FLO Spectrum Sale Hints at UHF Spectrum Value
December 22, 2010
One of the precepts of the FCC's plan to reallocate up to half the usable broadcast TV spectrum for broadband is that the market value of the spectrum would be much greater if it's used for broadband rather than for broadcasting.
If the price AT&T is paying for Qualcomm's prime FLO spectrum is any indication, the FCC may have a hard time convincing broadcasters to voluntarily give up their spectrum.
AT&T is set to pay $1.925 billion for spectrum currently used for Qualcomm's FLO TV operation. While that may sound like a large amount, consider that, according to the TWICE article on the shutdown, FLO was operational in 107 markets. Dividing 107 into $1.925 billion gives an average price per market of only $18 million. The price per channel would be less, as Qualcomm also owns Block E spectrum in some markets.
How many TV stations would be willing to give up their TV channel for $18 million? In reality, they would receive much less, as the government would want its cut for deficit reduction.
One possible reason for the lower price is this is "unpaired" spectrum--there isn't a separate block of frequencies to be used for two-way communications.
This doesn't appear to be a problem for AT&T, however. An AT&T and Qualcomm press release announcing the deal said that "AT&T intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology. This technology is designed to deliver substantial capacity gains and is expected to be enabled with the completion of 3GPP Release 10."
It's hard to imagine UHF broadcast spectrum bringing a much greater price. After all, the FLO spectrum is close to frequencies that Verizon is using to build out its LTE network, so equipment will be available. The spectrum doesn't have to be cleared, and there are no adjacent broadcast channels to cause interference.
An article in TWICE on the sale, Qualcomm To Sell FLO TV Spectrum to AT&T states. "Qualcomm also plans to develop LTE multicast technologies specifically to deliver high-bandwidth video and other multimedia content."
LTE multicast sounds a lot like broadcasting to me.
Perhaps broadcasters should stop using the phrase "Mobile DTV," and instead call it "broadband multicasting" or "wireless multicasting" to make it sound more 21st century.