While we are always amused when big corporations take public whacks at each other, we wonder if Verizon might not find itself with an iPhone-like network capacity problem when it comes time to move to 4G. Though Verizon’s pretty cocky about how well its network works now, sounds of spectrum-crisis alarms are starting to be heard around the telecomosphere, with much smarter minds than ours saying it’s already past time to find more wireless spectrum for our near-term future.
By great chance, a breakfast meeting this past spring here in Silicon Valley with Blair Levin — then just a humble Wall Street telecom analyst, now the man in charge of the FCC’s forthcoming national broadband plan — turned into a summit of more minds, when Gary Shapiro, president and CEO of the Consumer Electronics Association (CEA), joined our table for scrambled eggs and policy confabbing.
Though the talk then was mostly polite disagreement about how to best get the country’s telecom situation moving forward, it is interesting to now see these across-the-political-aisle types finding common ground around the idea that the government needs to find more spectrum, fast, so that our digital broadband-based marketplace can help lead the nation’s economic recovery.
Here’s a snippet from one of Blair’s recent takes, from a post on the FCC’s national plan blog, where he hilariously compares the current U.S. spectrum assets to the height-challenged former NFL quarterback, Doug Flutie, whose career suffered in part because he had a hard time seeing over the heads of his blockers and rushers:
Spectrum is like height. If you don’t have it, it’s pretty hard to be in the big leagues. As they say, you can’t coach height. Now it’s not an exact analogy. Technology and other capital inputs can help overcome the lack of spectrum. But let’s not kid ourselves. Lack of spectrum will mean that our mobile service will be more expensive and of a poorer quality than if we had more of it. And that’s very bad news unless we figure out a way to solve that problem.
They will never come out and say it publicly — they just don’t roll that way — but when AT&T and Verizon look at their current 700 MHz spectrum assets for their 4G wireless plans (based on Long Term Evolution, or LTE technology), they might be seeing something fairly Flutie-like: Maybe good enough looking in a uniform and helmet, but unsatisfying for a team that wants to win championships. But even as the telco giants deny and bluster about the shape their networks are in, the folks who want to sell devices that use those networks — aka Shapiro’s collective industry group — are so concerned that they are already funding their own studies to find spectrum they think the FCC should repurpose, for wireless broadband use.
From a recent press release/letter to the FCC put out by the CEA, Shapiro said in part:
We are currently facing a crisis in wireless high-speed broadband availability. We encourage the Commission to immediately begin an inventory of spectrum usage. At the same time, it is important to begin developing a model for determining how to identify and reallocate spectrum.
To be sure, this is a political battle that is only just beginning — and at its core are some pretty interesting facets, like the current proposed Senate bill asking for a full and complete inventory of current wireless spectrum (Does it surprise you that our government doesn’t exactly know who is using all our public airwaves, and how? And that a law needs to be passed to force telecom service providers into providing such information?). There’s also the idea of broadcasters joining the fray, as wireless providers and device makers grab for spectrum — oh to be a billable-hours lawyer in the telecom world!
For real people, the worry is that the big telcos — namely AT&T and Verizon — will proceed forward with their nothing’s wrong attitude, giving us all more iPhone network headaches down the line. Until the forthcoming networks actually launch and start serving customers, it’s going to be hard to predict if they will fail a la the iPhone. But if smart folks like Levin and Shapiro are already sounding alarms, maybe it’s time to ask more hard questions beforehand.
Some industry observers, like Boingo CEO Dave Hagan, are already ringing the warning bells, specifically around the big carriers’ plans for LTE being some kind of wireless-data nirvana. And Dave’s got a quote so nice I’m going to use it twice, from my recap of a panel discussion he was on last week at the Open Mobile Summit:
“LTE does not solve the iPhone problem,” said Boingo Wireless Inc. CEO Dave Hagan, speaking on a panel at the conference Wednesday. While LTE might provide throughput four times greater than current 3G implementations, Hagan said the incredible jump in demand generated by devices like the iPhone will trump such low-shooting improvements. “They are chasing a 50x increase [in data consumption] with a 4x solution, a 4x solution that’s going to take four years to complete,” Hagan said. “That’s not going to work.”
As I sat there last week listening to AT&T CTO John Donovan talk about unprecedented leaps in data usage — and linked that thought to Verizon getting its hands on the iPhone as well as the rumored Apple Tablet — I’m reminded that big telco execs have told us before that they have the problem under control. I think this snippet of a conversation between my pal Om and AT&T’s Ralph de la Vega (from June of 2008) should be put on some kind of endless loop, just for fun:
OM: Ralph, as I wrote earlier today, I think the biggest concern is the ability of AT&T to handle the 3G network traffic that would emanate as people start using this new 3G iPhone. What are your thoughts?
RDLV: We have tried to model the usage of the new phone and prepared the network accordingly. We have taken our 2G iPhone usage data and we feel extremely comfortable to be able to deal with the demand. We have a maximum throughput of 3.6 Mbps and soon it will be 20 Mbps. The core of the network is going to run faster as well.
“We feel extremely comfortable to be able to deal with the demand.” How well is that going, iPhone users? And how does it make you feel about the 4G future from the big providers?