Year in review 2012: Spectrum battles force change in industry and FCC

The news: Increasing the amount of spectrum for mobile broadband has been at the forefront of the FCC's agenda for years now. Wireless carriers are constantly clamoring for more spectrum. And in 2012 decisions about spectrum policy helped drive deals and alter the mobile landscape in the United States.

Spectrum appeared to drive many of the biggest deals of the year:

• Verizon Wireless' (NYSE:VZ) $3.9 billion purchase of 20 MHz of nationwide AWS spectrum from a group of cable companies was the biggest of the year (the deal was announced in December 2011 and approved in August after much wrangling).
• AT&T Mobility (NYSE:T) acquired WCS and AWS spectrum from NextWave Wireless, Comcast, Horizon Wi-Com and others, and said it will use the radio waves to add capacity to its LTE network, which primarily runs in its 700 MHz spectrum. 
• Sprint Nextel's (NYSE:S) deal for Clearwire (NASDAQ:CLWR) is basically all about getting access to more spectrum, as is T-Mobile USA's deal for MetroPCS (NYSE:PCS).
• There were also a number of smaller spectrum deals, like U.S. Cellular's (NYSE:USM) decision to sell some of its major Midwestern markets and spectrum to Sprint for $480 million.

In between all of the wheeling and dealing, the FCC made important strides on spectrum policy. The commission started to set rules for the voluntary incentive auctions of broadcast TV spectrum; it voted to begin a review of its rules for how much spectrum a carrier should be able to hold; it turned Dish's 40 MHz of satellite spectrum into terrestrial radio waves; and it gave T-Mobile permission to test the concept of sharing spectrum between federal and commercial users in the 1755-1780 MHz band.

All of the action gave FCC Chairman Julius Genachowski the confidence to say the agency is on track to exceed its goal of freeing up 300 MHz of spectrum for wireless use by 2015.

Why it was significant: The cliché intoned at wireless trade shows is that spectrum is the "lifeblood of the industry." It's a truism but it's true--without wireless spectrum carriers can't deliver the services that they do. Some have argued that the "spectrum crunch" and all of the attendant hand-wringing about it is overblown. The FCC and the CTIA do not see it that way, and they have been doing everything they can to get more spectrum to the market.

Whatever one thinks of the spectrum crunch, wireless carriers showed this year that they are willing to go to great lengths--financial and regulatory--to get access to more radio waves. All of the major deals announced this year have spectrum considerations at their heart. It shows that the carriers want to get as much spectrum in their hands as they can now, rather than waiting for the government to unleash more. Spectrum drove deals in 2012 perhaps more than ever before.