‘Undesirable’ spectrum now key to Rogers mobile-video plans

Rogers Communications Inc. shelled out billions in this year’s 700 MHz spectrum auction for what was once “second-class” spectrum and what could now be the most coveted wireless real estate in the country, according to Nordicity analyst Stephan Meyer. Rogers spent $3.2 billion in the auction, the majority of which went to snapping up 20-year licences for contiguous A and B paired blocks of 700 MHz spectrum in every major wireless market in the country. The A block was previously “undesirable,” Meyer said in a phone interview, because carriers in the United States — which held its 700 MHz spectrum auction in 2008 — had concerns about interference from broadcast television. AT&T, the largest U.S. wireless carrier with more than 110 million customers according to recent financial filings, was a major holder of A block spectrum yet ignored it in favour of B and C blocks, Meyer said. This, he said, was in spite of new technology that avoided any interference from residual television signals. Pressure from the Federal Communications Commission (FCC) convinced AT&T to embrace the A block in September 2013, according to media reports at the time, and the wireless giant pledged in a letter to the FCC to make all of its 700 MHz devices compatible with the A block by Sept. 30, 2015. “The technology has already existed in labs; it's never been a problem,” said Meyer. “It was really more hobbled by the fact that the largest purchaser in the U.S. was not interested, was dragging their feet and said it had no use.” In a Feb. 19 press release issued after the 700 MHz auction results were revealed, Rogers said the contiguous A and B blocks, which can be used as a single block to double the size of the available bandwidth and thus the speed, would be used to deliver the “ultimate video experience” as well as increase mobile Internet speeds for the enterprise customers. The release was short on specifics about Rogers’s plans for video. 3 Macs analyst Troy Crandall noted that Rogers has made huge investments in sports programming, including the $5.2-billion deal the company signed with the NHL last November, and could be “planning something big” for mobile sports content. “Video takes a lot of bandwidth, especially sports,” he said. “If you're going to deliver big bandwidth over a mobile device, you have to have the big spectrum to back that.” Rogers’ 700 MHz spectrum purchase covers 99.7 per cent of the Canadian population, the company said in its Feb. 19 release, and will also provide better range and signal strength in densely populated cities. Carriers will have to build new towers and offer new devices in order to put the different blocks of 700 MHz spectrum to use. AT&T’s decision to embrace the A block fundamentally changed the dynamics of Canada’s 700 MHz spectrum auction, said Gregory Taylor, principal investigator at Canadian Spectrum Policy Research. “Suddenly, this band had some real value that no one thought it did before,” he said in a phone interview. “It immediately changed the dynamic of that band, which was considered a second-class or second-level band until that point. I don't think that it would have happened without this change that happened south of the border.” “It obviously became the most desirable combination in the auction,” he noted. Now, he said, Rogers has its spectrum more or less aligned with AT&T and can count on devices being able to work on both networks when customers are travelling. “This is the same strategy Rogers has employed for years now, which is to follow the AT&T ecosystem,” he said. Rogers did not respond to requests for comment. Under the rules of the 700 MHz auction, companies are not allowed to discuss agreements with one another or the media related to their spectrum purchases until April 2, the deadline for payment. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

‘Undesirable’ spectrum now key to Rogers mobile-video plans

News | March 5, 2014

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‘Undesirable’ spectrum now key to Rogers mobile-video plans

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