Predicting Upcoming Spectrum Auction Results…

(this post inspired by a series of tweets by Tim Farrar of TMF Associates)

The biggest proclamation we heard at the height of the latest spectrum frenzy is that we need to free up 500MHz of spectrum for mobile communication between now and 2020, with 300MHz of that coming by 2015. President Obama repeated it, the FCC Chairman at the time Julius Genachowski repeated it. But there is a flip side to all this spectrum becoming available.

Name Frequencies Total MHz 5MHz FDD Pair Equiv.
600MHz Incentive 614-698MHz (TV channels 38-51) Max 120MHz, Likely 70MHz 8*
AWS-3 (paired) 1755-1780/2155-2180 (AWS adjacent 1700/2100) 50MHz 5
AWS-2** (unpaired) 1695-1710 (AWS adjacent 1700/2100) 15MHz 1.5
AWS-2 1915-1920/1995-2000 (PCS adjacent) 10MHz 1
Total 145MHz 14.5

* includes the 6 MHz Lower 700MHz “A” block because the block will become usable when TV stations are relocated, this effectively adds more spectrum to the usable inventory than will be auctioned.

** its possible for this spectrum to become paired if the FCC forces broadcasters to give up some spectrum they use currently (predominately backhaul), this would add another 15MHz to the totals. But if I were the broadcasters, I’d be sick of the FCC’s bullshit by now.

Congress has dollar signs in their eyes. They see spectrum auctions as a way to raise dollars for the federal treasury. But their desire to raise funds ultimately conflicts with the FCC’s and the administration’s desire to free up a lot of spectrum because of basic supply and demand – there will be so much spectrum for sale in the next three years, its likely that the spectrum prices will plummet. The price of 69c/MHz-POP will fall, since its not likely the big four will spend over $30 billion on spectrum purchases in the next three years. So what will they spend?

600MHz Incentive

T-Mobile and Sprint desperately need low-frequency spectrum for their networks (for coverage, not capacity), AT&T could use a little more spectrum below 1GHz, especially if it can get it on a nationwide basis. Verizon is good on spectrum (or so they say), and would really only be playing a game of keep-away from the other carriers if it were to aggressively bid during the auctions. Dish network is also a contender here, acquiring one or two 5MHz blocks for rural and in-building coverage. I expect this to be the most contentious auction if there are no hard ownership caps, and moderately contentious if AT&T and Verizon are limited in the amount of spectrum they can purchase.

AWS Band Extensions

The AWS band extensions are valuable because three of the four carriers (plus a host of smaller regional carriers) already have spectrum here. We’re also likely to see another round of musical chairs here after the auction is closed and the big three look to swap spectrum to create larger contiguous spectrum segments. It’s entirely likely that after the upper band extension is auctioned, we could see AT&T, T-Mobile and Verizon all swapping spectrum to squeeze out as many 20MHz FDD LTE channels as they can. Sprint is likely to stay out of the game, as with Dish. Smaller carriers might be able to get smaller bits in mid-tier markets, but not much in the top 25 markets where I expect competition to be fierce. AT&T will likely have the most to spend in this band to catch up given its small amount of AWS holdings (even if the Leap acquisition goes through, it may be 3-4 years before that spectrum is available for 100% LTE).

PCS Band Extension

The 10MHz PCS band extension is likely to be Sprint’s, unless Charlie Ergen wants to play spoiler. Which he might, just for the hell of it. But I think there is less pressure now that it seems like he is going to get LightSquared’s spectrum through bankruptcy – 40MHz of LS spectrum plus the 40MHz he owns would definitely be enough to start his own carrier, along with some 600MHz spectrum he would need to pick up in the incentive auction.


My carrier spectrum ownership totals post-auction estimates. Existing ownership figures are national averages from my current spectrum ownership database. Expected spectrum purchases in the expansion bands shown in parenthesis.

