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The most interesting latest news on the topic: FCC |
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Nearly 30 million Americans, or one in six mobile users, experienced "bill shock," a sudden and unexpected jump in monthly cellular bills, and the Federal Communications Commission is battling to combat the problem. |
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Think your cell phone bill is too high? Watch out -- Verizon is putting together a plan to win regulator approval to buy spectrum from cable companies, potentially undermining competition and making things worse for wireless customers. |
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Federal regulators are scrutinizing Verizon's deal to acquire spectrum from cable companies, throwing a wrench into its plans to expand its 4G network. The FCC is asking the Basking Ridge, N.J.-based company for LTE deployment plans -- how it intends to use the $3.6 billion worth of airwaves in its long-term strategy -- should the Comcast and Time Warner Cable deal be approved. Verizon can easily prove the need for spectrum, as well as show the positive effects on its service. But the marketing deal it has with the cable companies may lead to trouble. "The additional competitive implications of the commercial agreements are being reviewed in a separate inquiry," the agency said in statement. "This administrative approach will facilitate the fair, timely, and thorough review of the proposed transaction and agreements." Verizon's agreement, which includes a retail partnership, offers Comcast and Time Warner Cable services in locations where its FIOS technology is unavailable, prompting FCC concern that Verizon won't grow its cable service in those areas. In addition, the cable companies plan to offer Verizon's wireless service in some areas, which regulators fears may eliminate the possibility of the providers venturing into the mobile market. Over the past year, the FCC used extreme care to handle spectrum transactions, helping put an end to the AT&T and T-Mobile merger. It also monitored the actions of wireless providers in their course to acquire additional spectrum to build out their high-speed networks. Should the FCC deny Verizon's request for spectrum, the carrier may attempt to rework the terms of its cross-marketing deal, but it's uncertain whether the cable companies would continue to move forward. Verizon's spectrum purchase, coupled with its already strong LTE network, would place the company in a firm strategic position to expand its 4G service. However, the FCC's concerns and its competitors' determination to fight the deal means approval of its transaction may be far from certain. Verizon's Spectrum Deal Hits FCC Snag |
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Verizon claims it will begin to experience spectrum shortages by 2013, as the carrier looks for the Federal Communications Commission to approve its deal with cable companies. The Basking Ridge, N.J.-based company said in an FCC filing it will run out of spectrum in some areas in 2013 and will begin to feel widespread effects by 2015. The news coincides with the carrier's pending approval on a $3.6 billion purchase of spectrum from cable companies Comcast, Time Warner Cable and Bright House Networks to combat the issue. Spectrum is a rare and limited resource that may cause concerns for wireless providers in the future, but Verizon may be exaggerating its current situation to persuade the FCC to approve the sale. The agency has taken extreme care examining deals that involve large amounts of spectrum changing hands, and while a failed deal with the cable companies may not hurt Verizon as much as it claims, it would be a major blow for the carrier. Verizon's timetable on when spectrum will become an issue also isn't consistent with the company's current place in the market. Only five percent of Verizon subscribers actively use LTE service, putting very little strain on the carrier's 4G network. In addition, the provider has offered a "double-data" promotion to all customers who buy LTE devices, a decision some might consider curious for a company that claims it is in such a dire spectrum situation. One of the main reasons Verizon is pressuring the federal regulator to approve its spectrum purchase is due to new opposition from T-Mobile. The fourth place carrier says that the deal will give Verizon an "excessive concentration" of wireless spectrum, effectively leaving smaller competitors unable to compete. The ball is in the FCC's court, but until it makes a final decision, Verizon and its competitors will continue to make strong cases that will likely contradict each other as they struggle to secure much-needed spectrum to edge ahead of the pack. |
