High spectrum prices force wireless carriers to invest in pico-cells

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in internet on (#6NQB)
Verizon Wireless said there are a handful of areas in which it had hoped to increase its spectrum holdings, but will instead use small (or pico) cells to increase frequency reuse on the network rather than simply using a larger block of spectrum. "We simply have to adjust our plans in certain places where we may have anticipated spectrum." New York and Boston are two markets in which Verizon Wireless did not acquire additional 1.7/2.1 GHz spectrum in the recent auction. Their budget for this year now includes an incremental $500 million for this kind of network densification.

Melone added that as the cost of spectrum has risen, the cost of small cell technologies has been going down. "The comparison between the two changed dramatically," he said. Verizon also highlighted the improving economics of fiber as one of the reasons that small cells are becoming a more attractive investment.

This seems to support the FCC's decades-old policy of using auctions as the most efficient way to allocate spectrum resources where they are most needed, in a simply supply & demand model. Never mind the substantial new source of income the US federal government has seen from the process.
Reply 2 comments

Why the government funding snark? (Score: 1)

by billshooterofbul@pipedot.org on 2015-04-09 19:29 (#6QZV)

Wireless spectrum assignment can only be done by the government, for the betterment of the people in the country. The government should be well compensated for that limited resource and should apply those funds for the betterment of the people who own that spectrum and allow it to be put to private use. I don't know how insanely libertarian you have to be to think that there isn't a single governmental function that should exist and be funded with these fees. Defense? Border Security? Science Research Funding? Lowering price of admission for the Smithsonian? Library of Congress? Space Travel? Reduced Taxes on individuals? Surely, there must be something that you think the government should do, and maybe these fees can fund that?

We can disagree on how these fees should be spent, but surely they can be put to a good use for all of us.

Re: Why the government funding snark? (Score: 1)

by evilviper@pipedot.org on 2015-04-09 19:46 (#6R0N)

No snark was intended. I was even thinking about mentioning how auctions funded the HDTV converter box rebates, but opted not to make it any longer.

But your reply suggests there's no alternative to auctioning spectrum, which isn't true at all. Instead, meritocratically assigning it (as is done with TV, radio, public safety, etc.) without any money changing hands, could be just as effective a way to utilize the available spectrum. After all, it's not money pulled from thin-air, but money the public will have to pay for (in service fees) in the end. And the rules and restriction the FCC puts on the spectrum auctions, in addition to the price, is similarly because pure capitalism doesn't result in ideal distribution of these resources.

While I didn't intend to go down this road, let's not forget that the incentive auctions are a pretty bald-faced money-grab, selling off highly useful broadcast TV spectrum, causes changes which are likely to cost consumers many millions of dollars (to replace existing TV antennas) and will certainly reduce media diversity, local news sources, etc., etc., and disproportionately affecting the poor and minorities.