Carrier 600Mhz 700MHz Cellular/SMR PCS AWS WCS* BRS/EBS* Total
Verizon 10 22 25 20 40 (10) 0 0 117
AT&T 10 18
25 40 40 (25) 20 0 160
T-Mobile 20 0 0 25 50 (10) 0 0 95
Sprint 15 0 15 35 (10) 0 0 50 115
Dish** 15 5† 0 0 0 0 0 100

* “Boutique” spectrum (not a large ecosystem of players worldwide who use that same band)
** Not listed: 40MHz AWS-4*, 40MHz L-Band* (Lightsquared)
† Unpaired spectrum, only usable to supplement download speeds

This thought exercise made me realize a few things

  1. I understand why Verizon is fighting against spectrum caps – if things play out this way, they could fall further behind AT&T for spectrum, though they do have the trade off of not being saddled with any boutique spectrum, unlike AT&T and Sprint.
  2. The race to acquire large regional carriers is on – US Cellular, Cincinnati Bell, nTelos, etc. will likely be bought, and the FCC doesn’t seem to care as long as we keep at least four major carriers. AT&T is throwing its cash around to buy up these carriers, Verizon is a little more diligent.
  3. AT&T is amassing a spectrum ownership lead over the other carriers, yet it doesn’t translate to any meaningful improvements in service – coverage or speeds. They’re a little faster than Verizon in terms of LTE, but I attribute that to 1) hardware differences (RRH) and 2) less LTE unlimited subs than Verizon (c.f. the Reddit user who uses 40GB/mo on Verizon).
  4. Sprint has been heavily spectrum constrained. But they’re poised to break out – CDMA Adv. and LTE in the SMR band should allow them to catch up a little bit to the big players. They have the chance to be just as fast (with their tri-band LTE equipment), but I’m still skeptical of their execution. I hope I’m wrong.
  5. T-Mobile should work to get as much AWS spectrum as they can – 20+20 channels would keep them at the top of the speed race. 600MHz will allow them to get the suburban, exurban and rural coverage they desperately need. But can they afford to buy all this spectrum?

So back to the question of how much they will spend. For the most part, the spectrum to be sold is uniform within each band, unlike the 700MHz auction which had different characteristics for each of the different blocks (Verizon’s “C” block had open access requirements, the lower “A” block had interference issues). I’m venturing to say that the prices are as follows…

Band Price ($/MHz POP)
600MHz 0.60
AWS Exp. 0.60
PCS Exp. 0.50
Name Band Spectrum Cost
AT&T 600MHz 10MHz 1.8B
AT&T AWS Exp. 25MHz 4.5B
AT&T Total 35MHz $6.3B
Sprint 600MHz 15MHz 2.7B
Sprint PCS Exp. 10MHz 1.5B
Sprint Total 25MHz $4.2B
T-Mobile 600MHz 20MHz 3.6B
T-Mobile AWS Exp. 10MHz 1.8B
T-Mobile Total 30MHz $5.4B
Verizon 600MHz 10MHz 1.8B
Verizon AWS Exp. 10MHz 1.8B
Verizon Total 20MHz $3.6B
Dish 600MHz 15MHz 2.7B
Dish Total 15MHz $2.7B
ALL OPERATORS Total 130MHz $23.1B

Smaller operators excluded from this table.

So $23B is roughly the amount I expect the spectrum auction to go for. This includes 70MHz of incentive auction spectrum, 50MHz of AWS expansion band, and 10MHz of PCS expansion band. Not included is the 15MHz unpaired AWS expansion band (this could bring in another $4-5B if it were 15MHz paired).

Spectrum Mapper Version 1.5 Released

I’ve updated the spectrum mapper app to version 1.5. It’s now able to use the FCC License View data for the maps, but not the metro spectrum breakdown (thats still running on old FCC Spectrum Dashboard data).

The new features are:

  • New, slightly more accurate data source
  • Direct link into the FCC’s ULS for each license.

The SMR and EBS/BRS spectrum is a bit messy – the spectrum licenses I download don’t correspond to the ULS, so there are mismatches and somewhat clumsy records.

I will continue to do what I can for the metro spectrum breakdown, but that will be a much more involved effort, which may take me the rest of the summer.

Feedback is welcome! Drop a comment below.

Work on version 2 underway

Ever since the FCC stopped updating the spectrum mapper data, I’ve been left in the lurch when it comes to data updates.

