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Citigroup Questions Whether US Spectrum Shortage Exists

Posted by Soulskill on from the blame-the-spectrum-speculators dept.

alphadogg writes "For more than two years, the U.S. mobile industry has warned of an upcoming spectrum shortage, but two analysts at Citigroup don't buy it. AT&T, trade group CTIA and even officials with the U.S. Federal Communications Commission have talked frequently about a coming spectrum crunch, as mobile customers move to data-sucking smartphones and tablets. Smartphones use 24 times the spectrum compared to standard mobile phones, and tablets use 120 times the spectrum, FCC Chairman Julius Genachowski said in a speech on Tuesday. But Citigroup analysts Jason Bazinet and Michael Rollins questioned what has become the conventional wisdom in the mobile industry. The U.S. has plenty of spectrum for mobile broadband, but much of it is in the wrong hands, they said."

14 of 131 comments (clear)

  1. Re:120x, 24x? by Culture20 · · Score: 4, Informative

    In bribes.

  2. Spectrum sale by Market by MatthiasF · · Score: 4, Insightful

    They should have sold the frequencies by market area (city, zip-codes, etc.) and not nation-wide.

    That's the real crux of the problem.

    Now we have large nation-wide companies holding up frequencies in large swathes of the country because they're dedicating their efforts in specific markets where they can charge more.

    Had the FCC sold the frequency on a market basis and required it to be used within a reasonable time frame, we wouldn't have these issues.

    1. Re:Spectrum sale by Market by ScrewMaster · · Score: 4, Interesting

      They should have sold the frequencies by market area (city, zip-codes, etc.) and not nation-wide.

      That's the real crux of the problem.

      Now we have large nation-wide companies holding up frequencies in large swathes of the country because they're dedicating their efforts in specific markets where they can charge more.

      Had the FCC sold the frequency on a market basis and required it to be used within a reasonable time frame, we wouldn't have these issues.

      It's similar to the way telephone numbers were allocated: in huge blocks, with no particular guarantee that any significant percentage of them would ever be assigned. That led to the explosion in area codes we've experienced in the past couple decades. The phone companies first claimed that "it's all the fax machines and modems that are in use now" but the reality was just an inefficient allocation scheme.

      Large chunks of IPV4 address space were assigned early on to corporations, universities, government bodies and others who had absolutely no use for so much space, simply because nobody even considered that 32-bits just wouldn't be enough. Not nearly enough.

      The FCC isn't showing much better judgment when it comes to wireless spectrum, or the Internet in general for that matter. Well, okay ... they know exactly what they're doing: generating yet-another artificial scarcity so that their corporate sponsors can continue to make large sums of money from us.

      --
      The higher the technology, the sharper that two-edged sword.
    2. Re:Spectrum sale by Market by Culture20 · · Score: 3, Insightful

      Large chunks of IPV4 address space were assigned early on to corporations, universities, government bodies and others who had absolutely no use for so much space, simply because nobody even considered that

      anyone other than reasearchers or the military would have a use for "an Internet".

    3. Re:Spectrum sale by Market by Miamicanes · · Score: 5, Insightful

      > They should have sold the frequencies by market area (city, zip-codes, etc.) and not nation-wide.

      Great. So then we could have a situation like we did prior to the arrival of Sprint around 1999, when every city had different cellular carriers, and sometimes you couldn't go 50 miles away from home without paying extra to roam. In case anybody has forgotten, roaming charges in the US were still common AND punishingly expensive less than 10 (hell, 5 or 6!) years ago unless you were a Sprint customer. Sprint's network might have sucked in most places, but if you lived in a real city and 99% of your travel was to other real cities and the major highways between them, it was rare to end up someplace that literally had no service unless it was totally out in BFE. You might have had to go outside, or even climb up on a roof to get a usable signal, but at least you weren't getting charged $5 plus a dollar per minute the way people with Verizon or AT&T did. There's a reason Sprint achieved early popularity in Florida and Texas -- both states were horribly fractured between hostile, rent-seeking regional carriers, and Sprint was literally the only way to travel around the state without getting raped by roaming charges.

    4. Re:Spectrum sale by Market by mcelrath · · Score: 3, Insightful

      Why are we allocating in blocks and then assigning devices which are allowed to use fixed frequencies? Why don't we have software-defined radios, antennae, and something like cognitive radio to define on-demand spectrum usage.

