Report argues for interoperability in broadband spectrum bands

Interoperability among wireless carriers in the sub-1 GHz spectrum band could enable the U.S. government to earn as much as $3.5 billion more in upcoming spectrum auctions than if interoperability is not mandated, argues a report issued by Information Age Economics.

The report, titled “Non-Interoperability at 700 MHz: Lower Revenues & Higher Prices,” was sponsored by the Rural Cellular Association. It offers harsh criticism for AT&T and Verizon, arguing that those companies have introduced 700 MHz services based on non-interoperability that “increase their market power in the U.S. at the expense of all other service providers and stakeholders.” Without an interoperability mandate, the report authors argue that many potential bidders will not bid in future 700 MHz auctions because they will be “discouraged by the prospect that they may not be able to acquire competitive devices, in terms of cost and performance, in a timely manner because component and device vendors will understandably focus their limited development resources on the larger business opportunities and profits offered by the Big Two.” Already device manufacturers focus on the Big Two in designing 700 MHz devices--and the report authors note that 700 MHz spectrum won by operators other than the Big Two in recent auctions has been “forced to remain unused for a much longer period than is desirable to the detriment of the U.S. economy, small and medium sized wireless operators and their customers.” The report authors argue that the Big Two are using potential interference concerns as an excuse for not supporting an interoperable approach to the 700 MHz band but that those concerns are unjustified.