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Spectrum crisis? What spectrum crisis?

GSMAThe Times' editorial board expressed skepticism this week about the AT&T's proposed purchase of T-Mobile, noting that it "would eliminate one of the four largest U.S. mobile phone networks and leave just two companies — AT&T and Verizon Wireless — in control of more than 70% of the market." But we didn't tell regulators to put the kibosh on the deal, noting that it might lead to a better-performing network than AT&T and T-Mobile could produce on its own (at least in the foreseeable future).

One of the main argument in favor of the purchase is that the demand for mobile bandwidth is skyrocketing, rising faster than carriers can accommodate with the spectrum at their disposal. Federal Communications Commission Chairman Julius Genachowski has warned repeatedly about a looming "spectrum crisis," but even under the best-case scenario, new airwaves won't be available for wireless broadband for many years. For AT&T, buying T-Mobile and its frequencies is a shortcut to more spectrum.

Not everyone buys the idea of a debilitating spectrum crunch, however. Analyst Dave Burstein has argued that AT&T already has ample airwaves, particularly in the bands it's just starting to use for 4G services. In his DSL Prime newsletter Friday, Burstein offered another data point to undermine AT&T's case. A new projection by networking equipment kingpin Cisco predicts that demand for mobile bandwidth will increase at a slower and slower rate in the coming years, as the penetration of smartphones slows.

That makes sense, right? Much of the growth in the demand for bandwidth has come from two parallel forces: a new type of smartphone (epitomized by the iPhone) encourages people to make more use of the mobile Web, and more people are switching from conventional mobile phones to these new smartphones. Once everyone has an iPhone, an Android phone or the equivalent, much of the growth goes away.

Cisco estimates that annual rate of growth in the demand for mobile bandwidth demand will increase from 120% in 2010 to 140% this year, then decrease to 46% in 2015. Extrapolating from Cisco's numbers, Burstein projects that mobile bandwidth demand will grow only 30% to 40% in 2016 and 2017.

That's still double-digit growth, which is nothing to sneeze at, but Burstein thinks it's manageable. Wired broadband networks "have become less congested despite eight years of 30% to 50% growth," he wrote, because improvements in chip technology (driven by Moore's Law) have expanded the networks' capacity at a similar pace.

Moore's Law applies to wireless networking gear too, but not to the cost of building towers and leasing spectrum. The latter are the big unknown in this equation. As Burstein put it, "How much capital [those] costs will demand is a hard question."

-- Jon Healey

Photo: Attendees at a mobile phone trade show in Barcelona experience a capacity crunch at an Android smartphone display. Credit: Reuters / Gustau Nacarino

 

Comments () | Archives (3)

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Jason

Im on ATT and I'm really happy about the merger, i hope the FCC approves it, the merger can only improve my service.

robble

well good for you jason. why they wont use that 39b and actually make your service just WORK? like the other ones do? it's not going to make your att service better one bit. it simply takes out competition plain and simple.

your service will still suck because att is a horrible wireless company plain and simple. facts are facts.

Downtown Amy Brown

Broadcasters CAN Give The People What They Want And Need!

SpectrumEvolution.org (SEO) has launched a new website -- WWW.FREE-INTERNET.US -- designed to assist both the Government and the public in understanding how broadcast spectrum can immediately be put to use to provide essential wireless broadband Internet services in both urban and rural markets across the Unites States, in a free and open, rather than a government-planned, marketplace.

The Federal Communications Commission (FCC) has proposed to take up to 20 channels away from broadcast spectrum and auction them to wireless companies to provide broadband services. That approach will diminish the diversity of media voices and concentrate more spectrum in the hands of the two wealthiest companies that will control over 80% of the wireless market, if AT&T goes through with its proposal to buy T-Mobile.

The FREE-INTERNET.US initiative provides for both the ongoing operation and/or the creation of a new traditional broadcast television channel, combined with the conversion of some broadcast spectrum to a high efficiency free-to-air broadband Internet service. The benefits include providing a financial base for local programming in smaller markets that have little or no such service and a platform for service to unserved and underserved rural, minority, and niche audiences of all kinds, while still satisfying the need for spectrum to support exploding wireless demand.

These services can be provided at much lower prices than wireless companies now charge, including advertiser-supported FREE wireless Internet services.
There are already more than 2,000 low power television stations licensed in the United States that will be able to provide both local television and wireless Internet services if the FCC will only set them free to do so. In addition, there are applications for many, new low power TV channels pending along most of the nation’s interstate highway corridors and in small communities nationwide. Legal notices have appeared in newspapers announcing these applications.
Providing broadband through these low power stations will bring service to rural communities first, instead of their being at the end of the construction timetable, as has historically been the case with nationwide wireless companies.
The FREE-INTERNET.US website provides a venue for the public to express their desire for this service and includes Congressional and FCC contact information, as well as an opportunity for individuals to participate in an online petition.

SpectrumEvolution.org recently completed a series of successful Congressional meetings to provide further information on their platform for flexible use of the broadcast spectrum. In their meetings with the majority of the members of the Telecom Subcommittee in both the House and Senate, SEO also elevated their desire to support the deployment of advertiser-supported FREE Internet to the public.

SEO president Greg Herman said, “We are very pleased to take this next essential step in helping Americans understand how the public’s airwaves, specifically broadcast television spectrum, can be easily and efficiently evolved to provide the public with advertiser-supported broadband Internet services, for both fixed and mobile devices. We believe that this concept not only respects the covenant which the Government and the American public have had with broadcasters, i.e., that the public receives free-to-air and clear-to-air services in exchange for use of broadcast spectrum. It is only logical for broadcasters to continue this relationship and to serve the public with the prevailing technologies and services that the public wants and needs.”
Mr. Herman went on to say, “One of the most compelling aspects of this initiative is that underserved rural areas across the country could be the first to experience the benefits of this concept, as broadcasters in those markets want very much to find new business opportunities to aide in sustaining their ability to serve their communities and maintain the viability of their businesses now and into the future. The FCC’s vigorous promotion of its own view of what is best for the country and its reluctance to give broadcast entrepreneurs the opportunity to compete in a free and open broadband marketplace are disappointing.”

For more information, log on to www.Free-Internet.US.


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The Opinion L.A. blog is the work of Los Angeles Times Editorial Board membersNicholas Goldberg, Robert Greene, Carla Hall, Jon Healey, Sandra Hernandez, Karin Klein, Michael McGough, Jim Newton and Dan Turner. Columnists Patt Morrison and Doyle McManus also write for the blog, as do Letters editor Paul Thornton, copy chief Paul Whitefield and senior web producer Alexandra Le Tellier.



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