Both Verizon Wireless and AT&T won
enough spectrum licenses in the U.S. government's 700MHz auction concluded
last month to roll out services a cut above what they offer today, though how
fast they are for subscribers will be up to the carriers.

Both service providers will use the frequencies, at least in part, for LTE
(Long-Term Evolution), an emerging mobile broadband technology sponsored by
the organization that backs GSM (Global System for Mobile Communications). AT&T
said the licenses would provide the foundation for rolling out HSPA+, a technology
further along in its development, as well as LTE. The carriers released some
details of their plans on Thursday after a quiet period imposed by the U.S.
Federal Communications Commission (FCC) ended. Also on Thursday, Qualcomm said
it will use eight new licenses to expand its FLO TV mobile broadcasting service.

The 700MHz spectrum, which TV stations are required to give up by mid-February
2009 when they drop analog broadcasts, can reach farther and penetrate walls
better than current cellular frequencies. The auction brought in more than US$19
billion, with Verizon agreeing to pay more than $9 billion and AT&T about
$6.6 billion. At the urging of Google and other parties, the FCC set requirements
for use of some of the frequencies by any application or device. Google didn't
win any licenses, but it hopes, along with Microsoft and others, to take advantage
of "white spaces" between channels.

Verizon won a nearly nationwide block of spectrum that is 22MHz wide. That's
broader than the block where AT&T said it won licenses covering the 200
largest markets in the U.S. But though AT&T's block is only 12MHz, the two
carriers may be on roughly equal footing, according to IDC analyst Godfrey Chua.
Anything over 10MHz is enough spectrum to take advantage of LTE, which can deliver
higher speeds than current technologies and is also more efficient, he said.
AT&T also recently acquired valuable 700MHz spectrum from Aloha Partners.
Those licenses, for which AT&T said it would pay $2.5 billion, cover about
two-thirds of the U.S. population.

As wireless technology continues its march through new standards, its speed
can increase with each step. One of the latest, HSUPA (High-Speed Uplink Packet
Access), will offer 600K bps (bits per second) to 1.4M bps downstream and between
500K bps and 800K bps upstream on average, according to AT&T. The carrier
said it will finish building its HSUPA network using existing spectrum in the
middle of this year.

But speed gains for individual subscribers don't have to follow that path directly,
according to IDC's Chua. The bottom line is that LTE handles spectrum more efficiently,
but carriers have to determine the best tradeoff between speed and subscriber
base, he said.

"With that 22MHz, I can either serve more customers with less bandwidth
or serve fewer customers with more bandwidth," Chua said.

Even the higher speeds that LTE can deliver won't meet the expectations of
many users, in the view of Albert Lin, a mobile analyst at investment firm Sooner
Cap.

"Ask any moderate or heavy user, and they'll start rattling off features
that won't exist even with LTE," such as videoconferencing, certain types
of community interaction and virtual sessions in enterprise applications, he
said.

Consumers won't really benefit from the spectrum for some time. For one thing,
some successful TV stations are likely to fight the handover of frequencies,
Lin said. Verizon, for its part, said Thursday it doesn't plan to roll out LTE
until 2010.

Related reading:

- 700MHz
spectrum winners detail plans

- Wireless
auction yields mixed results for consumers

IDG News Service

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