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AT&T estimates that it will cost $1 billion to $2 billion to integrate Qualcomm’s Lower D and E Block 700 MHz spectrum into its network, according to a filing with the FCC, reports Fierce Wireless.

AT&T is currently seeking FCC approval of its $1.93 billion purchase of the spectrum, which includes 12 MHz of Lower D and E Block spectrum (which covers more than 70 million POPs in New York, Boston, Philadelphia, Los Angeles and San Francisco) and 6 MHz of Lower D Block spectrum (which covers 230 million POPs across much of the rest of the country).

AT&T said it plans to use carrier aggregation technology to meld together Qualcomm’s unpaired 700 MHz spectrum with AT&T’s existing AWS, 1900 MHz or 850 MHz spectrum. However, it also create a number of significant baseband and RF design challenges.

AT&T said that it will need to deploy new chipsets and handsets and upgrade its base stations to take advantage of Qualcomm’s spectrum, a process that means AT&T won’t be able to offer the resulting faster speeds to customers until late 2014.

AT&T hopes to supplement capacity on its planned LTE network by taking MediaFLO spectrum, designed to broadcast 50,000 watts, and pair it with spectrum in the AWS (1.7/2.1 MHz), PCS (1900 MHz) or 850 MHz cellular bands. Interference problems apparently preclude the operator from bonding Qualcomm’s spectrum with AT&T’s lower 700 MHz B- and C-block spectrum, reports Fierce Wireless, although why that would be is not clear.

Qualcomm sold its D and E-block Lower Band 700 MHz licenses to AT&T for $1.925 billion last year. In all, Qualcomm spent a total of $600m for their licenses.

Not a bad flip.

AT&T’s six D-band EAGs (6 MHz) cover the entire U.S. while their five E-band BEAs (also 6 MHz) cover about 75m people in major metropolitan areas including Boston, Los Angeles, New York, Chicago, San Francisco and Philadelphia.

EchoStar (Frontier) owns the other unpaired chunk of 700 MHz spectrum (in the “E” block). Their 168 E-block licenses cover nearly the entire country.

If the “D” and the “E” blocks were merged together, it would result in one contiguous, nationwide 12 MHZ terrestrial “wireless cable” channel. One 1000 watt transmitter could cost-effectively deliver a dozen “live” standard definition television channels thoughout a large metropolitan area, along with continuous wireless downloads and updates for ebooks, newspapers and magazines.

I know MediaFLO ended in failure. But tablets have arrived. Digital publications and media need a mass market. A $30/month data plan will kill it. Dead.

Trying to gang together disparate weak 2.1 GHz (two-way) and powerful 700 MHz (one-way) spectrum seems futile. Phones at the edge of 700 MHz range won’t be able to “hear” an AWS call at 2.1 GHz. What’s the point?

One nationwide 12 MHz datacast channel could deliver more bang for the buck.

The AT&T/T-Mobile merger proposal is not about spectrum. AT&T’s own legal documents put the value of T-Mobile’s 3G at $3.8 billion. But if the merger goes through, AT&T will have give up nearly half of its own (unused) AWS spectrum. It’s a huge, ill-conceived expense without benefit to shareholders or consumers.

Related DailyWireless Space and Satellite News includes; Combining AWS and 700 Mhz – Why, AT&T Gets Heat on MediaFLO Spectrum, U.S. Wireless Growth, T-Mobile’s Secret Sauce: 2x10MHz,Spectrum Drama: Made for TV, Dish Network’s 700 MHz Spectrum , Ergen Likely Got TerreStar, Charlie Ergen’s Spectacular Triple Play, Dish Networks: Wireless Play is On, Lightsquared + Sprint Deal Done?, Clearwire Chooses LTE Advanced, Will Sprint Go TD-LTE?

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