FCC Spectrum Screen Should Consider Frequency Characteristics, PK Says
Carnegie professor notes demand is related to infrastructure cost
November 29, 2012
spectrum is creatively equal, Prof. Jon M. Peha of Carnegie Mellon University
notes in comments on the Federal Communications Commission’s proposal to
overhaul its spectrum screen.
“Radio transmissions at different frequencies have different physical
properties, and no man-made law or regulation can change this,” Peha said.
Peha urged the commission to factor frequency characteristics into its spectrum
license approval process, which now consists of a two-part spectrum screen. The
first is an analysis of post-transaction market concentration using the Herfindahl-Hirschman
Index—the sum of squares of all providers’ subscriber market shares. The second
is an examination of the amount of spectrum available for wireless services in
the affected market. The commission has reviewed wireless spectrum transactions
on a case-by-base basis using the screen since 2003.
The procedure has since come under fire. Verizon Wireless criticized the
commission for excluding spectrum bands suitable for wireless, but not yet
deployed. AT&T said the screen was
applied unpredictably. Sprint Nextel argues that it values all spectrum
equally, “regardless of whether it lies within more valuable ‘beachfront’ bands
or in higher-frequency bands of limited commercial use.”
Peha argues likewise.
“It has become common place in discussions of spectrum-related issues to
confuse the amount of spectrum a carrier has with the amount of data that
carrier’s network can carry or the number of people that a carrier can serve,”
he said. “More capacity and more spectrum are not the same thing.”
He goes on to observe that “the alleged equivalence of bandwidth and capacity
makes even less sense for cellular systems… One cellular system with 20 MHz of
spectrum can easily have a much greater data-carrying capacity than another
competitor that also has 20 MHz, or even one that has 40 MHz. It is literally
the defining principle of a cellular system that the system is made up of
cells, and capacity can be increased with no additional bandwidth simply by
deploying more cells. The issue is cost; adding a cell may mean spending a half
million dollars on a new cell tower.”
Wireless carriers therefore want more spectrum, “not because bandwidth equals
capacity, but because a carrier can generally meet its customers’ needs at
lower infrastructure cost if the carrier gets more bandwidth,” Peha said. “It
is this relationship to cost that should be the basis of a spectrum screen.”
Peha, is a professor at Carnegie Mellon’s Departments of Electrical &
Computer Engineering and of Engineering & Public Policy. He is a former chief
technologist of the FCC. His comments were filed on behalf of Public Knowledge,
a public-interest lobby in Washington, D.C. Public Knowledge has argued that
the “assumptions underlying the method used to calculate the spectrum screen
have proven unreliable,” according to the FCC’s Notice of Proposed Rulemaking.
“It is difficult to conduct spectrum policy at the FCC without first knowing
how useful different bands of spectrum actually are,” John Bergmayer, senior staff
attorney at Public Knowledge, said. “It is easier to use certain frequencies of
spectrum to provide service than others.
“In general, a carrier can compensate for less-valuable spectrum by building
more infrastructure. Thus, Public Knowledge argues for an approach that looks
at the relationship between the physical properties of spectrum and
infrastructure costs in rural, suburban, and urban markets, which each have
their own characteristics.”
The spectrum screen NPRM Docket No. is 12-269. Comments are due Dec. 24, 2012.
Replies are due Jan. 23, 2012.
~ Deborah D. McAdams