NAB vs. CTIA: Citigroup Report
[Note: As of 10/7/11 NAB has removed this link to the report from their website. We have asked NAB for an explanation.]
Last week we mentioned how CTIA and NAB were fussing at each other over the relatively minor issue of FM receivers in cell phones. (An issue where this blog has consistently supported the CTIA viewpoint.) But this week the inter trade organization feud has escalated to the big issue: spectrum. With their million dollar CEOs, these 2 goliaths are out for blood to impress their memberships. Now NAB isn’t exactly up to date with the today’s nonbroadcast media. Their Policy Blog’s last entry was July 11 and has only had 5 posts this year! (CTIA’s blog by contrast has almost daily posts and sometimes 2/day.
(NAB’s use of Wordpress’ domain rather than their own domain for the blog is something a web savvy high school student would be embarrassed about. Poor NAB, the obvious Twitter name , @NAB, was already taken by National Australia Bank, but CTIA was able to get @CTIA for themselves. NAB was able to get #NABShow and statements from NAB appear from @NAB Newsroom, and @AirWharton in case your Twitter feed needs more input.)
NAB sent the news media the Citigroup report whose front page is shown above but as of this writing has not said anything on their own website about it. Wireless Week published a post with the eye catching headline: “Citigroup Report Discredits Spectrum Crunch; CTIA Fires Back”. They go on to write,
Citigroup says the U.S. wireless industry isn't facing a spectrum shortage and needs to do a better job managing the bandwidth it already has.
The report claims that wireless operators and other spectrum holders like cable operators are using only a portion of their spectrum to provide wireless services.
Citigroup's analysis was made public by the National Association of Broadcasters, which has been at odds with the wireless industry over an FCC proposal to auction off additional television airwaves for mobile broadband service.
Here are Citigroup”s conclusion (p.27)
•Mixed Signals — Robust Smartphone and tablet sales suggest wireless demand is growing rapidly. And, the FCC suggests the US faces a long-term spectrum shortage. However, several new wireless carriers - Clearwire, LightSquared and Dish - have been slow to light-up their spectrum suggesting excess supply. So, who's right? Isthere a spectrum shortage or not?
•Spectrum Availability High, Use Low — Today, US carriers have 538MHz of spectrum. And, additional 300MHz of additional spectrum waiting in the wings. But, only 192MHz is in use today. And 90% of this in-use spectrum is allocated to 2G, 3G and 3.5G services. As such, we estimate carriers can only offer average wireless speeds of 0.5-1 mbps during the peak busy hour.
•But, Spectrum Is in the Wrong Hands — Too much spectrum is controlled by companies that are not planning on rolling out services or face business and financial challenges. And, larger carriers cannot readily convert a substantial portion of their spectrum to 4G services, because most existing spectrum provides 2G-3.5G services to current users.
•Full 4G Can Deliver 5Mbps — 100% conversion of 538MHz allows carriers to offer 5Mbps with 10% simultaneous usage during peak busy-hour. This speed allows for very robust mobile use and limited home use. However, it is not sufficient for in-home replacement capable of large screen HD video streaming.
•Bottom Lines — We do not believe the US faces a spectrum shortage. However, unless incumbent carriers accelerate their 4G migration plans, or acquire more underutilized spectrum, upstart networks – like Clearwire, LightSquared and Dish – could have a material speed advantage over incumbent carriers provided that they can clear meaningful hurdles for funding and distribution
While NAB has no statement as yet on the report, CTIA certainly does:
“As we have said multiple times in the past, and has been recognized by a bipartisan group of lawmakers in the House and the Senate, the President, and the Chairman of the FCC, there is a need to bring additional spectrum to market to fuel what is one of the country’s key industries. Other countries have recognized the need to fuel their mobile ecosystems and have identified hundreds of megahertz of spectrum for mobile use. Our member companies would not be lining up to spend billions of dollars at auction for the right to use this spectrum if there was not explosive consumer demand for mobile broadband services.
“We need to move past NAB’s efforts to attack what everyone around the world already knows – that mobile broadband usage is exploding, and more spectrum is needed to continue to drive benefits for citizens that even five years ago were unimaginable.
“This time, NAB points to a report to conclude that there is no spectrum shortage. Aside from our concerns with several of the data points in the report, the most amazing element of the report that NAB fails to consider is that the authors of the study INCLUDE 120 MHz of reallocated broadcast spectrum in their analysis, when they talk about spectrum availability being ‘high.’ Page 2 of the report says that an additional 300 MHz of spectrum is ‘waiting in the wings,’ and 120 MHz of which is the very broadcast spectrum that the FCC has proposed to reallocate and that Congress is considering for incentive auctions. CTIA looks forward to working with Congress to ensure that there is in fact sufficient spectrum brought to market.”
And CTIA also has 2 recent tweets proclaiming the need for more mobile spectrum. So while we will not take this opportunity to take sides, it is clear that CTIA is the master of the new media for getting their word out!
So NAB did not release publicly any comment on the Citigroup report, just posted it on its website although now even that is gone!
However, an e-mail yesterday from NAB revealed their latest actions in this area: a letter from NAB President and CEO Gordon Smith to members of the Joint Select Committee on Deficit Reduction regarding the conclusion of a Citigroup study that there is no spectrum shortage affecting the wireless industry. In addition, an ad regarding the study in Capitol Hill publications.
Here is CTIA’s response released publicly on their website and blog:
"If this is how the NAB is showing their support for voluntary incentive auctions, then I would be fascinated to see how they'd respond if they opposed the idea. Frankly, I would imagine their messaging would look and sound like this letter. To be clear, ALL the proposals on incentive auctions are voluntary.
"Throughout this process, the NAB has consistently misrepresented the facts, with their efforts becoming more desperate as time goes on. The looming spectrum crisis is a fact that has been acknowledged by the president, members of Congress and the FCC Chairman and his colleagues. It has been acknowledged by foreign governments. The only people on the planet who consistently fail to acknowledge its existence work at the NAB.
“The fact is, America’s future is wireless. Consumers want the products and services they want, when they want them. This is a scheme that reflects the wireless broadband model far more closely than it reflects the broadcast television model, which is essentially the same as it was when Philo Farnsworth invented the TV in 1929.
“For the good of our members, American consumers and the American economy, Congress must act this year to make additional spectrum available for wireless broadband services.”
So we can see that CTIA is more transparent about their lobbying while NAB prefers to work in the shadows.
CTIA bog post: Citigroup vs. Engineering: I’ll Take Engineering