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October 13, 2011

CitiGroup Analysis of No Spectrum Shortage in U.S. Draws More Fire

By Peter Bernstein, Senior Editor

As I stated in my posting of September 29, everyone enjoys industry fisticuffs and the controversy over the September 22 report by CitiGroup that concluded that there is no shortage of spectrum but rather it is a matter of availability has turned into a beauty.  

Weighing in with an insightful analysis of the situation and of the Citi report is Peter Rysavy, a technology consultant specializing in the capabilities and evolution of wireless technology and the executive director of the Portable Computer and Communications Association (PCCA), a group that evaluates wireless technologies, investigates mobile communications architectures and promotes wireless-data interoperability.     

Conclusion: There is a shortage

I will not spoil what is a good read. Rysavy’s analysis, Comments on Citi ‘Wireless Supply and Demand’  has a point-by-point refutation of the Citi document.   Here are some of the highlights:

Rysavy states that, “The Citi report calculates the capacity of wireless networks based on certain values of spectral efficiency of 3G and 4G technologies. Relative to my own analysis and commonly accepted industry values, the spectral-efficiency values used in the Citi report are incorrect to a significant degree, rendering much of the technical analysis and conclusions incorrect.”

He further elaborates saying that, “The bottom line conclusion that Citi arrives at, ‘We do not believe the U.S. faces a spectrum shortage,’ is invalid for the following reasons:

  • The conclusion is predicated on the incorrect analysis that 4G technologies have six times more capacity than they really do.
  • This incorrect capacity analysis means Citi's estimations of the amount of spectrum needed to support 4G technologies are also incorrect. 
  • Citi's analysis of spectrum demand for widespread 4G deployment anticipates only one sixth the amount of spectrum that is actually needed for widespread deployment of next-generation 4G service.”

Sleepless in America

CitiBank, for those of us who live in the New York area, for years had a tagline on its promotions, “The Citi Never Sleeps!”   Based on the amount of contention caused by its report, and the gravity of the stakes at play here in terms of actions the FCC may or may not take regarding current and future spectrum allocation (the LightSquared (News - Alert) GPS interference issues and AT&T/T-Mobile merger top a long and complex list), it appears a lot of people are not sleeping as well.    

It will be interesting to see who picks up the ball and runs with it next. Stay tuned.

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya (News - Alert), Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Jennifer Russell
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