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Just an FYI: The primary challenge to the mobile operators is backhaul from the base stations, not spectrum. At any given tower/site, you've only got a certai

by Nrsolis 14y ago

Just an FYI: The primary challenge to the mobile operators is backhaul from the base stations, not spectrum. At any given tower/site, you've only got a certain amount of fixed facilities from the local wireline carrier that are available. In other cases, you're using point-to-point microwave links to backhaul until you can offload that traffic to a fiber-connected location. In either situation, you need to think about the entire picture before you go ahead and focus on "spectrum" as the reason why your link speed differs from what you expect. There are many moving parts and they all can cause congestion. And the AT&T/T-Mobile merger was nixed because they tried to pull a fast one on the FCC/DOJ by claiming that they needed the spectrum/infrastructure to upgrade their network. When a document surfaced that showed that their cost to upgrade their existing network was a fraction of what they were paying for the T-Mobile network, it became clear that they were buying them to eliminate price competition.

rayiner 14y ago
I assume you were replying to me. Where the bottleneck is depends on market being served. In dense urban areas (i.e. the ones that matter), the bottlenecks is often spectrum. See: http://gizmodo.com/5847811/giz-explains-whats-wireless-spectrum-and-why-you-care-about-it-more-than-you-think http://gizmodo.com/5847811/giz-explains-whats-wireless-spect..., http://www.androidpolice.com/2013/01/25/verizon-sells-att-lower-700mhz-b-block-to-att-for-1-9-billion-and-some-aws-spectrum-heres-what-that-means http://www.androidpolice.com/2013/01/25/verizon-sells-att-lo.... This is both because the density of users in urban areas, and the fact that it's easier to provision urban cell cites with fiber.
- Nrsolis 14y ago
  Sorry. Wrong again. When a cell reaches capacity, you subdivide the cell. e.g. You turn a single 3-sector cell into three smaller cells. Each cell operates in either a different frequency range or in the case of OFDMA (LTE) via a remapping of the timeslots and a lower upper power range. Exactly the same way that you can re-use the 2.4Ghz band for WiFi a bazillion times over. So the challenge isn't the available spectrum; it's the available dollars to install base-stations and do backhaul. QED.
  - rayiner 14y ago
    That doesn't mean that availability of spectrum isn't a challenge, it just means it's a challenge that can be overcome by throwing money at the problem. You're taking about a complex multi-factor optimization problem. The fact that you can address a challenge, vis-a-vis a competitor, along one axis of the design space by moving along a different axis of the design space does not mean that there is no challenge. If one competitor has more spectrum than another, it can support similar numbers of users at similar densities at lower capital costs. Alternatively, it can offer users higher speeds and higher capacity for similar capital investment. See: http://gigaom.com/2012/05/14/atts-chicago-problem-why-lte-slows-down-in-the-windy-city/ http://gigaom.com/2012/05/14/atts-chicago-problem-why-lte-sl... In other words, if AT&T and Verizon both have $1 billion to build cell sites/backhaul in Chicago, and Verizon has 20 MHz of spectrum and AT&T only has 10 MHz, then Verizon can support more users at higher speed and its service will be perceived as much better. Alternatively, it can spend less than $1 billion on capital costs and offer the same service level as AT&T at a lower price while maintaining similar profits. Also, making cell sites smaller is not a magic bullet. It's just one axis along the design space. Inter-cell interference is not a trivial problem, and having more spectrum can allow you to go to a point in the network design space where you have to worry less about that problem.
    - Nrsolis 14y ago
      Except that more spectrum isn't free and is a finite resource. It isn't fair to dismiss one carrier as not being viable (which is what I took from your original post) if they can compete along a different axis more efficiently when compared to another carrier. Don't forget that over time, technology advancement tends to favor later entrants to the market versus early ones. It's entirely possible that T-mobile can operate an LTE network with triple the base-station density of AT&T because they waited until the equipment was at a cost that would make the deployment cost-efficient.
      - rayiner 14y ago
        My whole point is that the place in the design space a carrier with less spectrum is forced to compete from is less efficient than the place in the design space of a carrier with more spectrum. The carrier with less spectrum is forced to spend more capital on building cell sites, spend more money on operating costs for more numerous, smaller sites versus less numerous, larger sites, spend more money debugging inter-cell interference, etc, all just to match the other carrier in performance at a given capacity. The carrier with more spectrum has more capital tied up in spectrum holdings, but that's a totally non-depreciating capital asset that's by and large cheaper than network infrastructure to begin with. And I'm not writing off T-Mobile based on their current spectrum position. I'm writing them off based on the trajectory. If T-Mobile has to burn more capital deploying an LTE network with much higher density to achieve similar performance, then they are going to have lower margins than VZN and AT&T. Lower margins means less capital for building out the N+1 generation system. Of course this is all theoretically consistent with the status of wireless as a market that breeds natural monopolies. VZN has a spectrum edge right now that's moderate nationwide, but fairly substantial in many major cities. That edge in spectrum holdings means they can serve more customers at a given performance level for dollar of capital spent on infrastructure. That means when the next spectrum auction happens, they'll be able to acquire even more spectrum and enlarge their lead.

