With AT&T’s defeat of the T-Mobile merger, competitors have turned their attention to AT&T’s planned acquisition of Qualcomm’s MediaFlo spectrum, previously used for mobile television, in Block “D” of the 700 MHz band.
AT&T wants to buy MediaFLO spectrum for $1.93 billion. It may also have it’s eyes on the adjoining 700 MHz spectrum in Block “E”, currently owned by Dish Networks.
The FCC said earlier this month it would approve the FloTV deal with an unspecified set of conditions. The agency’s review of the spectrum purchase had been held up by “a number of related issues” associated with the T-Mobile deal.
UPDATE: The FCC approved AT&T’s $1.9 billion acquisition of Qualcomm’s 700 MHz spectrum, this afternoon. The Thursday 3-1 vote, with minor conditions, means that AT&T and Qualcomm could close the deal by the end of the year, reports the WSJ. The FCC imposed data roaming and interference conditions on the deal.
AT&T hopes to supplement capacity on its planned LTE network by taking MediaFLO spectrum and pairing it with spectrum in the AWS (1.7/2.1 MHz), PCS (1900 MHz) or 850 MHz cellular bands. Interference problems preclude the operator from bonding Qualcomm’s spectrum with AT&T’s lower 700 MHz B- and C-block spectrum, reports Fierce Wireless.
Sprint, U.S. Cellular, C Spire Wireless and Vulcan Wireless want the FCC to mandate new banding requirements for AT&T as part of its conditional approval for the Flo transaction.
The smaller operators want AT&T to make devices running on its Band Class 17 LTE network interoperable with their Band Class 12 devices used in their regional block “A” licensed in the 700 MHz spectrum. Block “A” radios require a different power profile in order to avoid interference with the adjoining television spectrum.
There is no roaming between carriers in the 700 MHz (LTE) bands, unlike the 3G (PCS) and 4G (AWS) spectrum.
The above chart shows Verizon owning some 25 licenses in the lower “A” block. But two weeks ago, Verizon swapped their 12 MHz A Block spectrum with Cricket, so they may not need to provide roaming on the “A” block. Verizon’s LTE devices work only on their nationwide (10 MHz x 2) upper C Block spectrum.
AT&T doesn’t have “A” block spectrum. Their devices only work on their own B and C block spectrum in the lower 700 MHz band. Smaller carriers are completely locked out of the larger LTE universe run by AT&T and Verizon.
Verizon and AT&T are not interoperable. They’re [especially] not interoperable with smaller carriers. Without roaming, smaller carriers are disadvantaged.
Such restrictive practices can be used as a competitive blocking tactic to undermine competition, reduce consumer choice, slow the build out of broadband in rural areas, and reduce the value of the spectrum, argue rural carriers.
AT&T and Verizon say they can lock-out anyone they want. Crying is not allowed.
Both AT&T and Verizon manage to interoperate in public safety (band class 14) – which requires different power requirements then their commercial LTE service. Apparently where there’s a buck to be made, interoperability happens:
- AT&T and public-safety vendor Harris announced an alliance that is designed to bring next-generation LTE solutions to the first-responders.
- Motorola and Alcatel-Lucent provide LTE public-safety networking gear.
AT&T and Verizon maintain that compatibility between spectrum bands would raise costs. Competitors say roaming between 700 MHz carriers should be mandated.
The FCC just gave AT&T more rope with Qualcomm’s spectrum.
Aloha Partners paid $6.2 million for for the former UHF channel 55 on the West Coast. No other regional “D” licenses were purchased in the August, 2002 FCC auction. Then Qualcomm woke up to the potential of MediaFLO. They paid $38 million for channel 55 (the “D” block) for the rest of the country in auction 49 in 2008, (and acquired Aloha Partner’s West Coast segment.
Qualcomm also purchased additional licenses in the adjoining E block in the 2008, 700 MHz auction. Those licenses covered Boston, Los Angeles, New York City, Philadelphia and much of the West Coast.
Qualcomm’s “E” block coverage doubled their 700 MHz MediaFLO spectrum in coastal areas, with a footprint of more than 68 million people in 28 individual markets (21 of its top 100 markets) at a total cost around $558 million. It added to Qualcomm’s previous “D” block spectrum coverage throughout most of the country (some 230 million POPs).
But the one-way MediaFLO was soon discovered to be a money pit. Three years ago few people had smart phones with large screens and tablets were nearly non-existent. Nobody wanted to pay $10-$20/month for mobile video.
So Qualcomm flipped those licenses to AT&T who was willing to pay $1.9 billion. Whether AT&T’s lauded spectrum aggregation will work remains to be seen. Some speculate that mobile users at Qualcomm’s cell edge won’t be able to connect to towers and therefore won’t get the benefits of downstream spectrum aggregation.
Datacasting and “wireless cable” could have happened for everyone at little or no cost. Too bad Fox, USA Today, the NY Times and local newspapers didn’t partner with the Dish Blockbuster unit. Consumers are unlikely to get a cost/effective tablet delivery system – now – from AT&T.
The Qualcomm purchase could make a Dish purchase more likely – taking out Dishs’ nationwide “E” band, with similar characteristics. Neither AT&T nor Dish have any AWS/MSS infrastructure, so that would cost billions more. T-Mobile’s AWS infrastructure, on the other hand, might support the 40 MHz Dish LTE spectrum with little modification or delay.
Simple hubris may prevent AT&T from buying 2.6 GHz from Sprint.
Perhaps I’m being presumptuous and unfair, but it appears that mis-management and inefficiency will cost AT&T its competitive edge. They wasted a fortune. Without iPhone exclusivity, AT&T’s management is now exposed. The company seems vulnerable to innovators on white spaces and 2.6 GHz. You can see them circling.
Related Dailywireless article include, AT&T Merger Officially Dead, AT&T Says 700 Mhz Expensive, AT&T LTE in NYC, AT&T and Verizon: No 700 MHz Interoperability For You!, Dish: Show Me the Money!, AT&T: Selling Assets for Merger Approval?, LTE: 6% By 2016, AT&T Merger in Trouble, Spectrum Drama: Made for TV, 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?, Clearwire Buyout Rumored , WiMAX to TD-LTE: Everybody’s Doin’ It, Speculation on Sprint Infrastructure, LG Telecom: CDMA & LTE Handover, LTE Spectrum: It’s War, MetroPCS Eyes TerreStar, FCC Okays Terrestrial LTE for SkyTerra, TerreStar Successfully Launched, AT&T/TerreStar Ready Satphone Service, TerreStar Phones Home
