The Spectrum Conundrum

Feb 1, 2001 12:00 PM, Deborah Young, Revenue-Management Editor

When Nextel, a supposedly spectrum-starved carrier, made an early withdrawal from the recent C- and F-block auction, the puzzling relationship between spectrum and wireless carriers became even more mind-bending. Spectrum is so expensive that some carriers can't afford to get it, so essential to 3G services that they can't afford not to have it, but so limited that even the maximum amount allowable by the FCC likely won't be enough to sustain 3G services anyway.

In a recent report, The Battle Over Spectrum: 3G and the Wireless Internet, CTIA attributed the dilemma to the U.S. government's failure to create a long-term spectrum management plan.

"While the U.S. is just beginning to study potential spectrum available for wireless data services, much of the rest of the world is already moving forward with licensing 3G carriers," the report said.

A long-term plan would address issues such as the designation of additional spectrum for commercial use, lifting the existing spectrum caps and structuring federal regulations to encourage the efficient use of spectrum.

Brian Fontes, Cingular vice president of federal relations, predicted that the FCC will issue an order on the spectrum-cap issue by summer's end.

Cingular wants the FCC to raise or lift the spectrum cap and abolish government rules that create inefficient uses of spectrum.

"In the cellular market, carriers still are required to provide analog service, when the PCS environment is all digital," he said. "If we could convert all of the spectrum to digital, we would be much more efficient than retaining an antiquated rule requiring analog services."

A possible complication is the potential effect on competition.

If the spectrum cap is abolished, for example, small players still will have options. But the ability of large carriers to acquire more spectrum may be perceived as a competitive inequity.

Competition also may extend beyond traditional wireless companies that haven't paid for 3G spectrum.

"This has come to the fore recently with regard to TV spectrum," said Bob Petit, a partner in the law firm of Wiley, Rein & Fielding. "What some of the TV broadcasters want to do when they go digital, because they won't use the whole signal, is to take a chunk of it and do other services with it, like wireless data. This has caused some concern on the hill and at the FCC as well."

Many industry insiders recognize that the pressure caused by the high price of spectrum will lead to a weeding of carriers from markets. Some see this as a negative, leading to the thinning of small companies from the wireless landscape. Others see the reduction of competition as inevitable.

"We've not seen any model that shows that more than four entities can profit (in a market) over the long term," said industry consultant Herschel Shosteck.

[C] Openwave and Geoworks have made peace over their patent dispute. The out-of-court agreement puts the companies together in a royalty-free patent cross-license. Openwave gets a worldwide license to Geoworks' flexible-user-interface patent and a second patent to be determined. Geoworks gets a license to Openwave's patent on a method for combining narrowband and restricted narrowband channels to deliver content such as SMS, and another patent to be selected.

[C] SiGEM antennas were used to map the Lauberhorn 2001, a World Cup downhill ski race, which took place in Switzerland. Using GPS technology, skiers were able to track their performance on the course. Skiers also could use their GPS location in conjunction with video to observe their runs. The antennas are small enough to be mounted on a skier's helmet.

In the Jan. 1, "Batteries Not Included" story, the photo was not credited to Talbott L. Wilson. Wireless Review regrets the error.