Some Clearwire customers remain unhappy when speeds are throttled to “manage” the network.

Clear (formerly known as Clearwire) has announced a general rate increase of about 10 percent for customers using its legacy 4G WiMAX broadband service.

As a result, most customers will pay about $5 more per month for fixed wireless or “on the go” broadband service.

“We instituted this to remain competitive and manage our costs,” a Sprint representative told Broadcasting & Cable. “Like our competitors, we must respond to customer trends, and provide a good user experience, and as a result we will make adjustments to fees and services from time to time. Our offer is still comparable to other offerings in the marketplace.”

Some customers would argue with Sprint’s definition of a “good user experience,” as complaints continue about heavy-handed throttling of Clear’s service that makes high bandwidth applications painful or impossible to use in the evening.

Stop the Cap! reader Akos contacted us this week to complain Clear still advertises and contracts for “unlimited data and top speeds,” while not exactly being upfront about targeting certain traffic for a prime time speed throttle that effectively keeps customers from streaming video.

“They openly admit their service is being throttled by software at each tower site that activates when it detects streaming video services like Netflix, reducing speed from 1.3Mbps to as little as 20kbps, rendering it unusable,” said Akos.

The speed throttle is usually active from 8pm-1:30am daily, when traffic is anticipated to be highest. Clear speaks about its network management speed throttle in the fine print: its Acceptable Use Policy.

Akos complains Clear’s speed throttle makes it easy to blame the streaming service, not Clear itself, because customers running speed tests will not see throttled speeds.

“It fools people to think the problem is on their end or with the streaming service, so customers don’t complain to Clear,” says Akos.

As a result, people using streaming video services get about 30 seconds of uninterrupted video before the throttle kicks in bringing extensive buffering delays.

Clearwire’s Speed Throttle Subject of Lawsuits

Clear’s own 2010 marketing promises unlimited usage with no speed reductions, like those “other” providers.

Clearwire’s speed throttle has been a part of life with the wireless service since 2010. Clearwire had significant legal exposure over its choice of network management because the company routinely advertised “unlimited service” with no speed throttles or overlimit fees. At least three lawsuits were filed against the company for its undisclosed throttling practices, eventually condensed into a single class action case that was finally settled last month.

Under the terms of the settlement, Clear admits no wrongdoing, but will clearly disclose it uses “network management” practices — a term that generally means usage caps and/or speed throttles — and will give customers information about the speeds they can expect when the throttle is active. As of today, Clear has not done that. Clear also volunteered to suspend term contracts and waive early termination fees for customers complaining about speed issues.

At least seven law firms handling the case will split a total award fee of $1,887,792.91 and expenses of $62,207.09. Individual representative plaintiffs each receive up to $2,000. Everyone else identified as part of the class action case that returned a claim form prior to Jan. 3, will receive an average of less than $30:

• a 50% refund of any early termination fee charged after a customer canceled service because of speed throttling;
• a rebate of $14 for customers signing up for Clearwire before Sept. 1, 2010 and experiencing speed throttling or a rebate of at least $7 for Clearwire customers signing up on or after Sept. 1, 2010;
• plus varying amounts for each month of service prior to Feb. 27, 2012 during which Clearwire’s records show it throttled a customer’s Internet speed. Customers throttled at 0.25Mbps will receive $5.00 for each month throttled, 0.60 Mbps: $3.00, and 1.0 Mbps: $2.00.

Court documents reveal of the 2,733,406 customers identified in Clearwire’s records as being speed throttled, only 83,840 submitted timely claims as part of the class action case. This represents a claims rate of about 3.1%. Of those, 76,199 were for speed throttling, 2,331 were requests for reimbursement of early termination fees.

The Future of Clear’s WiMAX and Sprint’s 4G

Sprint purchased the assets of Clearwire Corporation in July, rebranded the network “Clear,” and as of the end of August, stopped selling WiMAX devices to customers. Although Clear will still activate existing equipment, potential new customers are being marketed broadband plans on the Sprint network instead.

Former Clear dealers have received word Sprint plans to eventually decommission its acquired WiMAX network as early as 2014, most likely by gradually converting portions of the 2.5GHz spectrum Clear’s WiMAX service now uses in favor of Sprint’s 4G LTE service in urban and high congestion areas. Clearwire itself was in the process of adopting a variant of 4G LTE technology that would gradually replace the outdated WiMAX standard when Sprint acquired the company.

