T-Mobile Needs TV Spectrum for In-Building Penetration, Ham Says

"We want to be able to compete wherever AT&T and Verizon are,” Ham said. She said she sometimes eats lunch at Hill Country, a barbecue restaurant in Washington, D.C. “Part of the restaurant is in the basement,” she said. “One of the folks who works for me likes to have lunch with a friend from Verizon there. In the basement of Hill Country Barbecue if you have a T-Mobile phone you're not going to get coverage. If you have a Verizon phone you will, even though we're collocated on the very same cell site in that neighborhood.” Verizon uses its low-band 850 MHz spectrum in the neighborhood, T-Mobile its upper-band AWS-1 spectrum, Ham said. “That’s the issue I think for T-Mobile, the ability to penetrate deep into buildings,” she said. The 600 MHz TV spectrum the FCC will sell in the incentive auction is ideal for getting inside buildings, she said. “You watch your TV indoors -- well, you want to use your cellphone indoors, too.”

Ham said T-Mobile was always focused on 700 MHz interoperability, even before it got the Boston license, because of its focus on using the band for roaming. “We were very active early on in the proceeding,” she said. “We filed a pretty meaty set of materials on that. We definitely caught the eye of AT&T. They were annoyed that we were weighing in."

"We're on an upward trajectory, we're doing well, we're shaking up the marketplace and having some success with that,” Ham said. “On the regulatory front we very much focus on spectrum.” T-Mobile has been “working well” with Verizon Wireless and AT&T on getting more government spectrum in play for broadband, she said.

Chuck Willis, vice president of Bluegrass Cellular, said his company faces many of the same challenges as other small carriers. “The size of spectrum blocks is a major issue for us,” Willis said. “Continued access to the latest access devices is a big issue for us.” Bluegrass has had Apple handsets for about 16 months, but about 35 percent of the carrier’s customers carry iPhones and 50 percent of sales are iPhone sales, Willis said.

Bluegrass just start offering the Samsung Galaxy S4 last week and sales have been positive, Willis said. “But as time goes on, who knows what the issues are going to be with handsets,” he said. “For a long time we were locked out of the iPhone handsets and we paid a tremendous price for that.” He said customers previously reported leaving because they wanted the iPhone. Once his company finally got the iPhone, “lo and behold, people came back,” he said. “We have more in-ports than we have out-ports.”

Jeff Blum, senior vice president at Dish Network, said his company has felt compelled to get into the wireless business to continue to increase its customer base. But becoming a wireless company is a tough challenge, he conceded. “It’s very different,” he said. Top Dish executives have “flown around the world meeting with you and learning everything they can about the industry and the risks and the opportunities,” Blum said. It’s “very challenging but also exciting,” he said. “Our goal is to compete against AT&T and Verizon.”

Jeff Carlisle, executive vice president at LightSquared, said the company remains hopeful the FCC will act soon on its license modification application. “Where is the company right now?” he asked. “We have a plan. We had engineers working for 10 years in order to develop a technology that would allow you to take a regular-sized cellphone, using regular battery life and all of the trappings that consumers are used to right now and use it anywhere in the country, up to 200 miles offshore.”

Carlisle recounted some of the history of LightSquared’s conflict with GPS. “Right now our company is in bankruptcy; we will go through a sale process relatively soon,” he said. “The main outside bid for the company values the company according to current circumstances, where there is a large amount of uncertainty around how we can use our spectrum.” When the FCC auctions spectrum, it first offers certainty about how it can be used, Carlisle said. “We believe the same dynamic should apply here, it’s the fairest way to move forward,” he said. The FCC should also act quickly to get the spectrum in play for commercial use. “Look at what’s happened: We've walked away or proposed to walk away from 10 MHz of licensed commercial spectrum, which in effect has been annexed to government spectrum,” he said. “The 500 MHz that should be moving to commercial use from government use -- we're actually at negative 10 right now” when LightSquared is factored in.