C Spire Wireless is breaking its silence on the cause of a nine-month delay of the launch of its LTE network.
The service was scheduled to be launched at the end of last year but C Spire missed the deadline without explanation and then announced its LTE network would light up in September.
Some attributed the delay to expenses related to its launch of the iPhone last November, but Eric Graham, C Spire’s vice president strategic and government relations, went on the record Wednesday blaming the delay on interoperability issues between the different band classes in the 700 MHz band.
"The delay in our LTE launch was completely unrelated to our iPhone launch," Graham said in an interview.
The postponement had nothing to do with the iPhone and everything to do with its inability to get devices and equipment for its 700 MHz band class, he said.
C Spire holds spectrum in the lower A block, lower B block and lower C block, as do many other regional providers. Its band class 12 spectrum is not compatible with AT&T's band class 17 spectrum or Verizon’s band class 13 even through all the licenses are in the 700 MHz band.
C Spire’s unique band class has made it difficult to find manufacturers willing to make smartphones compatible with its spectrum. Launching LTE with only a limited selection of devices wasn't an option for C Spire, and the company decided to wait until it was able to secure a more competitive portfolio before moving forward.
"To be effective you have to have a complete portfolio of devices," Graham said.
The scheduled start date for C Spire's LTE service is on track for later this summer, but Graham declined to say whether the company would actually be using its 700 MHz holdings or had decided to use repurposed spectrum until it can find devices compatible with band class 12.
C Spire "does not anticipate any further delays," Graham said, but when asked if that meant the company had secured the necessary band 12 phones for its service, Graham would only say the company is "continuing its efforts on interoperable lower 700 MHz devices. He also declined to say whether Samsung, the vendor announced for its original LTE plans, would also provide equipment for its revised deployment.
U.S. Cellular recently launched LTE service on its band 12 spectrum but is only selling one smartphone with the service - and while its Samsung Galaxy S Aviator retails for $200 and has only recently come to market, Verizon has had similar smartphones on shelves since last spring and is selling many of them at half the cost of U.S. Cellular’s LTE smartphone.
U.S. Cellular federal affairs executive Grant Spellmeyer conceded the difficulties of using its band 12 spectrum at a Wednesday panel appearance at CTIA’s conference in New Orleans.
“The challenges have been enormous,” he said. “It is the number one regulatory issue facing our company… the devices that we purchase (aren’t as cheap) as they should be and deployment is not as rapid as it otherwise would be.”
The lack of roaming for U.S. Cellular’s LTE service is a “significant competitive challenge.”
Devices made for US Cellular's LTE service will not be able to roam on the LTE networks of its larger competitors. The lack of roaming could make its LTE service less attractive to customers who will only be able to access its faster data rates within its regional network footprint, compared to the nationwide LTE footprint offered by Verizon and other top-tier operators.
“The problem is I need a band 13 for Verizon or band 17 for AT&T and at this point the manufacturers have been unable to deliver that,” Spellmeyer said.
Graham, who also appeared on the panel with Spellmeyer, expressed similar frustrations.
“How can we deploy LTE if they can't get the service when they leave our footprint?” he said.
C Spire, whose 900,000 customers make it the largest privately held wireless provider in the country, did not anticipate running into interoperability issues when it shelled out about $200 million for a regional chunk of lower A and lower B block spectrum during the FCC's 2008 auction.
It was not until after the auction concluded that the 700 MHz band was chopped up into incompatible chunks that left companies like U.S. Cellular and C Spire with band 12 spectrum at a competitive disadvantage to AT&T and Verizon, whose nationwide holdings made LTE roaming a less critical issue.
"This is the first time a band class has been introduced that is more restrictive than the band class it replaces. This is the first time as far as I'm aware in the history of wireless that they came in... and lopped off an existing band class," Graham said during the panel.
Other band classes such as AWS and PCS have different partitions, but unlike the 700 MHz band, the various portions are interoperable.
The FCC took up the issue at its March 21 open meeting, when it passed a proposed rulemaking addressing interference issues that could arise from making lower portions of the 700 MHz band interoperable. The agency is also considering how to proceed if it finds that interoperability doesn't pose significant problems with interference.
The proposal has received broad support from regional operators. AT&T has said its LTE service could be degraded if it was forced to make its network interoperable with other 700 MHz bands.
But time is running out for operators with band 12 spectrum. There are significant penalties for failing to build out their networks by the deadlines set under the FCC’s build out requirements.
Licensees of the lower A and B blocks must build out 35 percent of the area covered by their licenses by next summer. Though there are some limited exceptions based on when operators actually got possession of the license, the regulations are considered to be tougher than the substantial service requirement typical to other bands.
Failure to meet the 2013 deadline could mean licensees may lose two years on the timeline to meet the requirement to meet the 70 percent mark after 10 years, meaning they would only have a total of eight years to roll out service to nearly three-quarters of the land spanned by their spectrum. The FCC has the option to take away licenses from operators failing to meet the deadlines.
Regional operators actually pushed for the more restrictive requirements to prevent spectrum speculation and warehousing, only to find themselves facing possible penalties as they scramble for solutions to the interoperability issue.
Steve Berry, head of the Rural Cellular Association, summed up the situation during an appearance at CTIA’s conference.
“The FCC allowed the bifurcation of the band and is slowly but surely addressing the inequities in the market,” he said. “Unfortunately, it’s taking a lot longer to put humpty dumpty back together than it took to pull it apart.”