Verizon Tells FCC They're Running Out of Spectrum
Defends Cable Industry Deal From Critics
Last week we noted that for some time, Verizon has stated they have plenty of spectrum for LTE
, executives going so far recently as to state their holdings are so robust, they're in absolutely no hurry to refarm spectrum from their EVDO network. With consumer groups and competitors protesting the anti-competitive ramifications of their new spectrum and marketing deal with the cable industry
, Verizon is back again to claiming spectrum poverty in order to sell the deal to the FCC.
In a filing with the FCC
(pdf), Verizon defends the deal from critics and notes it simply has to happen or a spectrum apocalypse will occur sometime after 2015. They've of course conveniently redacted any and all data that would help one conclude how exactly they came to that conclusion despite already sitting on more spectrum than any other company:
...network infrastructure investments will not be adequate to keep pace with the projected mobile data demand in years 2013 to 2015 and beyond. Indeed, even in markets where Verizon Wireless holds 20 MHz of AWS spectrum already – spectrum it plans to deploy in the LTE network [REDACTED]– it will need more spectrum to meet demand. Given the projected [REDACTED] in data traffic year over year, even the most optimistic assumptions involving the deployment of widespread small cells and other techniques would not provide sufficient capacity by the end of that two-year period.
Verizon currently has a spectrum depth of 29MHz on the 700MHz band, significantly more than their closest competitor (AT&T, 16MHz of spectrum depth). Studies
show both AT&T and Verizon have plenty of spectrum for LTE, particularly after re-farming spectrum currently being used for 2G and 3G (EVDO) services. Verizon Wireless CEO Dan Mead stated just weeks ago that everything was fine, and that refarming EVDO spectrum was "not something that's of great concern right now." While the spectrum deal would certainly give Verizon some added leg room, Verizon has quickly reverted to trying to claim spectrum poverty to push the deal through.
The deal's primary benefit comes in the marketing arrangement with the cable industry, which allows Verizon to bundle LTE service with cable services across the entire United States. It's a deal consumer groups and competitors worry comes with a "gentlemen's agreement" to limit landline competition between Verizon and the cable industry. As for the capacity crisis
, it's trotted out each time AT&T or Verizon want to justify anti-competitive behavior, with the mainstream press never willing to acknowledge that maybe -- just maybe -- the two giants are eager to squat on as much spectrum as possible to keep wireless competitors out of the market. Update
: Verizon apparently has enough spectrum to feel confident in launching a new fixed residential LTE service this morning
in addition to partnering with the cable industry on the quadruple play.
Re: Is there an engineer who understands this stuff? I'm not an engineer, but I understand this stuff. Here's basically what it boils down to:
1) Verizon currently owns more low-band spectrum than any other national carrier. This puts them in a very favorable position, and at the moment there is no feasible way for them to run out of spectrum, and the competitive advantage of their 700/800 MHz holdings providing far superior range than competitors' AWS/PCS holdings making them virtually untouchable. Then only other carrier to hold as much low-band spectrum is AT&T.
2) Any carrier can supplement their capacity by detuning existing cell sites and putting up new cells (more sites, same coverage area). For example, let's say AT&T (or Verizon, or whoever) serves Manhattan, NYC as well as Kenosha, Wisconsin. Let's assume both areas are using CLR 800MHz spectrum. How can you serve an area with millions of people and one with just tens of thousands with the same amount of spectrum? Smaller cells. AT&T could do this as well, but they would rather cry about spectrum, too.
3) Adding more cells costs money, much more than buying new spectrum and squatting on it until you need it. Verizon is in the tricky position of balancing the fact that they are basically untouchable in the spectrum department, yet still don't want to have to spend more money than they have to. They have always run their cell spacing far, far wider than any other carrier due to the inherent qualities of CDMA making it possible to do so, and don't want to start running a more dense network now.
4) AT&T already has a pretty dense network, and doesn't want to have to spend more money making it any denser, so they too want more spectrum. That's what the T-Mobile buy was about. So basically, it's a tradeoff of opportunity cost. Any carrier can serve their customers well by running a super-dense network in congested areas. It's always cheaper to add channels than whole new sites, detuning old ones and turning up new ones. It's not free.
The questions which no one except telco financial insiders can answer is whether they will really go bankrupt if they have to build dense networks, or if they are just greedy telco suits who want bigger bonuses and golden parachutes. Knowing standard telco operating procedure, I think we all know the answer to that question.
Re: Game? No no...You choice should be in the form of a statement. Your *answer* has to be in the form of a question.