AT&T threatens to walk away from FLO spectrum deal
Objects to possible conditions to ensure roaming in 700MHz, while LightSquared runs into more disputes
Published: 16 December, 2011
READ MORE: Spectrum | US | AT&T | Infrastructure | Regulator | LTE
The FCC remains caught between its stated aim of opening up new mobile broadband spectrum, and the complexities of keeping competition fair within those bands. Its attention has shifted from the stalled AT&T/T-Mobile merger bid to AT&T's other planned spectrum acquisition, of Qualcomm's 700MHz licences. The regulator is keen to impose conditions which would allow smaller players in the band to roam with AT&T's services but the carrier argues this would make the transaction uneconomic and even threatens to walk away from the deal. Meanwhile, LightSquared has come under further fire over claims that its proposed LTE network would interfere with GPS signals.
While its TMo bid now looks unlikely to succeed, AT&T is still on the hunt for new spectrum since it believes it will otherwise hit capacity on its LTE network around 2014. Verizon has made the same judgement, but has signed several deals, with the cable consortium SpectrumCo, Leap Wireless and most recently US Cellular, to bolster its position. AT&T's best fallback options are a potential sharing deal, falling short of acquisition, with TMo, and its proposed purchase of Qualcomm's former FLO TV spectrum.
However, this has run into another US spectrum controversy - the incompatibility of the different frequencies used by LTE carriers in the 700MHz band. Smaller rural operators have demanded that the FCC mandate the big two cellcos to support roaming with their services, and the regulator may impose restrictions on the Qualcomm spectrum to ease roaming and so allow the small players to access the same smartphones as the majors.
If it does this, AT&T is threatening the scrap the deal - though critics argue that, if it is as desperate for LTE spectrum as it claims (the main justification it offers for its TMo bid), it should not be so fussy about the conditions.
The situation is complicated because the FLO frequencies are in a separate part of the band from AT&T's existing holdings, so the cellco has been working with Qualcomm to use carrier aggregation techniques - which will be standardized in LTE-Advanced - to incorporate the spectrum into a new augmented downlink carrier. That would greatly enhance AT&T's download capacity, but it requires a wholly customized band plan, which would impact other 700MHz licensees.
Those operators, led by the Rural Cellular Association and regional providers Vulcan Wireless and C Spire, have been protesting this "boutique band plan" to the FCC, arguing it would force them to change their own LTE configurations to accommodate AT&T. They say this would lead to handset makers tailoring devices specifically for AT&T, which would be inaccessible to smaller rivals with less influence over the OEMs; while also worsening fragmentation and roaming problems. And they believe that all carriers in the lower 700MHz band would end up giving up a portion of their spectrum to accommodate AT&T's plans.
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