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New FCC Rules Try to Curb AT&T, Verizon Spectrum Squatting
by Karl Bode 06:22PM Thursday May 15 2014
While it didn't get the same attention as net neutrality, the FCC today voted 3-2 along partisan lines on new policies the agency claims will limit spectrum squatting and open the nation's wireless duopoly up to a little additional competition. One issue involved adopting rules for next year's 600 MHz incentive auctions that will marginally restrict AT&T and Verizon's effort to acquire more spectrum by changing the "spectrum screen."

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Last year the Department of Justice warned the FCC that companies like Verizon and AT&T were hoarding and squatting on spectrum, a practice that quite intentionally works to keep potential smaller competitors at bay.

Under the FCC rules proposed today, the FCC would split spectrum in each market into "reserved" and "unreserved" categories only once the auction passes a particular, as yet undetermined bid threshold. Reserved spectrum would be dictated by demand in a specific market, and if demand is light, the rules would be lifted entirely.

The FCC also stated that any wireless carrier that currently holds less than one-third of available low-band spectrum in a market can bid on any spectrum, regardless of it being reserved or unreserved. There's also limits on how much spectrum can be reserved, depending on how much spectrum TV broadcasters have been willing to give up for auction. Smaller, regional providers (who'll be gobbled up in time anyway), face no restrictions.

"The two largest nationwide mobile wireless providers (AT&T and Verizon) hold a combined share of approximately 70% of all low-band spectrum licenses," the FCC stated in a fact sheet. "The other two other nationwide providers (T-Mobile and Sprint) hold a combined share of approximately 15% of all low-band spectrum licenses."

While the rules really only are a modest step toward stopping squatting and opening competition after years of pretending the problem didn't exist, Republican FCC Commissioners voted down the rules. New Commissioner Michael O'Rielly declared the rules "corporate welfare for certain multinational companies with large market capitalizations and access to global capital markets." That almost perfectly mirrors Verizon's complaints about such rules in a letter to the FCC earlier this month.

"I am confident that the wireless industry, including providers of all sizes, will rally around the rules," FCC boss Tom Wheeler stated, adding that the rules could change if the market shifts (read: Sprint successfully acquires T-Mobile). After writing about the industry for almost fifteen years, a good rule of thumb on judging whether a new policy or rule will really help consumers is whether AT&T hates it. That's not always true, just 99% of the time.

AT&T had previously broadly declared that any restrictions on what spectrum they could bid on would be "unlawful." However, in a statement on the new rules, AT&T seemed perfectly happy with what the agency is proposing, suggesting there's so many caveats on the rules, AT&T probably won't ever bump into any of them.

"While many important issues remain to be resolved, we believe that the spectrum aggregation and auction rules adopted today represent a significant step forward and will demonstrate to broadcasters that the incentive auction can and will attract significant carrier interest and demand," top AT&T Lobbyist Jim Cicconi said in a blog post. "While we have long opposed auction restrictions and set asides, the compromise framework will give AT&T a fair shot to participate at auction for a meaningful 600 MHz footprint.

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Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
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·Embarq Now Centu..
·Comcast
·CenturyLink

Blame consoldation of baby bells and wireless carriers.

When cellular licenses were granted in the early 80's there were two blocks of frequencies assigned, the A block to the local telephone company and the B block to a competitive cellular company. In South Florida initially Bellsouth was assigned the A block and Cellular 1 the B block. Bellsouth Mobility eventually became Cingular. AT&T acquired Cellular 1 then Cingular and wound up with all of the 800MHz frequencies in South Florida.

gwhall007

join:2001-11-12
Niles, MI

It's all T and VZ's fault...

I'm curious why I never see Karl criticize companies like Dish, who buy a bunch of spectrum with no intention of actually building anything out? Are they not "spectrum squatting"? Why does it seem only T and VZ get the brunt of all the criticism on this site? Ever heard of reporting neutrally? Or, is this "news" page really just an editorial page masquerading as a news page?
davidhoffman
Premium
join:2009-11-19
Warner Robins, GA
kudos:3

Re: It's all T and VZ's fault...

I do not know about Karl, but I put Dish in the same category as Cox. Grandiose plans of cellular usage by newcomers that sputter and die once the real costs of deploying cellular become more apparent to delusional executives. The cellular companies on the other hand are more suspect, as they knew, or should have known, what network buildouts would cost. Some of the problem is that the frequencies they acquired require lots of towers due to the lack of penetration higher GHz frequencies require.

JasonOD

@76.16.77.x

Re: It's all T and VZ's fault...

Blame the FCC for setting the rules then. These companies are only doing what's best to manage their future growth in the market.

bigballer

@205.214.216.x
FCC should implement a new rule:

If a company is holding spectrum but does not utilize it in the next "X" years, said company should be forced to surrender the spectrum back to the FCC.