      For example, when you turn your phone on it pings a tower using a low-bandwidth common channel to get a frequency allocation (like DHCP) and power assignment. Using a software antenna, it configures some internal hardware to transmit on that frequency/frequencies. Let the whole spectrum be used, by anyone, rather than block allocating in a way that is guaranteed to waste resources. This way, multiple carriers can share frequencies, even if they use different communication protocols (CDMA/TDMA/GSM). In practice, I'm sure a single carrier would effectively "grab" a frequency block in an area by setting up a tower. But the key is that if you travel to the next city, that same carrier could be using a different frequency, and your phone could detect it and use it.

      --
      1^2=1; (-1)^2=1; 1^2=(-1)^2; 1=-1; 1=0.
    5. Re:Spectrum sale by Market by Rich0 · · Score: 3, Interesting

      Actually, I'd do things differently:

      1. Forbid anybody selling cell phones or cell phone service from owning any spectrum anywhere.
      2. Forbid anybody from owning cell phone spectrum in more than one state.
      3. Forbid anybody from owning cell phone spectrum in areas totaling more than 10000 mi^2.
      4. Forbid anybody from owning more than 33% of the spectrum supporting any particular protocol in any particular location.
      5. Assign a particular protocol to any particular frequency at the time of assignment and make this assignment national in scope.
      6. Anybody owning spectrum has to publish their price-per-packet (or channel*time for analog) and charge the same price to all their customers and provide service to anybody (common carrier).
      7. Anybody providing spectrum has to give access at a government-designed colo facility - there will be a moderate number of these.

      In this model cell phone services can't vertically integrate - they HAVE to buy it from local utilities. Any area will have at least 3 local utilities running, which means pricing competition. Cell phone companies don't need to solve the last mile problem, and anybody with some capital can start a new cell phone company at any time and gets the same pricing as AT&T for spectrum use.

      And yet, since protocols are assigned to frequency bands nationwide (NOT TO COMPANIES) you get full interoperability of the network nation wide.

      Areas that are in the middle of nowhere that have no service today might have their local governments kick in some funding or incentives to get the network built out - or the municipality could buy up to 33% of the spectrum to run its own access, so this also helps areas that would otherwise lack coverage.

      Local rent-seeking behavior goes away since nobody can corner any market entirely, and there is no way they can charge discriminatory pricing. The local utilities just accept packets at a colo and send them out over the air or whatever model works best for the techology.

      And, spectrum could be re-designated for new protocols over time as technology marches on.

  3. Wrong hands or wrong spectrum? by schnell · · Score: 3, Informative

    According to the report, the "wrong hands" with control of spectrum that isn't being used or is underutilized are:

    • Clearwire (133 MHz)
    • Lightsquared (59 MHz)
    • Dish Network (47 MHz)

    Almost all of the above spectrum is in the less-desirable 2 GHz+ ranges. Clearwire may be underutilizing, but Lightsquared and Dish haven't gotten to launch their services yet so you can't really say it's underutilized when it's still in process of being developed.

    All in all, this report actually seems to make the case of the big carriers that there is still a shortage of "good" (especially less than 1 GHz) spectrum for broadband. Much of that is locked up by the broadcasters for stuff that is comparatively useless (anyone watching UHF television still these days?) versus having it available for mobile broadband.

    --
    "95% of all Slashdot .sig quotes are incorrect or completely fabricated." -Benjamin Franklin
    1. Re:Wrong hands or wrong spectrum? by Anonymous Coward · · Score: 3, Informative

      OK, wow. Where to start.

      First off, I guess, all of those listed bands are NOT in the "less desirable" 2GHz range, they are down in VHF. 133MHz is just outright wrong, I don't know where you got that from, but that's at the top of the aircraft band. For obvious reasons that is a very well protected and regulated part of the spectrum. If someone bought it up I doubt they will ever do anything with it, because the rules are very hard to comply with and there's no way in hell that consumer equipment would be allowed to transmit there.

      Ignoring the rest, you ask if anyone is still watching UHF TV nowadays. Yes, everybody is. What they got rid of is the VHF TV stations. Absolutely every broadcast station is in the UHF range.

      Along the funny side, a dish made for 47MHz would be about 10ft wide, minimum.

    2. Re:Wrong hands or wrong spectrum? by garcia · · Score: 3, Informative

      Clearwire is probably underutilized because people don't want the towers which provide the service in their backyards.

      We've had a discussion about this in the past which I posted on (I'm too lazy to find it) where I said people in my area shot down a proposed tower because it would go up on a watertower in the park in their backyard.

      With so much citizen hatred for "screwing up their home values" perhaps that's the biggest problem facing this "underutilized" spectrum rather than the companies themselves.