by Nrsolis 14y ago

rayiner 14y ago

I assume you were replying to me. Where the bottleneck is depends on market being served. In dense urban areas (i.e. the ones that matter), the bottlenecks is often spectrum. See: http://gizmodo.com/5847811/giz-explains-whats-wireless-spectrum-and-why-you-care-about-it-more-than-you-think http://gizmodo.com/5847811/giz-explains-whats-wireless-spect..., http://www.androidpolice.com/2013/01/25/verizon-sells-att-lower-700mhz-b-block-to-att-for-1-9-billion-and-some-aws-spectrum-heres-what-that-means http://www.androidpolice.com/2013/01/25/verizon-sells-att-lo.... This is both because the density of users in urban areas, and the fact that it's easier to provision urban cell cites with fiber.

Nrsolis 14y ago
Sorry. Wrong again. When a cell reaches capacity, you subdivide the cell. e.g. You turn a single 3-sector cell into three smaller cells. Each cell operates in either a different frequency range or in the case of OFDMA (LTE) via a remapping of the timeslots and a lower upper power range. Exactly the same way that you can re-use the 2.4Ghz band for WiFi a bazillion times over. So the challenge isn't the available spectrum; it's the available dollars to install base-stations and do backhaul. QED.
- rayiner 14y ago
  That doesn't mean that availability of spectrum isn't a challenge, it just means it's a challenge that can be overcome by throwing money at the problem. You're taking about a complex multi-factor optimization problem. The fact that you can address a challenge, vis-a-vis a competitor, along one axis of the design space by moving along a different axis of the design space does not mean that there is no challenge. If one competitor has more spectrum than another, it can support similar numbers of users at similar densities at lower capital costs. Alternatively, it can offer users higher speeds and higher capacity for similar capital investment. See: http://gigaom.com/2012/05/14/atts-chicago-problem-why-lte-slows-down-in-the-windy-city/ http://gigaom.com/2012/05/14/atts-chicago-problem-why-lte-sl... In other words, if AT&T and Verizon both have $1 billion to build cell sites/backhaul in Chicago, and Verizon has 20 MHz of spectrum and AT&T only has 10 MHz, then Verizon can support more users at higher speed and its service will be perceived as much better. Alternatively, it can spend less than $1 billion on capital costs and offer the same service level as AT&T at a lower price while maintaining similar profits. Also, making cell sites smaller is not a magic bullet. It's just one axis along the design space. Inter-cell interference is not a trivial problem, and having more spectrum can allow you to go to a point in the network design space where you have to worry less about that problem.
  - Nrsolis 14y ago
    Except that more spectrum isn't free and is a finite resource. It isn't fair to dismiss one carrier as not being viable (which is what I took from your original post) if they can compete along a different axis more efficiently when compared to another carrier. Don't forget that over time, technology advancement tends to favor later entrants to the market versus early ones. It's entirely possible that T-mobile can operate an LTE network with triple the base-station density of AT&T because they waited until the equipment was at a cost that would make the deployment cost-efficient.
    - rayiner 14y ago
      My whole point is that the place in the design space a carrier with less spectrum is forced to compete from is less efficient than the place in the design space of a carrier with more spectrum. The carrier with less spectrum is forced to spend more capital on building cell sites, spend more money on operating costs for more numerous, smaller sites versus less numerous, larger sites, spend more money debugging inter-cell interference, etc, all just to match the other carrier in performance at a given capacity. The carrier with more spectrum has more capital tied up in spectrum holdings, but that's a totally non-depreciating capital asset that's by and large cheaper than network infrastructure to begin with. And I'm not writing off T-Mobile based on their current spectrum position. I'm writing them off based on the trajectory. If T-Mobile has to burn more capital deploying an LTE network with much higher density to achieve similar performance, then they are going to have lower margins than VZN and AT&T. Lower margins means less capital for building out the N+1 generation system. Of course this is all theoretically consistent with the status of wireless as a market that breeds natural monopolies. VZN has a spectrum edge right now that's moderate nationwide, but fairly substantial in many major cities. That edge in spectrum holdings means they can serve more customers at a given performance level for dollar of capital spent on infrastructure. That means when the next spectrum auction happens, they'll be able to acquire even more spectrum and enlarge their lead.