02.23.2012Public Policy

Spectrum: crunching the numbers

Verizon Wireless is purchasing Advanced Wireless Spectrum (AWS) licenses from SpectrumCo and Cox to ensure that our customers get the fast, reliable service they expect from their 4G devices. This purchase is clearly in the public interest. It puts unused spectrum into the hands of 109 million consumers who will use it for high-quality wireless broadband service on Verizon’s 4G LTE-enabled smartphones, tablets, and other devices.

But why does Verizon need more spectrum? The answer – highlighted in a recent article on CNN Money– has become one of the big policy debates in Washington and across the country: the coming spectrum crunch. As more and more consumers use more and more wireless devices, additional spectrum capacity is needed for video-streaming, video-chatting, music, video and other content downloads, and any number of applications that require fast and reliable wireless broadband connections.

Consider that smartphone traffic in 2015 will be 47-times greater than it is today. And those tablets that are becoming increasingly indispensable at home and at work? They use approximately 120-times the capacity of traditional phones. By 2015 it is projected that mobile-connected tablets will generate as much traffic as the entire global mobile network in 2010.

But more spectrum is only part of the story. It isn’t just about how much spectrum a carrier uses, it’s how well—or efficiently—it uses the spectrum to meet customer needs. And Verizon Wireless is one of the most efficient wireless providers in the world.

Today, we serve approximately 109 million wireless connections, more than any other wireless provider in the U.S. Those connections are serviced with a nationwide spectrum license base that averages 88 megahertz of spectrum. That means, on average, Verizon uses one megahertz of spectrum to serve 1.2 million customer connections. Should the AWS spectrum transfer be approved, these wireless connections would be served using an average of 109 MHz nationwide, with one megahertz of spectrum serving almost one million customer connections.

In its FCC filing opposing our license purchase, T-Mobile claims that “the principal impact of the acquisition would be to foreclose the possibility that this spectrum could be acquired by smaller competitors – such as T-Mobile – who would use it more quickly, more intensively, and more efficiently than Verizon Wireless.”

Rhetorical flourishes aside, let’s be clear on the facts: it’s hard to imagine anyone launching LTE more quickly and more broadly than Verizon did. The broadcasters moved from the 700 MHz spectrum in June 2009 and we launched LTE in November 2010, covering 100 million people. Just over a year later, we've already reached 200 million people, and our nationwide deployment will be completed – on schedule – at the end of 2013.

As for intensive use, Verizon is 2-times more efficient with our spectrum than T-Mobile. While Verizon Wireless services 109 million connections with an average of 88 megahertz, T-Mobile has 50 MHz to serve 33 million customers. Both Verizon and T-Mobile have spectrum licensed nationwide, which means, as I mention above, Verizon serves 1.2 million customers on average per megahertz, while T-Mobile serves only half that with 660,000 per megahertz.

Finally, T-Mobile fails to mention that it will be gaining 10-20 megahertz of AWS spectrum covering 40 percent of the population of the U.S. as a result of its break-up deal with AT&T, giving it spectrum in some areas on a par with Verizon and other competitors.

Rather than waste time arguing about spectrum efficiency, let’s focus on the issue on which we all agree: America’s wireless consumers face a spectrum crunch that won’t be relieved by Verizon’s spectrum purchase. It’s up to the industry, as well as policymakers, to help ensure that more spectrum reaches the marketplace soon, so America’s wireless industry remains the global leader in innovation that it is today. I’m sure T-Mobile would agree with that.