Broadband Cable Association of Pennsylvania


October 1, 2013

The auto and cable industries are in a jam over a lane of wireless spectrum.

Car companies want the airwaves—currently reserved for them—to allow vehicles to communicate with each other as well as infrastructure such as stoplights, making road traffic flow more smoothly. But in meetings with the Federal Communications Commission as recently as last week, the cable and technology industries have argued that more spectrum is needed for Wi-Fi service, as existing channels become increasingly congested. Ultimately, the decision will be up to the FCC, which oversees spectrum allocation. The government shutdown derailed plans for a Tuesday hearing in front of the House subcommittee on Communications and Technology that had hopes of finding a solution.

The debate pits auto makers such as General Motors Co. and Ford Motor Co. against cable companies such as Comcast Corp. and Time Warner Cable Inc. It also shows the challenges facing the federal government as it tries to allocate airwaves to the growing number of industries finding new ways to put it to use. Microsoft Corp. and Google Inc.—concerned that slower Web connections will mean fewer consumers can access their services—also want auto companies to share the spectrum. "Enabling additional Wi-Fi access in the 5 GHz band in the near term is critical to meet rapidly expanding Wi-Fi demand," Comcast wrote, referring to the spectrum at issue, in a filing with the FCC dated Sept. 25.

The capability, also known as vehicle-to-vehicle communications, has been on the drawing board for years and is separate from the effort involving cellular carriers to connect cars to the wider Internet. Like Wi-Fi, the signals will be sent over spectrum that companies can use free as long as they don't create interference. There are roughly 30,000 road fatalities each year in the U.S. The National Highway Traffic Safety Administration estimates that connected cars could reduce the number of accidents not involving an impaired driver by 80%. The U.S. Department of Transportation is currently running a $25 million trial for connected cars in Ann Arbor, Mich., with about 2,800 vehicles. The NHTSA is expected to make a decision before the end of the year on whether cars should be required to use the technology.

The government assigned spectrum in an upper slice of the 5 gigahertz spectrum band for automotive use in 1999. The high frequency band isn't useful for cellphones but works well with short-range communications. Earlier this year, however, the FCC sought feedback on the idea that car companies share the spectrum with Wi-Fi. The proposal, part of a broader effort by the FCC to unlock 35% more spectrum for unlicensed use like Wi-Fi, was met with strong opposition from the car companies, which say sharing the airwaves could cause interference with connected car systems and hurt safety.

Cable companies say it should be possible for both industries to use the spectrum without causing interference. The cable companies argue that a lower portion of the 5 gigahertz band, currently not being used by auto makers, should be made available for broader Wi-Fi use immediately while sharing with car companies is sorted out. Without the extra spectrum it will be difficult to roll out a new global Wi-Fi standard that could allow for "gigabit Wi-Fi," which would dramatically increase speeds, cable companies say. If the FCC doesn't act, car companies will retain exclusive rights over the spectrum, and those wanting to use it for Wi-Fi will have to look elsewhere. A decision isn't imminent, people familiar with the FCC's thinking said. Millions of Americans rely on Wi-Fi for Internet access, and cable companies have staked their wireless futures on it as customers spend more time watching video on mobile devices. The cable industry is hoping to hang on to their customers' attention after they leave the house by offering Wi-Fi hot spots across the country as a free add-on for broadband subscribers.

Last year, five large cable companies struck an agreement to share their hot spots. There are already more than 150,000 such sites available to subscribers. Comcast Chief Executive Brian Roberts told analysts in July that Wi-Fi is "at the center of our strategy to offer our customers the fastest online experience across devices both inside and out of the home." A group of car companies said in February that its members understand the importance of providing more spectrum for Wi-Fi, but "it is critical that efforts to open up additional spectrum do not come at the expense of revolutionary lifesaving technologies." Wall Street Journal

AT&T Inc. is following plans by Google Inc. to offer ultrafast Internet service in Austin, Texas, by the middle of next year, focusing the service on neighborhoods that demonstrate the most demand.

The build-out promises Internet speeds of up to a gigabit per second, or about 100 times faster than those found in many U.S. homes. But it poses a conundrum for some advocates of faster Internet service. The upgrade is economical because the carrier is targeting the most promising areas. That means communities that can't afford fast Internet could fall further behind on the digital curve. The issue could become more acute if experiments like this one in Austin and Google's earlier effort in Kansas City, Kan., begin to spread across the country.

AT&T Chief Executive Randall Stephenson expressed an interest in building out fast Internet service in other towns and cities now that the terms are improving. "They're actually beginning to accommodate and tailor terms and conditions that makes it feasible for us to invest," Mr. Stephenson said at an investors conference in New York last week. "That being the case, you will see us do more and more cities around the country."

Google said in April it would expand its own fiber-optic network program to Austin. At the time, AT&T committed to upgrading its Internet and video service in the city if local authorities gave it the same terms. AT&T said Monday it will begin offering upgraded service with speeds up to 300 megabits per second in December, with higher speed 1 gigabit service available in mid-2014. AT&T already sells its U-verse Internet and video service in Austin.

The service uses fiber optic cables, but the fiber needs to be extended to buildings for the new higher-speed connections. The carrier didn't disclose the prices for the service but will open a website Tuesday where Austin residents can ask to have the service extended to their neighborhoods. Google used a similar model in planning its Kansas City high-speed networks to only reach neighborhoods guaranteeing high demand for the service through preregistrations. In Kansas City, Google charges $70 a month for its ultrafast Internet service, before taxes and fees.

Most cable and phone companies were required by franchise agreements with regional governments to build out most of the markets they entered, regardless of demand. Doing without that requirement allows the company to avoid spending money laying cables that might never be used. Lori Lee, senior executive vice president of AT&T Home Solutions, said the company is still talking with local regulators, but it is confident that its plans will proceed on time. The arrangement will bring much faster service to subscribers than otherwise would have been possible. But there is concern that poorer people and rural areas will get left behind.

Broadband Internet access already has a strong economic component. According to the Pew Research Center, about 54% of households with less than $30,000 in annual income have broadband access at home, compared with 88% of households making at least $75,000. Even where broadband is available, some 100 million U.S. residents don't subscribe. Advocacy groups say the experiments need to be watched carefully. "Our concern is that we lose this notion of a public network and public infrastructure when service is determined only by where a company's bottom line takes it," said Matt Wood, policy director at Free Press. "These experiments are local, but they are probably the blueprint going forward for nationwide policy." Wall Street Journal

Dish Network Corp. struck a short-term deal that will allow the satellite TV provider to continue to carry media giant Walt Disney Co.'s TV programming, a pact that for now avoids a blackout for channels like ABC and ESPN. Details regarding the extension, including the length of time or the state of the ongoing talks between the companies, weren't disclosed. Neither company intends to provide further comment beyond a short, joint statement. Dish and other pay-TV operators have complained about the increasing fees demanded by broadcast networks, saying they are trying to protect their customers from costs they are forced to pass on. Programmers like Disney, meanwhile, argue they're just getting fair value for their programming. Dish in particular has complained about the rising costs of sports TV channels, and ESPN, which is majority owned by Disney, is the most expensive one. Showdowns in the pay-TV world have become highly contentious of late, with both sides often issuing frequent press statements to tout their cause. A recent spat between CBS Corp. and Time Warner Cable Inc. led to a month-long blackout, though an agreement was reached in early September. Wall Street Journal