Verizon Wireless said it might conduct an open sale of the wireless spectrum it purchased late last year, which could be worth billions of dollars. That statement, included in a proposal it sent to the FCC, caused an angry outcry from the broadcast industry and consumer advocate groups that think the Telco industry clearly has all of the wireless spectrum it needs. Broadcasters are locked in a bitter dispute with the Telco and computer industries over the availability of wireless spectrum and the government’s plan to reclaim frequencies now used by terrestrial TV stations and auction it off to the highest bidder.
Verizon’s proposal is contingent on the company getting government approval for three deals to buy spectrum from cable companies and Leap Wireless for a total of about $4 billion. Those deals were made in November and December.
However, public-interest groups that say the cellphone company—already the nation’s largest—doesn’t need more spectrum have resisted those deals.
“Until today’s announcement, Verizon denied that it was hoarding spectrum,” said S. Derek Turner, research director of Free Press, a public interest group. “This sale demonstrates that Verizon has in fact warehoused spectrum and the company will likely profit handsomely from this spectrum speculation strategy. The undeniable truth is a disproportionate amount of the country’s most valuable spectrum is concentrated in the hands of Verizon and AT&T, who enjoy market shares that dwarf other sectors of the American economy,”
“Verizon does not need cable’s spectrum,” Turner added. “Verizon already controls large swaths of unused beachfront airwaves that it could use to meet future demand. Allowing Verizon to foreclose future wireless competition by gobbling up the valuable airwaves currently held by its cable competitors is clearly not in the public interest.“
Verizon bought the rights to use the frequencies from the federal government for $4.4 billion in 2008. The airwaves were formerly used by UHF band TV stations and covers major market areas like New York City, Washington, Philadelphia, Chicago, Dallas, Houston, Los Angeles and Miami.
The wireless carrier plans to keep a larger, nationwide swatch of spectrum it bought in the same auction. It has said it is using that for its “4G LTE” network, which went live a year and a half ago.
Robin Nicol, a Verizon spokesperson, denied the auction is designed to get the FCC and the Justice Department to approve its spectrum deals with cable companies and Leap. If those transactions go through, Verizon doesn’t need the licenses it plans to auction, she said.
“We wanted to put these licenses in the hands of other carriers who could use them, for the benefit of their customers,” she said.
Dennis Wharton, Executive vice president of Media Relations at the NAB, said Verizon’s proposal to sell reallocated broadcast TV spectrum confirms the fact that it has "warehoused" this “beachfront property” and raises the question of whether a spectrum shortage actually exists.
“Rather than simply take at face value the specious claims of wireless broadband providers, policymakers should heed the words of Martin Cooper, the inventor of the cellphone, who disputes the notion of a spectrum crisis,” Wharton said.
Cooper, a former vice president of Motorola and chairman of Dyna L.L.C., a so-called "incubator" for new companies, told the “New York Times” last week that he feels claims of a spectrum crisis are largely exaggerated. He implied that compression gets better with time, making spectrum use more efficient.
“Somehow in the last 100 years, every time there is a problem of getting more spectrum, there is a technology that comes along that solves that problem,” he said.
Cooper said buying spectrum is the easiest way for carriers to expand their network, but newer technologies, like improved antennas and techniques for offloading mobile traffic to Wi-Fi networks, can multiply the number of mobile devices that carriers can serve by at least tenfold.
Cooper also sits on the technical advisory committee of the FCC and he previously founded ArrayComm, a company that develops MAS baseband technology to maximize spectral efficiency. Cooper said he is no longer associated with that company.
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