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Dish Network's plan to break into the wireless market is facing regulatory roadblocks, reducing the chance for a new carrier to enter the market in the near future. After previously approving a Dish spectrum purchase, the Federal Communications Commission says it's now going to examine the potential for the satellite operator to launch a wireless network, instead of giving its approval outright. Dish wants to build an LTE-advanced network in a band of spectrum it acquired last year, worth around $3 billion. At the heart of the FCC's discussions is whether Dish Network's wireless carrier is worth the resources at a time when spectrum is tightly held and carefully controlled. The skyrocketing popularity of smartphones and tablets is pushing the boundaries of what the wireless infrastructure can handle, causing carriers to scramble for airwaves and giving spectrum owners the chance to break into the wireless market. The FCC's cautionary stance responds to these circumstances, but the potential denial of the satellite provider's plans could be a blow to developing competition in the mobile market, keeping a new network off the market for at least another year. The FCC says it will take until the end of the year to decide whether to allow Dish's network, which will involve a public comment period that will likely feature statements from top industry players like Verizon and AT&T. Both carriers stated in the past a Dish network would interfere with existing services. Dish's spectrum acquisition doesn't guarantee use, and similar efforts to add new market players and reallocate airwaves were not granted. For example, the FCC denied network approval for LightSquared after ruling using its band of spectrum interfered with GPS networks, including those used by the Department of Defense. That decision came after an initial approval for the network, and after receiving comments from federal agencies and others questioning the decision. The FCC could use the Dish buy as an opportunity to check and decide new standards for network approval, maybe through a process that will examine interference issues in a more thorough approach while weighing the need for new carriers. "The rulemaking process will best serve the public interest and maximize the long-term value of the spectrum for the American economy," said an FCC spokesperson after the Dish announcement. Dish, as a popular pay-TV network, could use a mobile network to bundle services. On the other hand, if the allowances are not granted, Dish could sell off the spectrum, or pursue plans to partner with another carrier in trying to offer a bundled service, a future possibility other carriers mentioned. Since spectrum resources are shrinking, the FCC will continue to exercise caution as proposed uses crop up for approval. At the same time, the crunch is inevitable, and a growing cause for concern as data-hungry smartphones transform into the standards means of communication. As a result, the FCC is on a quest for expanded resources, and carriers compete wildly on purchases. Despite the acquisition approval, Dish's attempt to build a network is far from over. But a delayed process doesn't equal a failure, as the FCC may be taking its time to ensure whatever decision they make makes sense in the long-term for resource allocation in the mobile industry. |
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FCC Chairman Julius Genachowski and AT&T Mobility CEO Ralph de la Vega advocated contrasting agendas for the U.S. spectrum squeeze at Mobile World Congress, pointing to further conflict between carriers and regulators. Genachowski called for auctions and unlicensed use of "junk bands," useless for long-distance communication but helpful for BlueTooth and Wi-Fi technology. He acknowledged government decisions may have interfered with optimal spectrum use, but insisted FCC regulation is necessary to keep the market balanced and prevent monopoly. "Addressing the spectrum crunch and seizing the mobile broadband opportunity will require all stakeholders to work together," said Genachowski. "And as we work together on ways to address physical and invisible mobile broadband infrastructure, we must also focus on empowering consumers." On AT&T's end, De la Vega agreed on the need for sustainable business practices, but pushed for loosened regulations for allocating spectrum. AT&T and other major carriers disagree with the FCC's restrictions preventing larger companies from buying unlimited amounts of spectrum. AT&T is planning around FCC restrictions by exploring a "living network" to boost data speed and reduce its reliance on spectrum, but this innovation is not enough to fortify the carrier's network. AT&T successfully acquired a small chunk of spectrum through its deal with Qualcomm and intends to pursue other small purchases. But, as de la Vega emphasized in his speech, the company does not want hobbled by strict regulations. Carriers and the FCC both recognize the need for