Response to spectrum auction off the charts

As the FCC developed rules for the massive auction of unused, low-frequency broadcast spectrum, T-Mobile and Sprint repeatedly urged the FCC to impose restrictions on AT&T and Verizon. Low-frequency spectrum, they claimed, was more valuable than higher frequency spectrum, and they needed special rules to compete.

Well, it turns out Sprint and T-Mobile may have been crying wolf. In today's density-rich wireless architecture, low-frequency spectrum’s greater capacity to travel long distances and penetrate buildings may not be as valuable.

In a recent column in GigaOm, Peter Rysavy points out that the response to the most recent auction of AWS (advanced wireless services) spectrum – which is not in the lower frequencies – changed the way the industry values spectrum.

In Latest FCC auction shatters spectrum myths, Rysavy says that, “First, the record sums that are being paid for relatively high-band spectrum at 1.7 and 2.1 GHz obliterate the notion that low-band spectrum below 1 GHz is the holy grail.” Low-frequency does “penetrate better and propagate further,” which is good for rural carriers, but most activity takes place in metro areas where high-frequency permit denser antenna clusters.

Prior to the auction, many critics said that carriers didn’t need increased spectrum. Instead, they “could extract much greater capacity from existing spectrum, as high as 100 times greater than the current system.”  That was, said Rysavy, “a nonsensical pipe dream.”

Instead, the $45 billion bid for unused frequencies shows that “operators are driven by economics to bid for spectrum up to the amount that matches an equivalent capacity gain by investing the same amount in infrastructure or technology.”

Wireless capacity has, said Rysany, been doubling every three years, and shows no sign of abating. That means that increased spectrum – along with other technological advances – are not just good business and good consumer economics. They’re essential to the wireless revolution.

Latest FCC auction shatters spectrum myths (GigaOm, Jan. 17, 2015)