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CitiGroup Analysis: There is No Spectrum Shortage

According to a CitiGroup market analysis, there is no shortage of spectrum and control -- not availability -- of that spectrum is the constraint on mobile broadband.

The FCC and White House have been pushing incentive spectrum auctions on the premise that there is such a looming shortage.

Citi says that U.S. carriers have 538 MHz of spectrum, but are only using 192 MHz, with another 300MHz "waiting in the wings" -- the amount the FCC is planning to free up.

The National Association of Broadcasters was pointing to the study Monday as evidence that wireless industry cries, echoed by regulators at the FCC, of that looming spectrum shortage, which has lit a fire under the FCC to reclaim 120 MHZ from broadcasters to help alleviate that projected shortfall.

"Too much spectrum is controlled by companies that are not planning on rolling out services or face business and financial challenges," said Citi. "And, larger carriers cannot readily convert a substantial portion of their spectrum to 4G services, because most existing spectrum provides 2G-3.5G services to current users."

"We do not believe the U.S. faces a spectrum shortage," Citi said. "However, unless incumbent carriers accelerate their 4G migration plans, or acquire more underutilized spectrum, upstart networks -- like Clearwire, LightSquared and Dish -- could have a material speed advantage over incumbent carriers provided that they can clear meaningful hurdles for funding and distribution."

CTIA: The Wireless Association fired back, pointing out that the 300 MHz Citi was presuming was in the wings included that 120 MHz of broadcast spectrum.

"This time, NAB points to a report to conclude that there is no spectrum shortage," said Chris Guttman-McCabe, CTIA VP, regulatory affairs, in a statement. "Aside from our concerns with several of the data points in the report, the most amazing element of the report that NAB fails to consider is that the authors of the study include 120 MHz of reallocated broadcast spectrum in their analysis, when they talk about spectrum availability being 'high.'"

"As we have said multiple times in the past, and has been recognized by a bipartisan group of lawmakers in the House and the Senate, the President, and the Chairman of the FCC, there is a need to bring additional spectrum to market to fuel what is one of the country's key industries...Our member companies would not be lining up to spend billions of dollars at auction for the right to use this spectrum if there was not explosive consumer demand for mobile broadband services," he said.