I have started work using the FCC’s License View portal that allows me to download all 16M FCC licenses. There are downsides though – I have to sift through all those licenses and extract the ones I want, and the licenses don’t have county level disaggregation information associated with it (e.g. if a license is broken into pieces geographically or a spectrum block is split by frequency ranges).

The latter is a huge problem for the Metro mapper tool because it doesn’t accurately show what licenses are in effect in which metropolitan area. The regular mapping system won’t have a problem since things are broken up by license area. So that means I have a substantial amount of work left. And my free time is way smaller than it used to be, so it might take a while…

End of data updates?

In order to update my Spectrum Map, I use data from the FCC Spectrum Dashboard (its helpful CSV export functions). Unfortunately, we’ve gone two months now where the FCC hasn’t updated it. And I don’t know if they will resume them.

If I want to keep the Spectrum Mapper going, I’ll have to figure out a way to get at the same sort of FCC data I had before. Raw license data is easy (kind of) – they have a way to download the entire license database into a 10GB text file (1GB ZIP file). I have a python script already that will go through and pull out all the cellular license data. But the issue from there is it doesn’t come with population-specific information on geographically disaggregated licenses (when two or more companies split a geographic area into smaller parts) and no county-level data (which is what I was using as the basis in my system). The FCC ULS has county level data, but I don’t feel comfortable screen scraping the FCC’s website, lest they call it “unauthorized access” and threaten to throw me in jail for 30 years like Aaron Schwartz.

So for now I’m stuck. Even if I figured out a solution, I cant do much until May anyways, since my weekends are spent writing papers.

How much 5GHz spectrum is enough?

Note: Post edited 2/15/13 with updated information from the NTIA report.

Recently, the chairman of the FCC proposed adding more spectrum to the 5GHz unlicensed ISM band. Currently it stretches from 5.15GHz to 5.85GHz, but with a 120Mhz gap (5.35-5.47GHz) and a 5MHz gap (5.73-5.735GHz), leaving about 575MHz of usable bandwidth (at various power levels subject to competing uses) in three parts – 5.15-5.35Ghz (200MHz), 5.47-5.73GHz (260MHz), 5.735-5.85GHz (100MHz). The FCC proposal was to fill in the 120MHz gap, as well as add 75MHz to the upper end of the band, extending it from 5.85Ghz to 5.925Ghz. However that upper 75MHz interferes with “smart car” connected vehicle program, and is opposed by AASHTO (the American Association of Highway & Transportation Officials – essentially the governing body for regulations covering roads and highways).

Filling in the first 120MHz is a good idea, and would leave us with more spectrum to add channels. It would allow for a 40% increase in the number of 80MHz channels available to broadcast on, and add a third available 160MHz channel (a 160MHz channel is made up of two 80MHz channels, its not cumulative). Currently, the specification and frequency allotment for the US only allows for five 80MHz channels and two 160MHz channels as shown below. Adding in the band between 5.35-5.47GHz would allow a contiguous span from 5.15-5.73Ghz (580MHz). The 580MHz usable span would allow for seven 80MHz channels. Those seven 80MHz channels could be paired into three 160MHz channels for even faster speed under an optional part of the 802.11ac specification.

From the NTIA report on the 5GHz reallocation
From the NTIA report on the 5GHz reallocation, via Steven Crowley’s post

The addition of the 75MHz to the upper end is more questionable, due to the conflicts AASHTO brought up (linked above). It would allow for an additional 80MHz channel (or one 160Mhz channel) in that band, but because of the drawbacks dealing with connected cars (I’d rather see connected cars drive me to work rather than faster wifi speeds at home) I’m on the fence as to whether or not this 75MHz offers as much benefit as the 120Mhz addition mentioned above.

What effects does the spectrum addition have on end users? Faster speeds, at least once the specifications are updated. Because more channels will be available for people to select, neighbors will have less collisions and more spectrum to share in a given area. WiFi access points with 2 or 4 antennas would be able to offer aggregate throughput speeds measured in gigabits to a number of devices throughout the home. Devices supporting the final 802.11ac spec should start to arrive in 2013, so its just a short wait; however the wait for this additional spectrum is likely to be a lot longer.