RARPSL

join:1999-12-08
Suffern, NY

Re: It's all T and VZ's fault...

said by bigballer :

FCC should implement a new rule:

If a company is holding spectrum but does not utilize it in the next "X" years, said company should be forced to surrender the spectrum back to the FCC.

I agree. In lieu of allowing them to squat on the spectrum for "X" Years, there should be milestone percentage placed into use quotas that must be met. The first milestone should be set for no longer than 9 months to 1 year after granting. The final mile stone should be at the 3 or 4 year point. Failure to meet any milestone confiscates all the remaining unused spectrum with NO refund on the payments. The confiscated spectrum should automatically be offered to the second place bidder to pick and choose from with the third place bidder getting a crack at what the second place bidder passes on. The milestone rules would apply to these reclaimed spectrum when re-offered.

gwhall007

join:2001-11-12
Niles, MI

Re: It's all T and VZ's fault...

The FCC already has such rules they impose on the carriers, but not, apparently, on the third party entities like DISH, who buy spectrum and sit on it for years and never build anything. The carriers, on the other hand, have build out requirements they have to meet for their 1900 and 850 spectrum holdings, at least. I am unsure about the build out requirements, if any, for the 700MHz and AWS licenses, however.

gwhall07

@50.182.54.x
said by gwhall007:

Or, is this "news" page really just an editorial page masquerading as a news page?

It has always been an editorial page, with the editor commenting on broadband news.
Happydude32
Premium
join:2005-07-16
kudos:1
Getting tech news from this biased site is like getting respectable journalism from supermarket tabloids. This site and it's so called editor Karl are the tech news equivalents of the National Enquirer
Skippy25

join:2000-09-13
Hazelwood, MO

1 recommendation

Re: It's all T and VZ's fault...

You do realize that you can use www.google.com to find other sites to get your "tech news" from right? I am pretty sure nobody would miss you if you stopped coming and posting.

That is of course if they are paying the proper tolls to have their content delivered to you when you request it.

ptrowski
Got Helix?
Premium
join:2005-03-14
Putnam, CT
kudos:4
said by gwhall007:

I'm curious why I never see Karl criticize companies like Dish, who buy a bunch of spectrum with no intention of actually building anything out? Are they not "spectrum squatting"? Why does it seem only T and VZ get the brunt of all the criticism on this site? Ever heard of reporting neutrally? Or, is this "news" page really just an editorial page masquerading as a news page?

Ever hear of a private website? Maybe also ever hear of an editorial? Also ever hear that you can write your own story and get paid for it here at dslreports?
--
"So, Lone Starr, now you see that evil will always triumph because good is dumb."

Have you been touched by his noodly appendage? »www.venganza.org

gwhall007

join:2001-11-12
Niles, MI

Re: It's all T and VZ's fault...

Maybe ever read the DSL Reports front page where these articles are listed under the heading of "news", not "Editorials" or "Opinions"?

ptrowski
Got Helix?
Premium
join:2005-03-14
Putnam, CT
kudos:4

Re: It's all T and VZ's fault...

Yes, and there are links to news posted by Karl along with his opinion on said news.
BiggA

join:2005-11-23
EARTH

Ridiculous

There is already way too much wireless spectrum out there. They should stop putting any more out there and do a better job managing what's already out there.
elefante72

join:2010-12-03
East Amherst, NY

Re: Ridiculous

What they should do is make it whitespace.

That would fix your cell bills instantly, and open up rural competition for wireline as well. All with a magic wave of a pen, but alas our government is fat and has diabetes. Their insulin is control, and their sweets are the taxes collected.

Its a death spiral...

bigballer

@205.214.216.x

Re: Ridiculous

I'm down to make it whitespace. The hell with Comcrap

Whatever happened to the alleged "whitespace" that was freed from the analog to digital tv conversion. I thought Google, Microsoft, etc. were down to make use of that spectrum
silbaco
Premium
join:2009-08-03
USA

Re: Ridiculous

The big tech companies always talk but they rarely actually get their hands dirty. The press and tech blogs are/were far more interested in whitespaces than the actual industry.
BiggA

join:2005-11-23
EARTH

2 recommendations

No, they should keep it TV. There is way more wireless bandwidth than we need. There needs to be a universal fiber buildout nationwide as well. There really isn't a reason that anywhere with a road and power/phone to it should use wireless. The government should do what they did in the '50s with telephone and build out GPON fiber to every last nook and cranny of the country. It's pathetic that we have areas that are stuck on satellite internet. In this day in age, everyone should have gigabit. FIOS could go gigabit with the flip of a switch, but no other large ISPs have a widespread gigabit system in the field.

weaseled386

join:2008-04-13
Port Orange, FL
Reviews:
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Re: Ridiculous

said by BiggA:

build out GPON fiber to every last nook and cranny of the country.

