Operators battle for more spectrum as FCC opens new frequencies

Regardless of whether a "spectrum crisis" really exists, there is no question that, for wireless operators, you can never have enough. In the U.S., operators have been spending billions of dollars in recent months to add to their holdings in support of their network build outs. Sprint made a big move in December when they announced their intention to acquire 100 percent ownership of Clearwire and their extensive 2.5 GHz spectrum holdings. The relationship between these two companies has run hot and cold in recent years, as Sprint had given up majority ownership of the provider in June of 2012 only to re-acquire it a few months later after Japan's Softbank contributed $8 billion of new capital by taking a 70 percent stake in Sprint (see "Wireless operators set to blanket U.S. with LTE РAided by foreign investment" in the Winter 2012 issue).

Clearwire's average of 150 MHz of bandwidth across the country would put Sprint in an enviable position compared to Verizon Wireless and AT&T. It also would form the basis for a nationwide deployment of TD- technology, which Clearwire has collaborated on with China Mobile, and increase demand for dual-mode modems to support handover compatibility with Sprint's current FD-LTE deployment. However, in January, DISH Network presented their own acquisition proposal to Clearwire, raising the share price over Sprint's offer. Though DISH contends that the deal is not dependent on Sprint's participation, the ownership arrangement and other agreements between Sprint and Clearwire make the broadcast satellite provider's play to acquire an LTE network highly unlikely to succeed.

In January AT&T also added to their spectrum assets, making a $1.9 billion purchase of 700 MHz spectrum from Verizon and spending $780 million in January to acquire Alltel's network and subscribers in the rural areas of six states. Alltel operated a CDMA network in the 700 MHz, 850 MHz, and 1,900 MHz bands, which we can expect to see AT&T convert to HSPA+ and LTE in the near future. The acquisition is just one piece in AT&T's Project Velocity IP (VIP) strategy, which also includes a plan to deploy more than 40,000 small cells and 10,000 new macro cells across the country. It appears that in 2013 we will finally start to see the heterogeneous network deployments that analysts have long known will be necessary to achieve sufficient coverage and capacity.

FCC signals small cells and Gb Wi-Fi

The Federal Communications Commission (FCC) has also recognized the importance of small cells, and in December issued a proposal to "enable widespread deployment of small cell technologies across the 3.5 GHz Band." This band is currently used for military radar applications, and the limited propagation characteristics of the higher frequency make it unattractive for use in broader-coverage macro cell applications. To prevent potential interference, the FCC's 3.5 GHz proposal is one of the first plans to employ an innovative scheme for spectrum sharing. Access will still be prioritized on a "hyper local" basis for government, hospitals, and public safety usage, while a database technology used in the Television White Space Coalition's plan would be employed to support small cell deployment for the general public. The proposal also includes a provision to make available 150 MHz of spectrum in the 3.65-3.7 GHz band for use by wireless Internet Service Providers (ISPs), who often provide in rural areas where cable or DSL services are not available.

All the jostling for 4G spectrum positions is only part of the battle, however, as operators will continue to look to offload to ease their capacity crunches wherever possible РAT&T has said that all of their small cell deployments will incorporate Wi-Fi. But Wi-Fi can easily get overburdened also, especially in public venues. At the 2013 International Consumer Electronics Show (CES), FCC Chairman Julius Genachowski took this on as well, saying that the Commission would initiate an effort to increase speeds and alleviate Wi-Fi congestion at major hubs such as airports and convention centers. The FCC apparently has the latest IEEE 802.11ac flavor of Wi-Fi in mind, as they say they intend to free up unlicensed spectrum by as much as 35 percent for "Gigabit Wi-Fi." Gigabit Wi-Fi, which operates solely in the 5 GHz band, can take advantage of increased channel bandwidth, from 40 Mhz in IEEE 802.11n to 80-160 MHz in IEEE 802.11ac.