Verizon Wireless said re-farming its PCS spectrum won't give it the capacity it needs to handle rising traffic on its LTE network, its latest argument to bolster the case for its purchase of nationwide AWS spectrum licenses from four cable operators.
Verizon is working to convince the FCC to approve the transaction.
Verizon's competitors T-Mobile USA and MetroPCS claim the deal would harm competition by concentrating spectrum with too few providers, and they have asked the Commission to block the sale. Other operators have asked the FCC to impose conditions on the sale such as spectrum divestitures.
"PCS re-farming alone cannot offset the increasing capacity constraints on the company’s LTE network, and thus is not a substitute for additional AWS spectrum," Verizon said in a letter sent to the FCC last week. The letter was only made public yesterday, when it was posted to the agency's online docket.
Verizon does plan to repurpose some of its PCS spectrum for LTE but said it will only "be a supplement to, rather than an alternative for, additional AWS spectrum."
The operator has said it could run into capacity constraints in some areas as early as next year without additional spectrum, with the shortages becoming more widespread by 2015.
The amount of PCS spectrum available for re-use is limited by the amount needed to support Verizon’s existing CDMA EVDO service. Verizon said it needs a minimum of a 5 x 5 PCS block across an entire market to "meet its service objectives," in part because of increased 3G data traffic stemming from the iPhone and other data-intensive smartphones.
Verizon told the FCC its customers "require substantially more spectrum for LTE," with its year-end 2015 LTE traffic projected to be five times higher than its peak EVDO traffic. The AWS spectrum Verizon agreed to purchase last year from Time Warner Cable, Bright House Networks, Comcast and Cox Communications would give it an additional 20 to 30 MHz to use for LTE.
Verizon is seeking to rebut allegations that it is not using its spectrum as efficiently as it claims.
A recent study commissioned by T-Mobile found that Verizon's spectrum efficiency scored the worst against its three largest competitors when certain factors were taken into account. Verizon said T-Mobile is trying to "manipulate the numbers."
As part of its attempt to get the spectrum sale passed, Verizon has offered to sell off its lower 700 MHz A- and B-block licenses, which it paid $4.6 billion for during the FCC's 2008 auction.
The lower A-block lacks a guard band to protect it from television broadcast signals in adjacent Channel 51 and is subject to significant interference problems. T-Mobile CEO Philip Humm dismissed the value of Verizon's A-block offer during a conference call last month, when he said the interference problems “will most likely take three to six years to resolve, if at all."