The Federal Communications Commission (FCC) is in the final stages of deciding the rules of the road for an upcoming auction of spectrum — the invisible airwaves over which wireless service is carried. In this particular auction, it will sell low-band spectrum that is especially suited for use by wireless carriers in rural areas.
Sprint and T-Mobile have lobbied heavily to limit the amount of spectrum that will be available to AT&T and Verizon, so that they can get it cheaply — without having to bid against AT&T and Verizon. They argue that they need it for rural coverage. How well does that argument hold up for West Virginians?
Check the coverage map of T-Mobile and you will find that T-Mobile does not have a network of its own in West Virginia — at all. Its coverage is all via “partners.” That means it’s the partners who have actually built a network — not T-Mobile — who need the spectrum.
Sprint does provide coverage of the most densely populated parts of West Virginia on its own network, but much of its coverage is also off-network, through partners, and it only offers LTE, the most up-to-date mobile broadband technology, in a small part of West Virginia, adjacent to its coverage of larger neighbors in other states.
AT&T and Verizon, on the other hand, not only cover West Virginia with their own networks, they provide LTE to most people in the state, in many parts of the state.
Will T-Mobile and Sprint’s coverage change if the FCC favors them in the auction? Not likely, especially in the case of T-Mobile. While both companies claim to cover rural America, there is rural and there is rural. Sprint and T-Mobile offer LTE where the population density is greatest, because that means their potential revenue is greatest.
Take Jefferson County, Kentucky, which includes Louisville, where both T-Mobile and Sprint offer LTE. Revenue per square mile in Jefferson County, with its population of 1,948 people per square mile according to the 2010 Census, is $1.2 million per square mile. The total population for Jefferson County is 741,096 people, offering total revenue of $445 million.
Contrast that potential with West Virginia’s Ohio County, where both AT&T and Verizon offer LTE, but neither T-Mobile nor Sprint does. Its population per square mile is 420, providing revenue per square mile under $300,000. The total population of the county, 44,443 people, provides potential revenue for the county of $27 million, about 6 percent of the revenue on offer in Kentucky.
What would AT&T and Verizon do with more spectrum? Provide more bandwidth and higher speeds in both urban and rural areas. They plan to cover 300 million Americans with LTE nationwide, and many of those are in West Virginia today.
Both Sprint and T-Mobile have told Wall Street that they plan to cover about 250 million people with LTE and that they are close to finishing that task. When they plan their remaining LTE rollout, will they provide LTE throughout West Virginia? It’s the key question the FCC should be asking them as it finishes its rules for the 600-MHz auction.
Anna-Maria Kovacs is a visiting senior policy scholar at Georgetown University’s Center for Business and Public Policy and specializes in communications deployment to rural America.