Although Sprint runs its own 3G network, it partnered with Clearwire to provide 4G WiMAX for Sprint customers. In 2011, Sprint announced it would stop selling devices with built-in support for WiMAX and announced it would launch its own 4G LTE network. Sprint will adopt the same version of LTE other North American carriers are using: FD-LTE, or Frequency Division LTE, which requires one transmit channel and one receive channel. But it will also support and continue Clearwire’s upgrade to TD-LTE, or Time Division LTE, a slightly different standard that supports receiving and transmitting signals on a single frequency at slightly different time intervals, providing enhanced spectrum efficiency. At least 5,500 towers should be active with TD-LTE service by the end of this year. End users will care only to the extent their devices support one or both standards.

Sprint’s 4G LTE rollout will depend primarily on higher frequency spectrum that is disadvantageous indoors and over extended distances. Sprint’s competitors AT&T and Verizon Wireless primarily depend on lower 700MHz frequencies that penetrate buildings better and can serve a larger coverage area. But a combination of Sprint and Clearwire’s spectrum assets give Sprint the most wireless spectrum of any U.S. carrier, which means potentially faster speeds and more capacity.

• 1900MHz: Sprint’s primary 4G FD-LTE service is now available in 151 cities on more than 20,000 cell towers;
• 2500MHz: Now used by Clear’s legacy WiMAX network, will see a transition towards Sprint’s TD-LTE service which will be targeted to urban and high congestion areas from “small cell” sites;
• 800MHz: The former home of now-shuttered Nextel, Sprint will eventually launch FD-LTE service on this band which will offer better indoor and marginal area reception.

Customers can expect devices that support both FD-LTE and TD-LTE in 2014.

LightSquared, the ill-fated venture to bring nationwide 4G wireless broadband to the masses may be all but gone and forgotten in bankruptcy reorganization proceedings, but the wireless spectrum it controls and the drama surrounding it is not.

A battle between billionaires and the hedge funds they support has broken out over who will ultimately control the failed venture — a hedge fund manager deep in LightSquared debt or the richest man in Colorado that often finds a way to get his way.

Harbinger Capital Partners’ Phil Falcone

Falcone

Phil Falcone earned his first fortune trading junk bonds in the 1980s. In 2001, he launched Harbinger Capital Partners and by 2007, Falcone and his investors were well-positioned for a blizzard of cash betting against sub-prime mortgages just before the housing collapse and credit crisis that followed. Falcone took home $1.7 billion in compensation that year while an epidemic of foreclosures and upside down mortgages was just getting started.

In late 2008, when the economy was in free-fall, Falcone suspended or limited withdrawals from his largest funds, upsetting investors who couldn’t get their money out. But Falcone reportedly gave special treatment to certain large investors (sources say Goldman Sachs is among them) who were able to clear out their exposed accounts before the losses piled up.

By 2009, Falcone was again making money — so much he vastly underestimated his federal and state tax bills. What’s a cash-strapped billionaire to do? Quietly loan himself $113.2 million from one of his investment funds at a favorable interest rate and keep it a secret from investors for five months. When they eventually found out, they were understandably disturbed. Falcone had barred those same investors from cashing out of the fund he borrowed from.

The Securities and Exchange Commission was not happy either and filed charges against Falcone.

“Today’s charges read like the final exam in a graduate school course in how to operate a hedge fund unlawfully,” Robert Khuzami, director of the S.E.C.’s division of enforcement, said in a statement. “Clients and market participants alike were victimized as Falcone unscrupulously used fund assets to pay his personal taxes, manipulated the market for certain bonds, favored some clients at the expense of others, and violated trading rules intended to prohibit manipulative short sales.”

Despite the publicity generated by the SEC, investors who appreciated Falcone’s ability to earn them money allowed them turn a blind eye to the ethics questions and pour money into Falcone’s latest venture — a wireless network known as LightSquared.

LightSquared was preparing to launch a unique nationwide 4G LTE mobile broadband network powered by satellites and ground-based cell towers, selling wholesale access to third-party wireless companies able to market the service under their own brand. Falcone’s funds poured nearly $3 billion dollars into the venture while getting a waiver from the government to operate high-powered transmitters on the “L” band — 1525-1559 MHz. LightSquared’s plans alarmed the next door neighbors — GPS satellites facing interference issues that would hurt the accuracy of precise location information provided to millions of tracking devices on the “L1” band — 1559 to 1610 MHz.

