FCC's repacking effort may far exceed 39 months: Guggenheim

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Tower companies may not fully benefit from 600 MHz deployments as quickly as expected, Guggenheim said.

It may take much longer for wireless carriers to deploy services on their new 600 MHz spectrum than previously thought.

Bidders committed more than $19.63 billion for TV broadcasters’ airwaves during the FCC’s incentive auction, which ended last spring, with T-Mobile leading the way by spending $8 billion on 600 MHz licenses. Operators have repeatedly urged the agency to stick to the 39-month repacking plan it has allotted to reshuffle TV broadcasters’ airwaves for wireless use to avoid interference problems as the spectrum is redeployed.

But clearing those airwaves for wireless use may actually take twice that long, Robert Gutman of Guggenheim Equity Research wrote this week, citing a recent report from Inside Towers.

“As part of the 600 MHz auction, broadcasters have 39 months to move the antennas needed for the television channel repack. However, Vertical Technology Services (a Maryland provider of tower services) estimates that only 14 crews are qualified for the work,” Gutman said in a note to investors. “As such, Kevin Barber, CEO of Tower King II, believes the repack could take five to seven years. If this estimate is correct, it means the towers may not benefit from the rollout of 600 MHz in the immediate future.”

Of course, some of the new spectrum will be available for carriers much sooner. As Gutman noted, T-Mobile already lit up its first 600 MHz sites, launching service earlier this month in Cheyenne, Wyoming, and the carrier has vowed to bring supporting handsets to market by the end of the year.

But Gutman’s note reinforces claims by TV broadcasters and other critics who have consistently asserted that the 39-month time frame simply isn’t long enough. The National Association of Broadcasters earlier this year asked the FCC to reconsider its timeline, calling it a “flawed” schedule (PDF) that doesn’t give ample time to move to new channels.

Such claims have been disputed by carriers who—obviously—want to put their new licenses to use as quickly as possible.

T-Mobile has said it will continue to roll out 600 MHz spectrum later this year and beyond as it expands outside its base of metropolitan areas into smaller cities and rural markets. But a repacking delay could be particularly troublesome for Dish Network, which exceeded analysts’ expectations by spending $6.2 billion at auction to buy 486 licenses.

Dish already had a significant chunk of spectrum, of course, and it plans to use those licenses as well as its new airwaves to build a network serving the needs of the IoT. An unexpectedly lengthy repacking schedule could become a noteworthy speed bump for Dish as it looks to join the wireless market.