Wireless bandwidth: Are we running out of room?

As mobile devices proliferate, wireless networks are edging near capacity -- a potential threat to price, performance, and innovation.

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Playing nice -- or not so nice

Other experts -- including some IT executives -- opine that we've encountered spectrum and wireless issues like this before, and sanity has, eventually, prevailed (remember the days before roaming agreements, or the brouhaha over wireless garage door openers?).

But coming to agreement on a workable solution may not be so easy this time around.

The wireless spectrum is spoken for, which means carriers must either do more with what they have -- which would require a costly build-out (as much as $40 billion to double capacity) of cell towers and base stations -- or find bandwidth elsewhere. That "elsewhere" is primarily in the broadcast bandwidth, but broadcasters, unsurprisingly, aren't interested in giving up spectrum that they've controlled for decades.

"Installing base stations is expensive," explains Phil Solis, research director for mobile networks at ABI Research. "Carriers [instead] fight for spectrum, because that's a cheaper way to add capacity. But by getting spectrum, you reduce the chance of new competitors."

At a CQ Roll Call panel called Finite Spectrum, Infinite Demand held in Washington, D.C., last November, Harold Feld noted, "There's a culture of confrontation, not cooperation, around spectrum. We have to come up with ways to approach the issue in a more collaborative fashion." Feld is director of public affairs for Public Knowledge, a nonprofit focusing on Internet openness.

That isn't happening. Charles Golvin, principal analyst for Forrester Research, says, "It doesn't matter if Mother Teresa makes the request. If you're used to something, and someone tries to take it away, you're going to object."

So what is happening? Here's a look at the players, their perspectives, and recent dealings.

Carriers. Carriers like AT&T and Verizon are in a tough position. On the one hand, they want to entice customers with new services and download speeds. But to do that, they need spectrum. AT&T wanted to acquire T-Mobile not for its customers, but for its spectrum. That's also why it spent $1.9 billion in December 2011 to acquire spectrum from Qualcomm, and why it's rumored to be buying Dish Network.

Ditto for Verizon. Also in December, it paid $3.6 billion for mobile spectrum licenses from SpectrumCo, a joint venture of three cable providers, and paid Cox $315 million for spectrum in another deal. (And don't forget rural carriers: they have a separate set of complaints about too much consolidation of spectrum in the hands of the large carriers.)

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