Initial testing showed that significant interference from the prototype ground-based transmitters would occur and potentially could cripple aviation and public safety GPS users. The FCC eventually withdrew permission for LightSquared to run its network as planned, a potential death-blow to the venture.

Creditors grew anxious wondering how LightSquared would be in a position to repay its loans when it was unable to launch its wireless network.

In May 2012, creditors forced the issue and LightSquared filed for bankruptcy protection, listing assets of $4.48 billion and debts of $2.29 billion. Falcone claimed the bankruptcy filing would give the company more time to overcome the FCC’s objections to its network operations plan. Falcone estimated it would take two years to secure a resolution. Analysts familiar with the FCC suggested Falcone might die of old age before the agency gave way.

Falcone’s subsequent efforts to win back control of the venture have been made more difficult because one man has been quietly buying up large amounts of LightSquared’s debt with designs on the venture’s spectrum.

Dish Networks’ Charles Ergen

With LightSquared’s debt trading at around 50 cents on the dollar, Charlie Ergen went shopping.

Ergen has been involved in the satellite business for decades. Today, he controls and runs Dish Network, a satellite television provider that has seen the back of high customer growth. Dish and DirecTV are both locked out of the “triple play” business most cable and phone companies offer customers. Neither company can offer broadband or telephone service without partnering with another provider. As cord-cutting continues to take hold, customers willing to pay for increasingly expensive television packages are in decline. That likely explains Ergen’s interest in acquiring wireless spectrum — to build Dish into a broadband, television, and telephone service provider.

In May, Dish publicly bid $2.2 billion for certain spectrum assets from LightSquared. But for more than a year earlier, Ergen was quietly buying up LightSquared’s debt through holding companies and hedge funds.

Ergen created an opaque investment entity named “SP Special Opportunites, LLC” a/k/a “Sound Point” to buy LightSquared debt. Separately, Ergen asked Stephen Ketchum, a former investment banker with close ties to Ergen, to buy over $1 billion in LightSquared debt securities through Ketchum’s hedge fund. From April 2012 until May 2013, Sound Point allegedly spent $1,013,082,326.30 to purchase secured debt for Ergen’s personal benefit and without the knowledge of Dish or its board of directors. Secured debt held by creditors is paid first in a bankruptcy proceeding, and Ergen quietly because LightSquared’s largest single secured creditor.

That puts Charlie Ergen in a major ethical dilemma.

The more Dish offers to pay for LightSquared, the more money Ergen will be paid to cover the shares of LightSquared’s secure debt. Ergen has a controlling interest in Dish, which means he can order Dish to overpay for LightSquared, personally pocketing the proceeds.

Bloomberg’s Matt Levine explains the shady deal:

“An executive going around and buying up an asset for cheap, then convincing his company to buy all of that asset for a higher price – doesn’t come up a lot because it’s so obviously shady,” Levine wrote. “If you’re supposed to be devoting your time and energy to finding opportunities for your company, it looks pretty bad to steal those opportunities for yourself.”

Falcone was outraged when he learned of Ergen’s stealthy acquisitions.

Ergen

In July, Harbinger accused Ergen of “fraudulently” becoming a creditor to block efforts by LightSquared to reorganize and emerge intact from bankruptcy. Instead, Harbinger accused Ergen of seeking to acquire the company’s assets “on the cheap.” Harbinger also points to provisions in a LightSquared debt agreement that forbids certain competitors from buying the company’s debt.

Also upset are several major Dish Network shareholders who are not pleased Ergen’s private deal could make him a lot of money while costing shareholders plenty should Dish overpay for LightSquard’s assets or worse, end up with everything but the spectrum Dish covets.

At least five lawsuits have been filed since August, accusing Ergen and other board members of casting their fiduciary duties to the wind and wasting money along the way. They are also upset Ergen and his connections purchased $1 billion in LightSquared debt at a substantial discount and will likely be repaid the full face value of those debts with Dish Network’s money. That means nearly $300 million in personal profits for Ergen.

The latest shareholder lawsuit was filed by the Louisiana Municipal Police Employees’ Retirement System. It along with the suit filed by the City of Daytona Beach Police Officers’ and Firefighters’ Retirement System claim Ergen’s near-total control of Dish’s board of directors makes it impossible for the board to meet its obligation of representing shareholder interests first.

“Ergen’s control over the company and the board is highlighted by the numerous transactions he has caused Dish to enter into with members of his family,” the lawsuit states.

Ergen and Dish’s efforts to insulate themselves from charges of conflict of interest didn’t fly with many investors.