I assume you have a plan of who will pay for it, and where the money would come from?
BiggA

join:2005-11-23
EARTH

Re: Ridiculous

The incumbent telcos should pay for most of it, with USF and other funding paying for the rest. It's just not that expensive in the whole scheme of things.
silbaco
Premium
join:2009-08-03
USA

Re: Ridiculous

What do you consider not expensive? It would easily cost $100's of billions to build out a national fiber network. GPON would probably be the cheapest but it wouldn't even be wise to build anymore since Active Ethernet and the experimental WDM-PON are far more future proof. And GPON simply does not have the capacity to reliably deliver gigabit speeds and still maintain a cost-effective split.

The incumbent telcos do not have anywhere near the cash needed to build out a fiber network. And what would happen to existing fiber networks built across the country, including the ftth networks that pass roughly 30 million homes? The docsis and copper networks? The mountains of debt companies carry from building/upgrading existing networks? You want the companies to foot the bill of building the networks and then force them to allow competitors on their lines? All while telling them they have to offer gigabit service at a reasonable cost?
BiggA

join:2005-11-23
EARTH

Re: Ridiculous

Active Ethernet makes no sense because it requires power in-between the CO and the user, so it's not reliable. WDM-PON is very interesting, so maybe that's the tech to use, and it's not experimental, as Google Fiber is using it. However, GPON already gets a 32 users per strand, so it's a good technology, and the next version will support something like 10 gigs per strand. GPON can reliably deliver gigabit speeds. It has 2.4gbps down for 32 users, which is a far lower oversubscription rate than cable uses today with far less bandwidth to work with in the first place. If GPON gets congested, you might only get 500mbps for a very short period of time. Oh the horror! Only 500mbps!

FIOS is basically ready to go with gigabit, they would just have to run Ethernet on GPON setups, and BPON gear would need to be upgraded to GPON. U-Verse is a POS and belongs in a scrapyard. Literally. There must be thousands of tons of copper out there that would come down with U-Verse.

Copper plants need to die. Some copper would probably stick around on the very last mile for some time to come, as a transition from VDSL to GPON happens, and may stay for a long time in a few isolated places here and there. But the middle of the copper plant could still be cut, with the copper only existing downstream of a VRAD or MDU ONT type of device, or a combo VDSL2/ADSL2+ IP-DSLAM in locations that have specific needs to keep some copper on the last mile (like, say an island that had submarine copper laid in the 1950's).

If the leadership at the telcos had an attention span longer than a screaming 2-year-old, and could actually think like adults looking at an ROI over 30-50 years, then they would already have gone 100% GPON over their entire service territories.

I don't think competitors should get access to the lines, although they may need to be regulated as monopolies if they are, in fact monopolies.

Some of the money should also come from allowing the telcos to dump copper when they build fiber out, on a 1:1 basis. Copper is crazy expensive to maintain, so that alone would provide much of the financial case for universal GPON.

Above, I was talking about areas that don't currently have cable, but as we've seen with FIOS areas, HFC can still compete head-on with GPON fiber, so they would stay as competitors, and competing with GPON would light a fire under their asses to upgrade their systems with modern technologies like MPEG-4, 1ghz plants, etc, etc.

AT&T and Verizon can afford universal buildouts in their service areas, and the government should force them to upgrade to 100% GPON, or else they should eminent domain their wireline networks on a town by town basis and give them to whoever wants to build out with GPON. In rural areas that would be super expensive to put GPON in, then the government should auction them off to whomever can do the build-out with the least government subsidy.

In much the same measure, the government should force cable companies to do 100% of any town that they serve, and not allow this half-ass xyz customers per cable mile BS, and should eminent domain the cable plants anywhere that don't comply. The part that the government would need to help directly with is for smaller telcos that don't have billions of dollars to spend on fiber, as well as some of the rural cooperatives that don't have much money at all, and need government help to achieve universal GPON.

In order to promote competition, they should outlaw anti-competitive bundling fees, and make it far easier for municipalities to build their own networks, as well as make it easier for cable overbuilders to enter the market, including government incentives, and make it illegal for a building to block the telecom providers from getting in MDUs to wire fiber.

Unfortunately, that's not going to happen, as we have a corrupt government with a bunch of wet noodles. Even NJ, where Verizon basically promised a 100% FIOS buildout, didn't get 100% GPON.

plk
Premium
join:2002-04-20
united state

ban from sale until they divest

If the FCC says competition will solve the Net Neutrality issue, then the wireless carries should be forced to Divest their landline holding before they are allowed to bid on any more spectrum where they own both.
They (The FCC) can't argue competition while they allow more spectrum to local monopolies and mergers.
Someone should sue to stop the sale until Net Neutrality issue is addressed and the future of the net is decided.
If Net Neutrality goes bye bye then so should mergers and bandwidth in monopoly areas.
rfrooney

join:2006-02-26
Antioch, TN

Use it or lose it.

The solution is simple. If you bid on spectrum lease then you have a certain amount of time to put it in service. If time runs out you lose it. Your money is wasted and its open for bid adain.