The PhoneBoy Blog

CTIA Against Spectrum Caps, Against Competition

09 Nov 2008

The latest post on the CTIA blog didn’t make a lot of sense. They were arguing against spectrum caps. Of course, they did nothing to directly explain what spectrum caps are and instead chose to use a bunch of flawed analogies to describe it.

In short, there is a fixed amount of spectrum available for wireless carriers to use to provide service. All carriers. In order to ensure there are enough carriers providing service to have some semblance of competition, there are caps on the amount of spectrum a single carrier can control.

The main reason this topic of spectrum caps is even coming up is because of the Verizon Wireless/Alltel merger, which was recently approved by all the government agencies. Of course, the merger is without some conditions, one being that Verizon has to give up spectrum in over 100 markets in order to comply with spectrum caps. Makes me wonder who the CTIA is really representing here.

The first analogy the CTIA tries to draw is that the spectrum caps are a bit like “setting a computer cap based on a 1992 computer’s specs – it would be like adopting a cap of 4 MB RAM and a 40 MB hard-drive and saying that no new applications can be written requiring more than that.” Some pretty innovative computing came out of those dark ages. Sure, it requires a bit more work, but it’s possible.

The second analogy: it’s like saying no highway should be more than two lanes. Unlike a road, where cars are generally a fixed size, one can always make more efficient use of spectrum. Look at the 802.11 WiFi. The original 802.11 specification–that predates b, g or n–was 2mb/s. The current draft 802.11n can go 300mb/s. The same can be said of the mobile phone networks themselves. AMPS–the old analog spectrum–required a lot of spectrum, CDMA and GSM use spectrum more efficiently.

The final analogy they use: spectrum caps are a bit like “restricting the number of coffee shops a company could have in a given city.” This is somewhat true, but keep in mind that there is a limited, fixed amount of spectrum available for *all *carriers to use. What the spectrum caps do is ensure that no one carrier controls too much of the spectrum to allow multiple carriers to exist, i.e. not all coffee shops are Starbucks.

Let’s take the CTIA’s position on spectrum caps to its foregone conclusion: without any spectrum caps, a single carrier could conceivably control all of the spectrum in a given market. Given there is only a fixed amount of spectrum available for mobile telephony, spectrum caps ensure it is possible for multiple providers to provide service in any given area. So how is lifting the spectrum caps helping competition exactly?

I will agree this is not the most optimal solution, but while I tend to think universal service is important, I think that mandate can be filled without lifting the spectrum caps,thus preserving competition. What do you think?