Verizon's Shammo sees Wi-Fi, LTE as complementary; FCC's Rosenworcel says Wi-Fi deserves spectrum

Verizon Communications (NYSE: VZ) CFO Fran Shammo doesn't have any problem with the increasingly available wealth of Wi-Fi even if it cuts into the use of Verizon's increasingly available--and sometimes costly--4G LTE. That is, as long as Wi-Fi continues to do what it does best: offer a fixed wireless solution for handling data offload.

"They're complementary products," Shammo said during a presentation and Q&A at Jefferies Global Technology, Media and Telecom Conference in Miami. "We always get into the argument of whether we like Wi-Fi or we like LTE. We always tell our customers that when they're in their homes they should be running on their Wi-Fi network."

That's especially easy to tell customers who are part of Verizon's limited FiOS family and have access to high-speed fiber-fed broadband home networks. It's not quite as easy to tell the remainder of the customers who link into cable home networks and the increasing number of cable Wi-Fi hotspots throughout the country and who might start to see cable Wi-Fi as a mobile wireless replacement.

Cable's emphasis on building and lighting Wi-Fi hotspots has led to some speculation that the MSOs are planning a nationwide Wi-Fi network where subscribers can seamlessly roam from one operator's franchise to the next. Industry executives have been coy about why they're building this huge wireless network, maintaining, like Shammo, that Wi-Fi is "complementary" to mobile wireless.

Still, hints have been dropped, such as comments Comcast (NASDAQ: CMCSA) Chairman-CEO Brian Roberts made during a first quarter earnings call with analysts.

"Short-term, (Wi-Fi is) a big adder to broadband and longer term, including our MVNO potential and other wireless assets we have in the company, we're in a position to think about where wireless is going and how we can participate in a way to build value," Roberts said in answer to an analyst's question.

Roberts later backed off and said any discussion of a nationwide wireless network built on Wi-Fi were "premature."

They're also technically infeasible, Shammo said.

"Wi-Fi technology can't replace wireless; it's not a mobile technology but it is complementary," the Verizon CFO insisted. "If you're in your home you're going to run off Wi-Fi and not LTE."

Wi-Fi's strength, he continued, is its ability to offload heavy data traffic from Verizon's 4G networks.

"You can't build enough capacity to handle that so you need that Wi-Fi offload," Shammo said. But, "if you look at Wi-Fi growth and LTE growth they're both going in the same direction; they're complementary. We don't believe Wi-Fi is a replacement for wireless; it can't hand off. It's complementary, not replacement."

The telecommunications industry is not alone in defining Wi-Fi and what it means to American consumers. In an address at a conference, Moving Wi-Fi Forward at The Newseum, FCC Commissioner Jessica Rosenworcel outlined that agency's strategy for unlicensed spectrum and Wi-Fi, noting that it's first necessary to discard "the tired notion that we face a choice between licensed and unlicensed spectrum" because that argument "is a simplistic relic from the past that we should have long since retired--because good spectrum policy requires both."  

She also refuted that Wi-Fi's success takes spectrum from "others who wish to use the airwaves."

In particular, she said, it is necessary to recognize that some services demand access to 600 MHz band spectrum but technology is providing a way to more efficiently use the "white space" within that low band.

"Let's be creative," Rosenworcel urged, including considering expanded duplex gap, finding new locations for unlicensed microphones that operate in that spectrum and providing unlicensed opportunities in channel 37. "If we do this right, we can increase the value of licensed spectrum without diminishing the number of licenses we sell at auction."

The FCC is working on a "new game plan" for unlicensed spectrum that includes opportunities in high-band, mid-band, and low-band spectrum, she said, and unlicensed spectrum is "a powerful force in the economy.  More unlicensed spectrum means more Wi-Fi."

For more:
- the FCC has this transcript

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