American telecoms

Some critics reckon the regulator’s projections are too pessimistic. But telecoms firms say an explosion of wireless data triggered by smartphones and tablet computers is indeed soaking up capacity fast. Hence the scramble for more airwaves. On December 2nd Verizon Wireless, the country’s largest mobile operator, announced a $3.6 billion deal to buy spectrum from several cable-television companies. AT&T, another telecoms behemoth, has been telling anyone who will listen that its $39 billion bid for T-Mobile USA, a smaller rival, should be approved in part because it would ease a capacity headache: AT&T has plenty of capital but needs more spectrum, while T-Mobile has the airwaves but lacks the capital to exploit them fully.

The snag is that allowing AT&T and T-Mobile to merge would stifle competition in the wireless market—which is why both the Department of Justice and the FCC oppose it. AT&T and Deutsche Telekom, T-Mobile’s German parent, have pledged to fight on, but the merger’s chances are slim. Verizon’s deal, by contrast, will probably be cleared by the FCC, which must approve transfers of licensed spectrum.

Could more wireless capacity be liberated from other businesses that do not need it? The FCC thinks so. It has come up with a proposal to persuade TV companies to part with some of their airwaves. It would solicit spectrum from broadcasters and then repackage it into larger lots to be sold in an auction. The revenue raised would be shared between the government and the broadcasters. The FCC thinks this could release up to 120MHz of TV broadcast spectrum.