we now have something like this:

190 — deployed by cellular carriers
190 — 2.5 GHz potentially deployable for wireless broadband
160 — likely to be soon deployed by carriers (AWS, 700 MHz)
—–
540

Tossing in the 190 for the 2.5 GHz licenses is dubious, and the fact that the FCC waited so long to auction the AWS and 700 MHz licenses makes this spectrum a future play rather than currently deployed bandwidth. The additional 50 MHz is from AWS-2, and I don’t know how fast the FCC is going to move on that. Could be years. It’s already been four years since the AWS-1 was auctioned.

This isn’t to excuse the comments by Dish Network executives, but Hazlett highlights the fact that the problem of spectrum hoarding is complicated and that it is often overstated.  Bad behavior isn’t the norm in the wireless industry and the major wireless carriers use their spectrum very efficiently and they are in the process of deploying newly auctioned spectrum.  We should address spectrum hoarding and speculation in future auctions but it should not be a reason to halt spectrum waste reclamation in TV broadcasting.

Professor Hazlett offered a detailed proposal for reclaiming that wasted spectrum by eliminating broadcast TV and paying the private sector serve the roughly 10% of our population who don’t have subscription TV from one of the existing MVPD providers.  I offered a slightly different proposal that would leave 40 MHz intact and reclaim 254 MHz of spectrum which gets most of the spectrum back but eliminates the need to create an alternative to broadcast TV which carries the risk of a permanent TV service entitlement.  I like Hazlett’s proposal but I am biased towards my own, but both proposals are vastly superior to the status quo.



[Cross-posted at Digital Society]