AT&T and its smaller competitors faced off on whether the lower 700 MHz band should be made interoperable in statements filed with the FCC late Friday, the deadline for the first round of comments on the issue.

The FCC is considering a proposal to collapse AT&T's Band Class 17 – comprising the lower 700 MHz B- and C-blocks – into Band Class 12, comprising the lower 700 MHz A-, B- and C-blocks. The agency has not yet taken up establishing interoperability in the upper 700 MHz band held by Verizon Wireless.

Integrating the two bands could make it easier to roll out LTE service on lower 700 MHz Band 12 spectrum, as many regional operators with band 12 spectrum have struggled to find compatible LTE equipment and devices because their band lacks the scale and maturity of the ecosystem for AT&T's Band 17. It could also make it easier for regional providers to get LTE roaming.

AT&T argued that the change would open its customers to "substantial" interference problems from the A-block, which lacks a guard band between broadcast television transmissions in adjacent Channel 51.

“If we were forced to Band 12, we would open up our customers’ LTE devices to interference challenges they don’t see today,” Joan Marsh, vice president of AT&T’s federal regulatory affairs, said in an interview. “We would move from a world where we are protected from interference to one where we would have to try to overcome significant interference issues.”

Tests conducted by Vulcan Wireless showing interference is not a major problem are "unreliable," AT&T said.

"With literally nothing on the benefit side of the scale, any risk of harm should doom the unprecedented regulatory intervention the A-block licensees propose," AT&T said in its comments.

If the FCC puts the proposed interoperability mandate into effect, AT&T said it would have to abandon its development of Band 17 LTE devices, overhaul its device design plans and reconfigure its network to add in support for Band 12.

AT&T also argued that establishing interoperability would not help Band 12 operators with legacy CDMA networks, as AT&T's LTE phones fall back to its GSM network and would have to be redesigned to fall back to CDMA. The Rural Cellular Association, which represents many Band 12 licensees, has called that argument a "red herring."

Regional providers, including U.S. Cellular and C Spire Wireless, both owners of Band 12 licenses, claim that AT&T is overstating the interference issues to maintain its unique band class, precluding its competitors from benefitting from its LTE ecosystem.

"The proponents of Band 17 offered various technical justifications for the creation of that subset band, but real-world testing has shown those justifications were simply a pretext for a band that serves as an anti-competitive tool to further entrench the wireless duopolists," C Spire said.

The interoperability issue goes back to the FCC’s 2008 auction of the 700 MHz band and the 3GPP’s subsequent standards-setting process. When the spectrum was auctioned, the lower 700 MHz A-, B- and C-blocks were a single band, Band 12. Smaller providers buying up lower A-block and B-block licenses expected the equipment and phones they bought would be compatible with the entire band.

But after the auction closed, AT&T and its vendors then asked the 3GPP to create a separate band class for its lower B-block and C-block holdings to protect it from Channel 51 interference in the A-block. The 3GPP agreed to create Band 17, and AT&T’s LTE network and devices became incompatible with Band 12.

C Spire Wireless recently sued AT&T, Motorola Mobility and Qualcomm over the interoperability issue, alleging the three firms colluded to manipulate the standards-setting process and delay development of equipment and devices for Band 12. The Mississippi-based provider has been unable to use the Band 12 spectrum it paid $191.5 million for at the FCC's 2008 auction because it can't procure compatible smartphones. The LTE network it plans to launch in September will instead run on its AWS and PCS holdings, a strategy that gives it less headroom to handle customers' data demands.