FCC Promoted AT&T/Sirius Agreement on WCS Spectrum
FCC officials played a hand behind the scenes in promoting an agreement between AT&T and Sirius XM on the future of the Wireless Communications Services band (CD June 19 p1), agency officials confirmed Tuesday. The deal could be a game changer for AT&T on several levels, industry observers said. The carrier’s proposal to buy T-Mobile and its AWS and other spectrum fell flat last year. With few options on the immediate horizon, WCS could help AT&T meet its short-term needs. AT&T filed an ex parte on a meeting with FCC officials March 29, where they discussed the WCS band with Wireless Bureau Chief Rick Kaplan, Office of Engineering and Technology Chief Julius Knapp and others (http://xrl.us/bnb9qo). Sirius also reported on discussions with the agency in the same time frame (http://xrl.us/bnb9q4).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
"If AT&T wins FCC approval and is able to acquire certain other WCS licenses, it could deploy LTE in the 2.3 GHz band,” Guggenheim Securities analyst Paul Gallant wrote investors. “Since AT&T already owns a significant portion of the WCS spectrum around the country, it would only need to purchase the WCS spectrum it doesn’t own to obtain nationwide coverage (as opposed to purchasing or leasing entirely new capacity from other carriers).” The development could be a “setback” for Dish and Clearwire, since AT&T would have less need to lease spectrum, Gallant said. He’s “cautiously positive” the FCC will sign off on the AT&T/Sirius proposal. At CTIA last month, FCC Chairman Julius Genachowski said the agency is “taking a very close look” at WCS and “preparing for action in the coming months,” Gallant noted. “This FCC has previously used joint proposals from stakeholders as the basis for resolving controversial issues."
"The AT&T-Sirius XM joint proposal on the 2.3 GHz WCS band is significant and noteworthy on a couple of levels,” said Jeff Silva, analyst at Medley Global Advisors. “First and most obvious, federal regulatory approval of the proffer would provide AT&T additional spectrum to deploy LTE services in a spectrum-constrained environment where wireless data/video demand is projected to continue skyrocketing in coming years. Perhaps less appreciated but arguably as important as an industry matter is that the give-and-take process leading to a meeting of the minds by AT&T and Sirius XM may well represent a rough version of the model by which spectrum is freed up in the future as spectrum scarcity by necessity forces precisely this kind of negotiated solution to exclusive/shared operational rights on commercial and government frequencies.”
Free Press is cautiously optimistic about the agreement, said Policy Director Matt Wood. “Anytime that a carrier like AT&T can take spectrum it already controls off the warehouse shelf and put it to good use, that’s probably a good thing, but not necessarily a game-changer in this instance,” he said. “This is what carriers should be doing anyway: Aggressively working to deploy and re-farm their current holdings, and making investments to upgrade their networks and improve their efficiency -- not fibbing to the FCC about their dire need for mergers and acquisitions of every single spectrum block.” The compromise “could be good news for that band, depending on how much the deal benefits AT&T and other licensees not yet part of the conversation,” Wood said. “But what it really demonstrates yet again is that the spectrum crisis meme is wildly overstated and overused."
The development is positive and not just for AT&T, said Harold Feld, senior vice president at Public Knowledge. “Sprint may ultimately benefit as well, since they hold a bunch of licenses in the deep South. ... AT&T will need to put a lot of work into developing new equipment and standards, since no one anywhere is deployed in this space. I'd say it gives AT&T assurance that it has more spectrum in the pipeline without the pain of re-farming.” But the deal also shows the “reality that for just about everyone (with the probable exception of Verizon Wireless), 4G LTE is going to be a messy, multi-band affair. AT&T is going to need to make its lower 700 MHz B footprint work with its WCS footprint while refarming its current 2G spectrum.”