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Citigroup questions if US spectrum shortage exists

Grant Gross | Oct. 3, 2011
For more than two years, the U.S. mobile industry has warned of an upcoming spectrum shortage, but two analysts at Citigroup don't buy it.

CTIA officials disputed the Citigroup report's numbers, saying Bazinet and Rollins appear to be using information from 2010. More spectrum has gone into service this year, CTIA said, with Verizon Wireless, for example, launching 4G service on the 700 MHz band of spectrum to more than half the country since late 2010. Verizon won 22 MHz of spectrum in the C block of the 700 MHz band in an FCC auction that ended in early 2008.

The report uses numbers that are foreign to CTIA, said Chris Guttman-McCabe, the trade group's vice president for regulatory affairs. "I dispute each of the elements of it," he said. "Where did they get the 500 MHz, and where did they get the 190? I would dispute each of their numbers."

Guttman-McCabe questioned why the report included LightSquared spectrum, when it is tied up in regulatory limbo. He also disputed Citigroup's description of 194 MHz available in the Broadband Radio Service (BRS) and Educational Broadband Service (EBS) bands between 2.4 and 2.7 GHz, when an FCC decision in 2008 found only 55.5 MHz available for mobile broadband in those bands.

The U.S. mobile carriers use their spectrum more efficiently than carriers in any other nation, CTIA officials said, yet several other developed nations are in the process of making more spectrum available, or are looking for more spectrum.

"Every other country out there is bringing hundreds and hundreds of megahertz to market," Guttman-McCabe said. "What's the magic secret in the sauce that Citigroup knows that no one else does?"

Rollins defended the report's methodology. He and Bazinet started with 2010 numbers, but updated them, he said. The two used averages to come up with spectrum use estimates; if a carrier has a 10 MHz nationwide block, but is only delivering service to half the U.S. population, the report considers that 5 MHz of used spectrum, Rollins said.

The numbers are based on ongoing research, including discussions with carriers and information from the FCC, Rollins said. Citigroup did not give an explanation of the BRS and EBS numbers it used in the report.

CTIA also questioned why the National Association of Broadcasters sent the report to journalists. The NAB has concerns about an FCC plan to take back 120 MHz of spectrum from U.S. TV stations, with the stations that volunteer to give up spectrum sharing in the auction proceeds. The NAB pointed to the Citigroup report as evidence the broadcast spectrum isn't needed.

But the report reaches its conclusion about spectrum needs based in part on the FCC's plan to make available 300 MHz of "high-value" spectrum for mobile broadband, including 120 MHz from TV stations, over the next 10 years. The FCC's national broadband plan, released in early 2010, calls for a total of 500 MHz to be made available in 10 years, with 300 MHz suitable for mobile broadband.


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