Possible DTV Delay Roils Mobile Operators

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Faster wireless broadband in the U.S. may be held hostage to the already lengthy transition to digital TV if the deadline for shutting down analog broadcasts is pushed back, according to critics of an extension.

TV stations are required to move all their programming to digital channels after Feb. 17 as part of a process in which valuable frequencies in the 700MHz band will be turned over to mobile broadband providers. The federal government has been trying to prepare consumers for the change for years, but the incoming administration of President-elect Barack Obama has recommended an extension of the deadline. The National Telecommunications and Information Administration (NTIA), which had a US$1.3 billion budget for coupons to help consumers buy digital converter boxes for analog TVs, has said that program has run out of money.

The first step in the transition took place Thursday as TV stations in Hawaii were to go all-digital by a special early deadline. Hawaii made the change early to coincide with a move from one antenna site to another on the Big Island. TV stations are moving their towers down from the slopes of the Haleakala volcano in advance of the nesting season of an endangered bird, the dark-rumped petrel, said Linda Brock, vice president of programming and community relations at the Public Broadcasting Service (PBS) in Hawaii.

"So far, so good," Brock said of the transition, less than an hour after the deadline at 11 a.m. Thursday. An FCC representative in Hawaii was not immediately available for comment on the consumers' reaction to the shutdown of analog TV.

The nation's two biggest mobile operators, Verizon Wireless and AT&T, both plan to use 700MHz spectrum for the next generation of mobile broadband, based on LTE (Long-Term Evolution) technology. Earlier this week, Verizon Communications said a delay could hold up deployment of the Verizon Wireless LTE network, which is scheduled for its initial rollout this year. AT&T said it would support a three-month delay but not more, with an assurance of no further extensions. Both companies voiced their concerns in letters to lawmakers including U.S. Senator Jay Rockefeller of West Virginia and Representative Henry Waxman of California, who reportedly are considering legislation to extend the deadline.

The two carriers' positions reflect their disparate plans for LTE, according to Nadine Manjaro, a wireless analyst at ABI Research. Verizon is more anxious to gain control of its 700MHz frequencies and roll out LTE because it has less room to grow on its current 3G network, she said. That network, based on EV-DO (Evolution-Data Optimized) technology, has a theoretical maximum downstream speed of just 3.1Mb per second for a band 5GHz wide. AT&T is using HSDPA (High-Speed Downlink Packet Access), which can deliver as much as 48Mb per second in the same size band, she said. (The carriers control how that capacity is divided up among individual subscribers.)

With its goal of starting LTE rollouts this year, Verizon has good reason to oppose an extension of the deadline, Manjaro said. The carrier will be deploying a new technology on frequencies it's never used before, on top of having to work out coverage issues for a flagship network. If analog TV stations linger in areas where Verizon is building or testing a network, that could hold back the project.

"It's going to be challenging enough for them to roll out LTE without those issues," Manjaro said. "You never know, when you roll out a network, what the problems are going to be."

One possible solution would be to force a transition to digital TV early in the one or two markets where Verizon first wants to make LTE available, Manjaro said, though that could run into its own political complications.

Before Sprint Nextel launched its first commercial WiMax network in Baltimore at the end of September 2008, it spent months building and testing the networks in its initial target cities. Sprint WiMax networks in two of those cities, Chicago and Washington, D.C., still aren't open for business. Sprint's WiMax business was going through a complex merger with Clearwire at the time, which was completed in December. But in Verizon's case, the technology arguably is even newer.

AT&T, by contrast, probably won't roll out LTE until 2011, Manjaro said. But that company was forceful in its letter to Congress. The terms of new holders' spectrum licenses should be extended by the length of the delay, and if their frequencies are used by others during that term, the licensees should be reimbursed, AT&T said.

Each company pointed out that it paid the government billions last year in an auction for 700MHz spectrum licenses nationwide: In AT&T's case about $6 billion, and in Verizon's case more than $9 billion.

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