Light Reading

Rural Telcos Urged Into 600MHz Auction

Carol Wilson
5/14/2014
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NEW ORLEANS — Metaswitch Forum 2014 — Rural telcos have their best chance to get into the wireless game in the upcoming FCC auction of 600MHz spectrum, assuming the rules stay as currently laid out, says the head of the largest association of rural companies.

Shirley Bloomfield, CEO of the NTCA - The Rural Broadband Association , today called this latest spectrum block "the last bit of beachfront property" and urged rural telcos to participate in the upcoming Federal Communications Commission (FCC) auction. The current proposal, which has proven controversial, limits what AT&T and Verizon can buy and creates smaller markets, opening the door for rural telcos to buy spectrum that covers their footprint without being forced to buy a large block. (See FCC Chief: Keep Spectrum Open for Smaller Carriers.)

"This is one last shot at having wireless spectrum," Bloomfield said in a keynote here. "If the rules stay as they are currently drafted, this is a favorable situation for smaller carriers.

NTCA CEO Shirley Bloomfield

In a conversation after her presentation, she said FCC Chairman Tom Wheeler's proposal -- which prompted AT&T to threaten not to participate in the auction at all -- has earned kudos among smaller telcos and wireless carriers. Now they need to step up and participate in the auction, Bloomfield said, to insure that broadcasters relinquish the spectrum.

Wheeler is also open to discussing other issues rural wireless operators have faced, including lack of access to the most popular handsets and roaming problems, Bloomfield said.

The NTCA is also actively engaged with federal regulators where its transition to the all-IP network is concerned. More than half of its members have already deployed softswitches in the move to IP, and more than 75% have deployed fiber-to-the-home somewhere in their networks, she said.

Her association is looking at the overlap between where its members are actively engaged in the IP transition and where there is an electric utility that has also responded to the FCC's request for information, hoping to see where partnerships can be built between the two local companies' phone and power.

In general, rural telcos (that have taken their knocks in recent years with the loss of Universal Service funding and some complex formulas for future funding) are working hard to stay at the table and in the conversation where the FCC is concerned, and finding Wheeler to be a reasonable person with whom to deal, Bloomfield added.

— Carol Wilson, Editor-at-Large, Light Reading

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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/17/2014 | 4:30:01 PM
Re: Hard to imagine
Makes sense. For a big business, buying retail doesn't work; they have to buy in bulk. They don't buy one box of paperclips at a time; they buy 'em by the truckload. 
sam masud
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sam masud,
User Rank: Light Sabre
5/16/2014 | 3:55:03 PM
Like Canada
Carol,

As I recall Canada also reserved spectrum for smaller players during its own AWS auction a few years ago. But I am sure there are differences when it comes to the details on how Canada handled it and the way FCC is going about it.

 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
5/15/2014 | 4:34:38 PM
Re: Hard to imagine
It's not the spectrum itself, it's the way the FCC is choosing to run the auction. As it was explained to me, it's being sold off in smaller market sizes, so a rural company serving eastern Tennessee doesn't have to buy the spectrum for the entire state, they can buy the spectrum for a smaller portion, making it less expensive and more palatable for them to purchase. 

AT&T and Verizon, as the two companies owning the biggest chunk of the highest value spectrum already, are being limited in what they can purchase, so it may be harder for them to build the business case around adding spectrum at 600 MHz. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/15/2014 | 2:05:30 PM
Re: Hard to imagine
If the 600 MHz footprint doesn't make sense for AT&T, perhaps other carriers would have difficulty making it work too. 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
5/14/2014 | 9:09:47 PM
Re: Hard to imagine
AT&T is arguing that the FCC's restrictions would limit the bandwidth they could get from the auction and leave them with "a fragmented and inefficient 600 MHz footprint" nthat doesn't make business sense. 

It does seem hard to believe that AT&T would sit out any spectrum auction, given the value of that limited resource but if carving up the auction into a lot of smaller pieces and limiting where AT&T and Verizon can bid makes the bandwidth so inefficient it's essentially unusable, they might follow through.

I suspect the threats at this stage are an effort to pressure Wheeler to back down. A lot of people will be watching to see if it works. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/14/2014 | 8:10:29 PM
Hard to imagine
Hard to imagine AT&T following through on its threat to boycott the auction. The competitive upside is too great. 
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