A different purpose for Clearwire requires a different set of ownership rules

When Clearwire’s goal was to sell wholesale access and provide fast Internet for everyone, the fact that it owned about 160MHz of 2.5GHz spectrum in major metro areas wasn’t a big deal because it was planning on wholesaling the spectrum to carriers it could come to financial terms with. That spectrum was essentially available to all carriers. But not anymore.

With Sprint (or Dish, maybe) acquiring them completely, the rules for ownership change – that spectrum is no longer available to everyone. Instead, it’s locked to Sprint and its MVNOs. And if you think from that viewpoint, the rules of ownership change. Verizon thinks that, and I think that way too.

I’ve already talked about my idea for rebanding the BRS/EBS range so that carriers can get access to the spectrum, while still giving Sprint a huge leg up (Sprint would still end up with 100MHz TDD spectrum, and 80MHz FDD would be either given to incumbent owners or auctioned off). The FCC might even have a stricter viewpoint than me, giving Sprint less than what I suggest. Other carriers (Verizon, T-Mobile, AT&T) could make good use of that spectrum instead of just letting Sprint sit on it.

Spectrum is a public good and should be treated as such. Giving Sprint nearly all the BRS/EBS band doesn’t serve the public interest if its going to take 10+ years to use it all (various technical reasons prevent them from using all of it now – most notably how much power would be needed to broadcast a signal from a device over a 100MHz range, the effective bandwidth currently is 20-40MHz; they could setup multiple 40MHz bands but you wouldn’t be able to aggregate them efficiently from a power standpoint).

Re-rationalizing the 2.6GHz band

The BRS/EBS band went through one overhaul in the mid/late 2000s decade. But it seems like it needs another overhaul to deal with the current LTE realities.

Currently, the spectrum is divided into 5.5MHz, 6MHz and 4MHz blocks. The usable spectrum is from 2495MHz to 2690MHz. Not very clean and uniform. Its licensed on both BTAs (basic trading areas, of which there are 487 of them) and 35-mile radius geographic service areas (not something my database knows how to deal with, unfortunately).

I would license them more uniformly, using CMAs or cellular market areas (of which there are 734 of them), but with a uniform block size of 10MHz chunks. I would divide the spectrum into two parts – a middle band that is for TDD technologies (TD-LTE), and on either side FDD technologies (FD-LTE, what all carriers use today). The band plan would start at 2495MHz with four 10MHz uplink blocks, a 5MHz guard band, five 20MHz TDD blocks, another 5MHz guard band, and finally the other four 10MHz downlink blocks paired with the uplink blocks.

2.5ghz reband

Dealing with current licenses is what makes this tricky, if not impossible. Pending the Sprint/Clearwire merger, I’d venture to say that Sprint controlling nearly the entire 190MHz (they average 160MHz in major metro areas), I’d say that its time for them to divest some of those holdings (or terminate the leases or however they hold the spectrum). I really don’t see a use case for more than 100MHz for Sprint even in the next 10 years. There is a limit of 40-50MHz before the radios would consume too much power for use in a cell phone (thats not to say that in the aggregate, all the phones on the network couldn’t use it; they would just choose which 40MHz to broadcast in). In markets where they hold more than 100MHz of spectrum (most large ones), I’d simply give them the 100MHz TDD block. The remaining TDD and other FDD blocks would be auctioned or given to current non-Clearwire owners.

(what follows is a bit of a rant on spectrum ownership and usefulness for the average citizen)

Sprint owning most of the 2.6GHz band is a good strategic position for them, but the main goal for the FCC is (or should be) that the spectrum is being used in the best interests of the people. And I don’t think Sprint sitting on most of the spectrum, letting it go unused, is in the interest of the people of the United States. If they hold 190MHz of spectrum in a market, and they only plan on using 40MHz or even 100MHz over the next 5-10 years, then its time to give up enough of the spectrum so other companies can make use of it, and provide a more competitive marketplace for customers.

