DVB-H May Not Be Dead Yet
DVB-H May Not Be Dead Yet 
Yesterday's announcement that AT&T had agreed to purchase $2.5 billion in 700 MHz spectrum from privately-held Aloha Partners, parent firm of DVB-H proponent Hiwire, seemed to signal the end of DVB-H in the United States. Hiwire was the only remaining U.S. DVB-H player after Crown Castle International announced earlier this year that it was planning to spin off its Modeo business and exit the market. Hiwire was planning to use that 700 MHz spectrum to deploy a nationwide mobile TV network and this summer it launched a DVB-H trial in Las Vegas with partner T-Mobile USA.
But AT&T didn't just buy the 700 MHz spectrum from Aloha, it also purchased the Hiwire assets. I spoke with Scott Wills, president and COO of Hiwire, this morning and he said that those assets include the tower sites and the infrastructure equipment as well as access to the entire DVB-H ecosystem. He added that the current DVB-H trial in Las Vegas with T-Mobile USA will continue through the end of the year.
Wills wouldn't comment on the implications of this deal and AT&T has said that it's not sure how it will use the spectrum. But I think it's entirely possible that the operator will use that spectrum to deploy a DVB-H network and launch its own mobile TV service.
I know that AT&T is currently working with Qualcomm's MediaFLO subsidiary to launch a mobile broadcast TV service this year, but I've always felt that the alliance between those two parties was made because AT&T felt pressure from Verizon's broadcast TV offering (using MediaFLO) and the company felt the existing DVB-H players (Medio and Hiwire) were not progressing as quickly as AT&T desired.
But there's nothing stopping AT&T from using MediaFLO technology as a stopgap measure until the company can deploy its own DVB-H network using the spectrum it just purchased from Aloha.
I think there are some very compelling reasons for this strategy. AT&T could deploy a DVB-H network, offer more channels of programming than Verizon (Hiwire can offer 24 channels of programming while MediaFLO can offer just eight) and negotiate some interesting content deals that provide customers with programming whether it's over AT&T's U-Verse IPTV system, over AT&T's broadband network or over its DVB-H network. Doesn't this scenario fit with AT&T's three-screen philosophy? I think it does. -Sue
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Comments
By Anonymous | Posted 2:13pm | October 10, 2007
This spin is ridiculous. There's no way a mobile TV business plan can justify paying $2.5B for the spectrum. Remember this is a paired band, unlike the unpaired MediaFLO allocation, making it far more valuable for cellular voice and data services. Whether or not AT&T picks up a few tens of millions of dollars of equipment is irrelevant.
By Sue | Posted 3:00pm | October 10, 2007
Its not spin, it's my opinion. While you make a good point about the unlikelihood of AT&T spending that much money on spectrum for a mobile TV service, I'd argue that we've seen other companies spend lots of money on spectrum for services that seemed even more frivolous. Remember how respected players like Microsoft, Craig McCaw and others invested millions on spectrum to build a commercial satellite contellation called Teledesic?
By Anonymous | Posted 4:02pm | October 10, 2007
Very interesting move by AT&T @ ~ $1/MHz/pop (I actually have been
wondering why the big guys haven't bought Aloha out yet) and a nice ROI
for Aloha (I think they spent something like $100M or so). I highly doubt that this acquistion was about mobile broadcast given the hefty bill of $2.5B. This acquisition by AT&T is about the next gen technology (LTE?) and where it would be built. It may suggest the following:
1. Limit the new entrants (who might purchase some markets at the upcoming 700 MHz
auction and complement it later by acquiring Aloha's assets for a national
play). The next auction could become the play of the titans only
2. Buy now and complete a national footprint at the auction (by picking up
some regional licenses at the auction ). Please note that Aloha's territories is mostly
East and West (prime real estate)
3. The next auction is limited in spectrum and fragmented with all the
FCC rules (you can't do much with one 6 MHz paired channel!!). AT&T
could very well be creating a credible play of the 700 MHz band by
acquiring now and bidding aggressively in the auction and amass adequate
spectrum (multiple channels) for a meaningful launch in the 700 MHz band of its next gen technology
By Anonymous | Posted 3:37pm | October 11, 2007
I know its not your spin - its Aloha's spin I'm referring to - trying to deflect the inevitable charges of spectrum flipping and/or that their business plan was nonsense.
Are you arguing that AT&T is deliberately overpaying for the spectrum with the intention of using it for mobile TV when they know the business plan won't justify $2.5B? If they wanted to be in the mobile TV business then I bet Qualcomm would sell MediaFLO to them for a lot less than $2.5B.
BTW I worked on Teledesic, and you should understand that the spectrum was free, and McCaw only spent $100M finding out it was not going to work as a business. Much better than Iridium and Globalstar spending $10B between them to discover a similar result (again using free spectrum).
There have only been a few instances where people have overpaid for spectrum based on "frivolous" business plans (e.g. LMDS in the late 1990s) and those collapsed pretty quickly once the technological limitations became clear.
By Lynnette Luna | Posted 3:47pm | October 11, 2007
I disagree that Aloha is spectrum flipping. I have talked to them over the years. They sought a waiver and received it from the FCC in 2004/2005 to do a trial of Flash-OFDM in Tucson. The problem was operating in this spectrum that was ridden with analog TV interference. The commission's rules prohibited Aloha from operating in Tucson and other markets because an analog broadcast station uses the adjacent UHF channels and there was no clear date as to when broadcasters would leave. Aloha sought a waiver to prove that its network wouldn't interfere with the broadcasts because of its low-power nature. It's plan then was to partner with the public-safety community. Then came the promise of mobile TV and the inevitable hype surrounding it so Aloha saw a better market for that. It thought it could successfully compete with Qualcomm, but who knew that operators historically aligned with the GSM community, like AT&T, would go with MediaFLO? They bought the spectrum cheap enough to experiment.--Lynnette
By Anonymous | Posted 10:12pm | October 11, 2007
Is it part of your opinion that AT&T would spend 2.5 million in a first step toward compete with Qualcomm who spent 800 million to build it's entire Media Flow network?
By Anonymous | Posted 6:02pm | December 7, 2007
The reason why MediaFLO currently offers just eight channels is not because of capacity limitation (the article seems to imply so). Rather, it is because of content availability. The MediaFLO trial by BSkyB in UK showed MediaFLO has twice as much capacity as DVB-H (see the joint press release by BSkyB and Qualcomm). The author could have done more homework before commenting.
By Amitabh Kumar | Posted 9:36am | February 5, 2008
Saying that FLO has twice as much capacity as DVB-H is perhaps not the best way to describe advantages of MediaFLO.If that was the case, Europe and Asia would not have adopted DVB-H as a standard. However it is true that Media FLO requires fewer transmitters, can support layer videocoding to support best picture quality based on transmission speeds and higher frame rates in certain transmission condition. However DVB-H performs very well in non-LOS conditions common in city environment and can ride on digital TV networks ( DVB-T) as an additional service.
DVB-H also has the largest number of handsets and its potrfolio has been strengthended by the recent launch of DVB-SH services( satellite based with terrestrial repeaters).
Hence DVB-H is no pushover.
However it may be quite true that DVB-H was completely out of place in the US as it does not have a DVB-T network like Europe.
MediaFLO is better placed for now and perhaps ATSC-Mobile pedestrian handheld in the near future.
But the dark horse is the mobile WiMAX based services, once they begin.Watch out for these.
More information http://www.mobiletvhome.com/
http://www.wimax-tv.info/