One lawsuit noted Tom Ortolf, one of the directors on the supposedly independent committee reviewing Dish’s bid, has a daughter that works at Dish; the other, George Brokaw, chose Mr. Ergen’s wife, Cantey Ergen—a Dish director named in the shareholder suit—to be the godmother of his son.

The discomfort level at Dish reached high enough to prompt one board member, Gary Howard, to suddenly resign in early September. Howard was also on the committee formed to vet the LightSquared deal because of the potential conflict of interest on Ergen’s part.

Before Falcone could claim the high road at Ergen’s expense, this week New York’s top financial regulator banned Falcone from managing Fidelity & Guaranty Life Insurance Company of New York for seven years. Harbinger Group bought Fidelity & Guaranty, the U.S. life and annuity unit of London-based Old Mutual Plc, for $350 million in 2011.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg LightSquared 9-5-13.flv[/flv]

Bloomberg News discusses the high drama between LightSquared and Dish Network. (4 minutes)

Phillip “Every other 2008 spectrum bidder except U.S. Cellular has since sold its winnings to AT&T or Verizon Wireless or has never provided competitive service” Dampier

AT&T is unhappy with a proposal from a wireless competitor it originally tried to buy in 2011 that would offer smaller competitors a more realistic chance of winning favored 600MHz spectrum vacated by UHF television stations at a forthcoming FCC auction.

T-Mobile’s “Dynamic Market Rule” proposal would establish a cap on the amount of spectrum market leaders AT&T and Verizon Wireless, flush with financial resources for the auction, could win.

“Imposing modest constraints on excessive low-band spectrum aggregation will promote competition, increase consumer choice, encourage innovation, and accelerate broadband deployment,” T-Mobile offered in its proposal to the FCC.

Without some limits, wireless competitors Sprint and T-Mobile, among other smaller carriers, could find themselves outbid for the prime spectrum, well-suited for penetrating buildings and requiring a smaller network of cell towers to deliver blanket coverage.

In a public policy blog post today, AT&T argues T-Mobile is behind the times and its proposal is unfair and unworkable:

First, the purported advantage of low band spectrum – that it allows more coverage and better building penetration with fewer cell sites – has been overtaken by marketplace realities under which capacity not coverage drives network deployment.  Carriers deploying low band and high band spectrum alike must squeeze as many cell sites as they can into their networks to meet exploding demand for data services.  Second, to the extent this is less the case in rural areas, those areas are not spectrum-constrained and the lower cost of building out low band spectrum in such areas is offset by the higher cost of the spectrum itself.

[…] But this is not the only point that should concern policymakers.  Such caps will also suppress auction revenues, potentially to the point of auction failure, ultimately reducing the amount of spectrum freed up for mobile broadband use and undermining the auction’s ability to meet critical statutory goals.

[…] Even if T-Mobile’s proposal did not result in complete auction failure, its proposed caps would suppress auction revenues, reducing the amount of spectrum freed up for mobile broadband use as well as funds generated for FirstNet and to pay down the national debt.  That is because strict limits on participation by otherwise qualified bidders will make the auction less competitive and will yield less revenue.  Indeed, if T-Mobile’s proposed spectrum cap was strictly enforced, Verizon estimates it would be barred from bidding in 7 of the top 10 markets.  AT&T would face similar bidding limitations, as noted in our filing.

AT&T suggests the last major auction in 2008 attracted 214 qualified bidders and 101 bidders won licenses, including carriers of all sizes and new entrants.

But an analysis by Stop the Cap! shows the breakaway winners of the 2008 auction were none other than AT&T and Verizon Wireless, which paid a combined $16.3 billion of the total $19.592 billion raised. For that money, they acquired:

• Block A – Verizon Wireless and U.S. Cellular both bought 25 licenses each. In this block, Verizon targeted urban areas, while U.S. Cellular bought licenses primarily in the northern part of the U.S., where it provides regional cellular service. Cavalier Telephone and CenturyTel also bought 23 and 21 licenses, respectively. Cavalier Telephone is now wholly owned by Windstream, which does not provide cell service and was selling its 700MHz spectrum to none other than AT&T. So is CenturyLink (formerly CenturyTel).

• Block B – AT&T Mobility was the biggest buyer in the B block, with 227 licenses totaling $6.6 billion. U.S. Cellular and Verizon bought 127 and 77 licenses, respectively. AT&T Mobility and Verizon Wireless bought licenses around the country, while U.S. Cellular continued with its strategy to buy licenses in its home network northern regions.