spectrum auctions and allocations, but as these speeches suggest, they disagree on how much authority the FCC should have in the process. Major carriers like AT&T and Verizon want to grab as much spectrum as possible, a mission compromised by the FCC's regulations to ensure competition, protect smaller carriers and contemplate other considerations. For example, the FCC didn't approve Sprint's recent spectrum gambit with LightSquared because of interference with GPS receivers, including those used by the government. The FCC initially approved LightSquared's plans, but after pressure from lobbyists and the agency's own review, regulators rejected the deal illustrating its reluctance to kowtow to carrier complaints, even the smaller ones. Genachowski wants to make more spectrum available for carriers, to buoy the mobile technology industry and ensure fair prices for consumers. The FCC's rejection of Sprint's spectrum deal complicated its own agenda, because Sprint now lacks a spectrum partner, allowing larger carriers like AT&T more room to grow. Though the FCC's decision was a blow for Sprint, it may come to T-Mobile's rescue. T-Mobile asked the FCC to block Verizon's upcoming spectrum deal, claiming the arrangement will hurt competition by giving Verizon an "excessive concentration" of spectrum. Genachowski did not mention what the FCC plans to do about the complaint, but if his remarks at the MWC hold true, Verizon will face continued scrutiny, as T-Mobile alleges the Verizon deal damages competition, which the FCC pledged to uphold. The FCC and carriers like AT&T want to reduce the spectrum crisis and allow for the mobile industry's continued success and innovation. Genachowski's remarks, however, point to the FCC's continued commitment to ensuring a balanced marketplace, without dominating carriers. Major carriers are unlikely to abandon their search for more spectrum and more customers, so more conflict with the FCC looks inevitable. De la Vega's speech indicates carriers still want to persuade the FCC to loosen regulations, but could have to settle for securing non-competitive ways to get spectrum, and to foster innovation to make optimal use of the spectrum they have. |
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T-Mobile is seeking to block Verizon from buying cable company spectrum, as carriers fight to protect their interests and boost bandwidth in competing for faster networks. In a filing late, T-Mobile asked the Federal Communications Commission to halt a pending $3.6 billion deal between Verizon and Comcast, on grounds the deal would give the company an "excessive concentration" of wireless spectrum. Spectrum is in short supply and carriers are scrambling to acquire more of it, leading to infighting between wireless industry players as number-one Verizon seeks to stay ahead in a competitive market and the number-four carrier, T-Mobile, struggles to catch up. Verizon already has a lot of spectrum and uses it to fuel its 4G network, which is the largest in the U.S. It needs yet more bandwidth, however, to satisfy its 4G LTE network rollout plans and further its strategy to offer only data-hungry LTE phones in 2012. T-Mobile, on the other hand, lags behind Verizon, AT&T and Sprint in spectrum and network speed. The carrier received $1 billion in spectrum last month as part of the breakup agreement after its failed acquisition by AT&T, but it isn't enough for the carrier to catch up with industry leaders. Unlike Verizon, T-Mobile does not have an LTE network or the resources to roll one out, and continues to rely on inferior HSPA+ technology to connect its 4G devices. Keeping Verizon from acquiring more spectrum is in T-Mobile's best business interests, and it seeks to keep its more powerful rival from pulling even further ahead in the network race. T-Mobile's appeal to the FCC also signals Verizon it must prepare for closer scrutiny of its spectrum deals, not just by regulators and lawmakers, but by industry rivals as well. Sprint also commented on the purchase. The number-three U.S. carrier did not ask the FCC to block the deal, but suggested regulators should consider the wider implications of the agreement between Verizon and Comcast, especially in regards to cross-marketing of products. As part of the spectrum purchase, Verizon and Comcast agreed to cross-sell products and services. For example, Verizon stores will sell Comcast cable services and Comcast will sell and promote Verizon's cell phone plans. Analysts caution this cross-marketing agreement could set historic precedent, according to the New York Times. Phone and cable companies, once rivals, could unite in new, lucrative deals raising antitrust concerns the two industries are forming partnerships, rather than competing with each other. Verizon and Comcast are preparing for Senate and Justice Department inquiries into their pending deal, and now T-Mobile joined its voice to the opposition, as the issue of spectrum acquisition becomes increasingly politicized and competitive. |
