Verizon Wireless (NYSE:VZ) and Dish Network (NASDAQ: DISH) are battling over whether the forthcoming auction of AWS-3 spectrum should include rules that require interoperability with Dish's AWS-4 airwaves.
The debate comes on the eve of an FCC vote on spectrum licensing rules for the AWS-3 auction. Verizon argues that there has not been enough time to study whether an interoperability requirement is feasible, while Dish argues such a requirement would allow it to deploy its spectrum more easily and enhance its desire to bid for AWS-3 spectrum.
The FCC will vote on the rules for the AWS-3 auction during its March 31 open meeting. The FCC is proposing to auction the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands, collectively known as AWS-3.
Dish's 40 MHz of AWS-4 spectrum specifically runs from 2000-2020 MHz (for the uplink) and 2180-2200 MHz (for the downlink). Dish asked the FCC to let it use the 2000-2020 MHz band for downlink operations instead of uplink as a condition for agreeing to bid the reserve price in the 1900 MHz PCS H Block auction, which it won by bidding the minimum reserve price of $1.56 billion.
An interoperability mandate with Dish's spectrum would certainly benefit Dish and potential Dish customers, since Dish would get greater economies of scale from a wider AWS device ecosystem. However, it's unclear if the FCC will take up Dish's proposal or shelve it.
In a March 14 filing with the FCC, Dish noted that there is "broad support for interoperability across the AWS-1 and AWS-3 bands (downlink at 2155-2180 MHz, uplink at 1755-1780 MHz) for new networks. Given the rapidly increasing consumer demand for high-bandwidth, high-speed data consumption, wider swaths of contiguous downlink spectrum or the ability to aggregate across carriers are desirable. For this reason, existing carriers, particularly those with existing AWS-1 licenses, view the upcoming auction of AWS-3 spectrum as a key opportunity to add capacity to their networks."
Then, however, Dish pushed for a requirement that would make interoperability extend to its own spectrum. The company noted that it "has a nationwide footprint at 2180-2200 MHz, which is the foundation of its plans to launch a competitive mobile broadband network. But an important step to Dish's success in offering a viable consumer offering is getting its licensed spectrum bands into the mobile devices that consumers use. A regulatory requirement that 2180-2200 MHz be a part a 90 MHz downlink ecosystem helps ensure that the AWS-4 band can be utilized fully and efficiently in the mobile broadband market."
Further, Dish wrote that its "interest in bidding in the auction would be greatly enhanced by the certainty of interoperability. This is because without an interoperability requirement (which includes 2180-2200 MHz), the AWS-4 downlink could not be carrier-aggregated with the AWS- 3 band." Dish wrote that "a device could support the AWS-1, AWS-3, and AWS-4 downlink bands with a single filter, a critical component enabling device interoperability."
In a March 19 filing, Verizon shot back that "the first substantive filing setting forth an AW S 1/3/4 proposal was on March 14, 2014, just two weeks before the FCC is expected to adopt service rules for the AWS-3 band and just one week before the sunshine deadline." As a result, Verizon thinks "the parties to this proceeding have not had a meaningful opportunity to evaluate this proposal from a technical or other perspective or to address the proposal from a substantive standpoint."
Additionally, Verizon noted "the 3GPP standards work that is already underway to develop a single AWS-1/3 band class. Adding AWS-4 downlink spectrum could slow this work, resulting in delayed AWS-3 deployment and device availability." Verizon also wrote that "that there may be other technical limitations that could prevent or delay the development of a band class that includes AWS-1, AWS-3, and AWS-4 downlinks."
Dish issued its own retort to Verizon on March 20, and wrote that there is "no work that is 'already underway' to develop a band class encompassing AWS-1 and AWS-3 spectrum."
Dish also noted that "its specific interoperability proposal was made towards the end of the AWS-3 proceeding. However, the general concept of interoperability has been discussed in the record at length as it relates to combining the AWS-1 and AWS-3 bands," and that the FCC "discussed in detail the efficiencies of combining adjacent spectrum with AWS-3 in the AWS-3 NPRM. The record thus already reflects support for combining a legacy band with a newly auctioned band, and the addition of 20 MHz of AWS-4 is a logical outgrowth of that concept."
Chiming in, AT&T (NYSE:T) took Verizon's side in the dispute. In a March 20 filing it wrote that the "3GPP is the correct forum for the industry to work through the complicated questions around how to define and implement new spectrum bands. The business of 3GPP is conducted by knowledgeable engineers from all aspects of the industry--including in recent years the FCC--and that is the proper venue for identifying and resolving through the complex questions associated with spectrum implementation. An 11th hour ex parte on an item headed for a vote with no notice or comment is decidedly NOT the proper approach for managing these issues."
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