I look at the AWS-1 band – the only companies that really use it right now are 1) small/rural carriers and 2) T-Mobile (3G/HSPA+, LTE in 2013). The other major owners of AWS-1 spectrum – AT&T, Verizon and until recently the cable companies – don’t use it at all (some cable companies like Cox did launch a cellular company, but their 3G data service was provided by Sprint’s network, and their AWS-1 spectrum was unused since they never launched LTE before selling the spectrum). So from 2008 to today, large parts of the AWS-1 block have laid fallow. Verizon will likely build out their auxiliary LTE network (for metro areas) on their AWS-1 spectrum, but even that isn’t likely to begin until 2014 since it will likely be an LTE-Advanced network with 20MHz uplink/downlink channels where available (NYC, LA, etc). So the spectrum will likely lie fallow for a total of 7 years (2008-2015, when the first build-out requirements pass for Verizon) before its put to good use. A cautionary tale of letting companies buy and then sit on spectrum for competitive advantage. Exhibit 2: Verizon owning lower 700MHz “B” block licenses in major metro areas (LA, Chicago, Miami) and not doing anything with them. Likely, they’ll be sold to AT&T at the last minute and AT&T would expand their LTE from 5+5 to 10+10 (much to the pleasure of the residents of these cities). Again, sitting on spectrum for competitive advantage is a negative for the consumer. Build-out requirements are helpful in this, but four years is still a long time for carriers to sit on spectrum that could otherwise be used.

New Spectrum!

So this week was apparently a productive one for the FCC. Or maybe they wanted to clear off their docket for the new year.

  • The use of WCS licenses for LTE was approved by the FCC, along with the spectrum transfers from various companies to AT&T. This will give AT&T 20MHz of LTE (10 up, 10 down) in most parts of the country. Future deals with the remaining spectrum holders in the WCS band could give them a nationwide footprint for WCS. Those remaining companies include Sprint. AT&T expects to deploy this in three years. This spectrum is located at 2.3GHz, and will be considered a “high band” with respect to Qualcomm’s WTR1605L (the other high band is the 2.6GHz spectrum that is mostly owned by Clearwire/Sprint). 
  • The approval of the AWS-4 band currently owned by Dish Network. This will add 40MHz of LTE-Advanced within four years. Dish fought hard but failed to keep the FCC from placing limits on the lower 5MHz of their 20MHz upstream channel. Dish will likely only be able to use 15MHz of upstream and 20MHz of downstream. Dish is currently mulling whether or not they will start their own cellular network, or sell the spectrum (and see a huge windfall, since the spectrum was bought out of bankruptcy for around 2B but could fetch a price as high as 6B). This spectrum is at 2Ghz and 2.2GHz, and is considered a “mid band” like PCS and AWS.
  • The approval of the PCS-H block (10MHz, 5+5), likely to be sold to Sprint in an auction by the end of 2013. This 5MHz block will allow Sprint to increase their LTE downstream channel from 5MHz to 10MHz. However, power restrictions on the upper 3MHz of their upstream channel may force them to keep their uplink at 5MHz (again, not a big deal, bandwidth is in demand from the internet to the user, not the user to the internet). This is an extension of the currently used PCS band.

It was a great week for wireless warriors – 70MHz more for LTE will be available to various companies to increase throughput and user speeds. The downside is that it’ll take 3-4 years for all of it to get here for the major metro areas (40% population), and 6-7 years for it to reach 70% of the population.

New Feature + Minor Data Update

I added a new feature – the ability to deep link directly into band/block data. Simply add #band/band-code/block-code to the end of the URL to have it automatically load that data up. So for example, to load up AWS-1 block C, add #band/aw/c to the end of the URL. FWIW, I’m using “AZ” for the two letter band code for AWS-4 (“AW” is AWS-1, so I figure “AX” for AWS-2, “AY” for AWS-3 and “AZ” for AWS-4, makes sense to me).

I also updated the database to move all the WCS licenses from the various companies that sold them to AT&T. Not all the WCS licenses moved, and Sprint still owns several large blocks in the southern US (notably, both of the ones covering Dallas, AT&T’s home turf. I didn’t move over the few AWS licenses transferred from Nextwave, nor did I include any recent 700MHz transfers made recently.