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Dish Network plans to use its spectrum to build a wireless network, pending regulatory approval, or sell its airewaves to carriers in need of precious bandwidth. Satellite TV provider Dish Network is seeking a waiver from the FCC to begin building a high-speed wireless network on the spectrum it currently owns, according to CNET. However, if the agency is not satisfied with Dish Network's plans, it can deny the company the waiver, forcing the satellite provider to explore other options, including a sale of its spectrum or a partnership with another company. Both options will have major ramifications in the scramble for spectrum among wireless carriers, with Dish poised as a key piece in the race to boost airwaves. FCC officials told the Washington Post they still have faith satellite technology can be used to create wireless networks, despite the failure of LightSquared's endeavors. However, future propositions like Dish Network's face increasing pressure to be foolproof to get approval, presenting a real possibility the company will not receive the waiver it requires to move forward with its own network. Dish Network will have several suitors for its spectrum if the FCC does not allow the company to move forward with its plans. All U.S. carriers are looking for resolutions to their spectrum issues, and AT&T and T-Mobile will likely make bids if the Dish Network decides to sell. AT&T needs the spectrum to continue expansion of its own LTE network, while T-Mobile has some money to spend after receiving billions from AT&T in a breakup fee after the companies' failed merger. Both carriers will likely be players to buy Dish's spectrum and could also be involved in potential partnerships, from sharing wireless network data to cross-selling deals, with the satellite provider. The fate of the spectrum will once again fall into the FCC's hands if Dish Network does decide to sell. The agency will be in charge of monitoring the transaction and reviewing the details to make sure any proposal is fair for both sides and the competition, much like it's doing now with Verizon's potential purchase of spectrum from cable companies. Dish Network's first choice may be to build its own wireless network, but the amount of spectrum it already holds means the company is poised to make money no matter what, as long as the FCC doesn't stand in its way. |
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Sprint is left scrambling for spectrum, inhibiting its long-term expansion, after the Federal Communications Commission rejected LightSquared's broadband network plan. The federal agency, which had earlier given LightSquared's proposed network conditional approval, said the company's plan would interfere with GPS receivers. The FCC's decision leaves Sprint without a network provider for its planned 4G LTE rollout. Last month, Sprint gave LightSquared a 30-day extension to push its proposal past regulators. Since that effort failed, the agreement between the two companies will likely fall apart. Sprint, facing the same spectrum crunch as its rivals, now must look elsewhere for the bandwidth it needs to catch up with Verizon and AT&T in the 4G race. The carrier will likely lean on its agreement with Clearwire to meet immediate spectrum needs, but Clearwire isn't expected to roll out LTE before 2013, hindering Sprint's ability to compete for today's fastest devices. On a deeper level, the FCC's ban of LightSquared's network removes a potential solution to the overall spectrum strain faced by the wireless industry. LightSquared can't use satellite-phone transmission networks to build out spectrum, and neither can any other company, at least until someone solves the issues surrounding GPS signals. The FCC also potentially set back its own agenda with this decision. The agency aims to make more spectrum available for mobile devices, further competition in the wireless industry, and ensure fair pricing for consumers by allowing more carriers and broadband providers to innovate in the wireless market. The regulatory decision leaves the mobile industry short a potential competitor and removes a viable option for spectrum gain, ultimately allowing Verizon and AT&T to stay dominant by hampering the competition. The balance of power swings in favor of GPS companies with the FCC ruling, suggesting that the industry gained lobbying power through its use by powerful public safety industries, including the military and aviation, which spoke out against the LightSquared deal. "GPS manufacturers have been selling devices that listen into frequencies outside of their assigned spectrum band, namely into LightSquared's licensed band," said Jeff Carlisle, LightSquared's executive vice president for regulatory affairs and public policy, on