Mobile Future

The Truth About Spectrum Deployment in Rural America

(Washington, DC) – Today, Mobile Future released a new report by Diane Smith, CEO and founder of American Rural and Mobile Future advisor, “The Truth About Spectrum Deployment in Rural America.” The paper examines the state of rural wireless network deployment and competition with an eye toward how federal spectrum policies can—and cannot— advance our innovation economy.

The report debunks the assumption that access to low-band spectrum is a primary contributing factor for the lack of buildout in rural areas. It also explains that setting auction rules that limit participation by carriers that have built infrastructure in and serve rural areas will not lead others to invest in rural America. A close examination of the facts and ongoing economics surrounding rural broadband deployment shows that while some carriers have consistently invested in mobile infrastructure in rural areas, Sprint and T-Mobile, who already have significant spectrum holdings (average of 84 MHz for Sprint and 32 MHz for T-Mobile) in the five rural states examined, have simply chosen not to make similar investments or to deploy any voice or data service in more than 75% of the counties in those states.

In fact, maps showing the four nationwide wireless carriers’ spectrum holdings in the five most rural states in the contiguous U.S. (Montana, Wyoming, North Dakota, South Dakota and New Mexico) reveal:

  • All four nationwide carriers hold spectrum in every county in these states.
  • In counties where Sprint and T-Mobile provide no coverage on their networks, the companies hold on average of more than 84 MHz and more than 32 MHz of spectrum, respectively.
  • Similarly, of the 231 counties in these five states, Sprint and T-Mobile each provide no voice or data service of their own at all in 177 of the counties.

The real barrier to rural deployment is the lack of potential revenue per square mile, compounded by some carriers’ lack of willingness to build.  But, allowing some carriers to obtain spectrum at a discount with no rural service obligations has no material impact on these fundamental economics.

“Nearly 20 percent of the nation’s population lives in rural areas and we are seeing increasingly more entrepreneurs and innovators thriving far from urban centers, largely because strong, reliable mobile networks help make this success possible,” Smith explains. “We are fortunate in rural America to have some providers committing billions of dollars to deploy networks in the hardest to reach areas, but it’s critical that policymakers also play a role in supporting those who choose to serve rural areas without rewarding those who don’t.”

The report outlines several more constructive and precise policy approaches including:

  • Resisting calls to penalize wireless companies that already serve rural America through rules that limit their auction participation;
  • Streamlining infrastructure siting requirements;
  • Targeting universal service funds to unserved areas; and
  • Thoughtful application of data roaming rules to encourage rural deployment.

The paper concludes that spectrum set asides are not the solution to expanding rural broadband deployment.  “Allowing some carriers to obtain spectrum at a discount with no rural service obligations is not an effective approach to building out a mobile communications system to serve rural and small town America,” said Smith. “The clearest path to establishing solid mobile infrastructure in rural America requires federal policies that help ensure all providers have the same opportunity to build out their networks, acquire spectrum and compete for customers.”