FirstNet Could Get Paid Before Incentive Auction, Carrier Officials Say
LAS VEGAS -- Executives from T-Mobile and U.S. Cellular predicted in a discussion of the spectrum sale at the Competitive Carriers Association’s annual meeting Monday that the federal government could raise enough money to pay for FirstNet before the incentive auction of broadcast TV spectrum even gets under way as early as next year.
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"Between us folks here, I think there’s a good chance FirstNet gets all its money before the incentive auction event starts,” said T-Mobile Senior Vice President Tom Sugrue. He said last year’s spectrum law specifies that FirstNet will also draw funds from the H-block auction, the AWS-3 auction and possibly federal spectrum that will be cleared of federal incumbents. “There’s going to be enough money there,” said Sugrue. “I'm not even sure the incentive auction would be the critical half of the money used for FirstNet."
"FirstNet will get its money before you ever get to the 600 MHz auction,” said Grant Spellmeyer, vice president at U.S. Cellular.
Sugure said T-Mobile proposed market-by-market limits on how much lower-band spectrum any carrier can own in an individual market, but his company is willing to pay a fair price for the 600 MHz spectrum. “It’s not that we're unwilling to pay market price and so forth, that we're looking for a bargain,” he said. “We're willing to pay full market price for the spectrum. … This is not going to be an inexpensive exercise."
Broadcast attorney Gerry Waldron of Covington & Burling said broadcasters have different concerns than carriers. “Most of what they're worried about is will their signal have integrity after the auction is over,” Waldron said. Broadcasters don’t spend that much time focused on what the incentive auction means for wireless carriers, he said. “They spend a lot of time thinking about the repacking process and what is the transparency of the reverse auction.” Waldron said broadcasters have no experience with auctions like the incentive auction and would prefer the FCC take the time to get things right rather than rushing an auction.
LTE just launched in September 2010 in the U.S., but carriers have already gained “a lot of experience,” said Amit Patel, Alcatel-Lucent chief technology officer for U.S. major accounts, in a earlier session at the conference Monday. All the big carriers are now offering LTE, with “T-Mobile finally joining the club at the beginning of this year” and “lots and lots of small carriers” deploying as well, he said. There are about 200 live LTE networks worldwide, likely to climb to 230 by year-end, he said.
"LTE has come to fruition much faster than any other technology before it,” Patel said. “Because there’s so much out there now, there’s a lot of experience in how to accelerate the capabilities that LTE brings.” Verizon Wireless “started first and has been aggressive throughout,” he said. AT&T covers “all the big cities” though there are holes in its map, Amit said. AT&T started with an HSPA+ network that was faster than Verizon’s CDMA network, he said. “Technically it was fine that they came later” than Verizon, but “marketing-wise they felt like they fell behind,” he said.
Verizon already covers 300 million in the U.S. with LTE, with AT&T projected to cover 270 million by year-end and Sprint and T-Mobile about 200 million by the end of the year, Amit said. But he also said AT&T faces a bigger challenge since it doesn’t own contiguous spectrum nationwide. “In some markets they own 700 MHz lower B block, in other markets they own C block, some markets they own both,” he said. “Many markets they don’t own either.” Verizon can roll out 10 MHz LTE nationwide, but for AT&T “it’s a mix and match of deployments across the country,” Amit said.
Erik Hollingsworth of C Spire Wireless offered the perspective of a rural carrier deploying LTE. “We've learned on the way,” he said. “For those of you who haven’t deployed LTE you'll get lots of bumps and bruises from doing this, but it’s well worth it.”
At an opening panel on the growth in machine-to-machine communications, panelists said M2M is seeing huge growth but it can be tough for smaller carriers to keep up. M2M covers everything from transportation and the connected car to patient monitoring and health to home security. Slayton Stewart, CEO of Carolina West Wireless, said small carriers need to band together and many have been “left out” from turning a profit on M2M. “We don’t have a large team for business development,” he said. “We're still trying to figure it out.”