    3. Re:Wrong hands or wrong spectrum? by Nethead · · Score: 4, Interesting

      Hi Bill:

      A good amount of that Clearwire spectrum is used for tower-to-tower communications. One unique thing about Clearwire's system is they really don't like to pay for dedicated lines to towers. The normal setup is a few AggPOPs per market which feed, normally 10Gb fiber, to the market's TransPOP which often is colocated with the RDC (Regional Data Center). Each AggPOP will service one to several RF tower rings of three to eight towers, mostly via Dragonwave radios. Of course with tens of thousands of RF sites, there will be some one-offs, but the goal is to have as many tower sites serviced via the AggPOPs as feasible. The system from RF tower to TransPOP is PPB-TE Ethernet.

      This allows them, as they are doing now, to lease some of that bandwidth to the towers to other carriers. Clearwire was always envisioned as a wholesaler.

      --
      -- I have a private email server in my basement.
    4. Re:Wrong hands or wrong spectrum? by epine · · Score: 3

      CTIA officials disputed the Citigroup report's numbers, saying Bazinet and Rollins appear to be using information from 2010.

      Whoa, it's still 2011, and I was so 2012 already.

      Our crisis outruns competent criticism, so give us more money / leeway, no strings attached.

      If the report used data from August, I'd trust it far less. I guess the Goldilocks report has a 30 day shelf life: not too fresh, not too stale. Just what you love to see when you work hard to prepare such a document in a thorough and even-handed way: pitched into the rubbish bin before the ink has barely dried.

  4. A Patchwork Of Spectrum Is Not Usable Spectrum by rsmith-mac · · Score: 5, Insightful

    Citi's report is not wrong, but how they go about counting things is naive at best. The crux of the matter is that there's a lot of crap spectrum that carriers basically got for free or close to it. But before we get too far ahead, let's answer an easier question: what is good spectrum.

    1. 1) The ideal spectrum is below 1GHz, as these frequencies have the best building and tree penetration. 1GHz-2GHz is usable, but it's not ideal because you start taking notable losses indoors and customers who've given up on landlines can't reliably use their phones indoors everywhere. Anything over 2GHz is effectively useless for mobile wireless because it's so poor at penetrating obstacles. It's best used for fixed point wireless where obstacles can be planned around and/or removed.
    2. 2) The ideal spectrum is nationwide. A patchwork of spectrum is not usable spectrum because it means you can only use narrow (lower bandwidth) channels, and requires a great deal more effort to plan, operate, and maintain a wireless network.
    3. 2b) Local spectrum is only useful when it abuts nationwide spectrum so that carriers can use it by simply activating more channels in high population areas.

    Case in point, 194MHz of the spectrum Citi says is available is above 2GHz: "Citigroup's description of 194 MHz available in the Broadband Radio Service (BRS) and Educational Broadband Service (EBS) bands between 2.4 and 2.7 GHz". This also goes hand-in-hand with Citi's weird method of counting spectrum in use: they're multiplying it by the percent of the population that the spectrum covers. "The two used averages to come up with spectrum use estimates; if a carrier has a 10 MHz nationwide block, but is only delivering service to half the U.S. population, the report considers that 5 MHz of used spectrum, Rollins said."

    Ultimately the carriers are being wasteful at times, but not nearly to the degree that Citi says they are. The carriers need more national allocations if they're to run a 3rd network simultaneously, and those allocations need to be at least 40MHz wide so that they can operate two sets of wideband (10MHz) LTE channels. Smaller allocations mean that they're going to have to use smaller channels, and that's going to greatly limit network performance.

    1. Re:A Patchwork Of Spectrum Is Not Usable Spectrum by Solandri · · Score: 4, Interesting

      Ultimately the carriers are being wasteful at times, but not nearly to the degree that Citi says they are.

      The government shouldn't have sold spectrum, it should have leased it, with lease renewal fees gradually increasing over time like we do with property taxes. One of the purposes of commercial property taxes is to encourage efficient use of land. If you own land in a major city's downtown area, the temptation is to sit on that land as it appreciates in value. After all, it costs you no more to hold onto that land than it does to hold onto land in the middle of the desert. That's good for you, but bad for society overall. By charging you high property tax on that valuable piece of land, it gives you two choices: Develop the land into something useful for society which generates enough revenue for you to offset the high property tax, or sell the land to someone who will develop it.

      That's what the government should have done with spectrum. Recurring and increasing annual lease fees would've forced spectrum owners to use it, or sell it off to someone who would use it. By selling the spectrum instead of leasing it, we've got a bunch of companies now suspected of wastefully sitting on spectrum simply because they can.