the company's blog this week. "The GPS industry has leveraged years of insider relationships and massive lobbying dollars to make sure that they don't have to fix the problem they created." The FCC implied in its decision the GPS industry carries its own responsibility for helping untangle spectrum rights, suggesting GPS companies and ventures like LightSquared that hope to use satellite bandwidth must work out a deal on their own. LightSquared disagrees with the FCC ruling and disputes the test results the agency employed in making its decision, and has asked the agency to step in and set standards for GPS reliability. The FCC's ban on LightSquared's proposal leaves Sprint in particular, and the wireless industry as a whole, floundering for more spectrum, potentially hindering wireless industry growth and competition. |
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A proposed bill in Congress would strip the FCC's power to monitor spectrum auctioning, potentially opening up the airwaves to Verizon and AT&T and hobbling smaller carriers like Sprint. The section in question, part of a small section of a House jobs bill, prevents the FCC from imposing any conditions on who can buy what spectrum at future auctions. It also prevents the FCC from requiring net neutrality or mandatory wholesaling on licenses. The provision, if passed, will pit smaller carriers against those with more lobbying power in a regulatory arena, with the FCC on the side of increased competition. Smaller cell carriers -- including Sprint, T-Mobile, Cricket and Leap Wireless, along with trade group RCA -- sent a letter to 20 senators and representatives asking they remove the section. If the bill passes as written, large companies like AT&T and Verizon wouldn't be subject to acquisition limits or prohibitions on bidding on spectrum, a public resource. For their part, smaller carriers running to keep pace in the smartphone market would find it difficult to acquire the spectrum needed to support consumers expecting support for data-heavy usage. Since the spectrum provision is a small section of the larger payroll tax bill, the letter from the carriers may push lawmakers' attention toward a decision they might otherwise interpret as minor. In addition to the carriers' protests, the FCC is also against the provision, Section 4105, in part because monitoring spectrum auctions brings significant revenue to the U.S. government. In the last 20 years, spectrum auctions brought in about $50 billion. The FCC is currently pushing Congress for permission to stage voluntary spectrum auctions as the mobile market grows. At a time when the need for expansive spectrum access is a prime concern for mobile networks, the FCC makes sure there's enough to support growing demands of data traffic. Taking away its auction monitoring rights allows the resource, getting ever scarcer, to get scooped up by the same hands. The move would marginalize the FCC's rule-making authority. Under Section 4105, smaller carriers would be subject to licensing out with those larger carriers, like by using fair roaming deals to enhance coverage outside their network territory. RCA president and CEO Steven K. Berry said the FCC should keep authority to design auctions that foster fair competition, and noted the incongruity of the issue being included in a payroll tax bill. "It concerns me greatly that major telecom policy changes are being contemplated in a non-related payroll tax measure," Berry wrote in a press release. "Section 4105 creates enormous uncertainties and will impair every competitive carrier's ability to build out their businesses and seek investors." This provision ensures a clear path to a bright and powerful future for the industry giants, however. AT&T's Bob Quinn, the company's federal regulatory head, referenced the proposed legislation in a recent public blog on Sprint's roaming policies. Quinn said the company believes the auction, not the agency, should determine spectrum allocation without exclusion of any bidders. For example, under the proposed legislation, AT&T would be capable of purchasing as much as it desired without intervention. "When spectrum is scarce, policymakers should ensure that spectrum is utilized most efficiently," he says in the blog. "That means letting the market drive the spectrum into the hands of competitors who have the incentives to deploy the spectrum quickly and most efficiently." Ensuring fair allocation of wireless spectrum serves as a primary function of the FCC, and the removal of its rights to oversee the process threatens viability of lower-tier competitors. If the bill passes as written, it could leave smaller carriers that serve millions of consumers at the mercy of the top two industry players at a time when racing for spectrum ownership is a key to success, and reliability, in the mobile future. |
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