Is there enough spectrum in the FCC’s auction pipeline for wireless services? CTIA’s recent study by the Brattle Group concludes the country faces “a major spectrum deficit” unless Congress restores the FCC’s auction authority, Inside Towers reported.
Now, New Street Research (NSR) Policy Advisor Blair Levin analyzes what could happen and how it may impact telecom investors. He cites another CTIA study from Boston Consulting Group that warns spectrum shortages may lead to congestion issues for existing mobile services and discourage investors from 5G.
“The CTIA arguments articulates multiple challenges,” according to Levin. Those include “reducing the capacity deficit through the reallocation of spectrum generally, [and] reallocation specifically for exclusive v. shared or unlicensed.” He says they also include “the reallocation of specific bands, with the targets being bands currently used by government entities” including the DoD, and the need for international action to assist U.S. companies.
He cites the 2.5 GHz spectrum that T-Mobile bought as an example of an underutilized band that may help industry’s needs. FCC Chairwoman Jessica Rosenworcel has said the agency can’t issue the licenses until Congress restores the Commission’s auction authority, Inside Towers reported. NSR believes that will happen in the second half of this year.
Another possibility is the 800 MHz spectrum that DISH has an option to buy from T-Mobile. That option expires on July 1 of this year. Also, the FCC plans to vote later this month on the upper and lower 12 GHz band uses, Inside Towers noted.
Levin believes the largest fight will be the battle over spectrum now used by the DoD. The key spectrum is the 3.1-3.45 GHz block, which the DoD is currently studying—with a report due in September, notes Levin. The DoD has been playing “hardball, leading the behind the scenes effort in Congress that resulted in the lapse in auction authority, while also suggesting that allowing mobile broadband on that band would likely cost $120 billion in radar relocation expenses, more in terms of retraining, and R&D, and would take many years to implement,” according to Levin.
With two exceptions, nothing is likely to happen in the near and medium-term to modify the current spectrum position between the top three carriers, NSR believes. The first involves T-Mobile, which will likely obtain the 2.5 GHz licenses it bought at auction, “improving its competitive position relative to T and VZ in markets where it deploys it,” says Levin.
The second exception involves DISH, which may have a big impact on the competitive position of the top three wireless players. “Policy decisions that help DISH increase the odds of a negative impact on the Big Three, though financial matters, at this point, are more critical,” writes Levin.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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