• Block C – Of the 10 licenses in the C Block, Verizon Wireless bought the 7 that cover the contiguous 48 states (and Hawaii). Those seven licenses cost Verizon roughly $4.7 billion. Of the other three, Triad Communications — a wireless spectrum speculator — bought the two covering Alaska, Puerto Rico and the U.S. Virgin Islands through its Triad 700, LLC investor partnership, while Small Ventures USA, L.P. bought the one covering the Gulf of Mexico. Triad 700, LLC sold its spectrum last fall to AT&T while Small Ventures USA sold theirs to Verizon Wireless.

• Block E – EchoStar spent $711 million to buy 168 of the 176 available Block E licenses. This block, made up of unpaired spectrum, will likely be used to stream television shows. Qualcomm also bought 5 licenses. Neither company has used its spectrum to offer any services five years after the auction ended.

So much for improving the competitive landscape of wireless. Other than U.S. Cellular, which is rumored to be on AT&T and Verizon Wireless’ acquisitions wish list, every auction winner has either sold its spectrum to the wireless giants or has done nothing with it.

If “highest bidder wins”-rules apply at the forthcoming auction, expect more of the same.

AT&T and Verizon Wireless have significant financial resources to outbid Sprint, T-Mobile and smaller carriers and will likely win the bulk of the available spectrum whether they actually need it or not. Smaller victories may be won by smaller competitors, but only in rural areas and sections of the country disfavored by the largest two.

Analysts were surprised at the premium price AT&T agreed to pay when it announced last month it was acquiring Leap Wireless — owner of the Cricket brand prepaid cell phone service — for $1.2 billion plus assuming $2.8 billion in net debt. But newly released documents show AT&T will win significant tax concessions allowing it to shelter hundreds of millions in revenue from the tax man.

In fact, the more Leap Wireless piles up debt and hemorrhages customers, the more AT&T’s taxes go down.

If AT&T wins approval for its deal to take over Cricket’s dwindling customer base, wireless spectrum, and the company’s existing wireless network, it will receive 20 years of tax savings from “pre-change” losses, offering AT&T a tax shelter worth $155 million in taxable income a year. That means AT&T will see at least a $60 million reduction in its tax bill each of the first five years after the deal is approved. Then the savings decrease somewhat for the next 15 years as AT&T gets to write off $35 million annually.

Despite Cricket’s efforts to promote its bundled music and prepaid cell services as an industry game-changer, customers did not agree.

On Thursday, Leap admitted Cricket lost $163 million, or $2.09 per share, on revenue of $731 million for the quarter ended June 30. The company also saw 18 percent of its customers leave over the past year, with 4.8 million remaining. Leap management admitted it was becoming increasingly difficult to compete because its network was smaller than its larger competitors and Cricket had trouble acquiring the hottest smartphones to sell to customers.

Leap has been peddling Cricket on the wireless market since 2009 with no takers, even after it began to slowly pursue a network upgrade to 4G LTE service that was more promise than reality. Recent disclosures show the company lacked the money to expand more quickly.

AT&T still showed little interest in the little carrier that couldn’t over the course of 2012.

In May, as T-Mobile closed in on its takeover of similarly sized MetroPCS, things changed. AT&T ended up being the sole bidder for Cricket, offering $9.50 a share.

AT&T raised its offer to a whopping $15 a share after Leap executives promoted Cricket as a useful brand for AT&T to improve its standing in the prepaid market. But executives also sold AT&T on the fact Leap was lousy in debt, which opened up significant tax savings opportunities for AT&T.

BTIG Research’s Walter Piecyk thinks AT&T is shelling out a lot for Leap, even after considering the tax and spectrum benefits. But more than anything else, AT&T may have been willing to pay a premium for Cricket just to make sure none of its competitors, particularly T-Mobile, got there first.

The deal still requires approval by the Federal Communications Commission with a likely weigh-in from the Department of Justice’s Antitrust Division.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg ATT Buys Leap Wireless Who Wins 7-15-13.flv[/flv]

Moffett Research senior research analyst Craig Moffett tells Bloomberg News AT&T’s acquisition of Leap Wireless sticks it to competitors, in particular T-Mobile. AT&T’s purchase blocks T-Mobile and other carriers from getting access to Cricket’s wireless spectrum. Moffett also talks about the trend towards wireless mergers and acquisitions and how Verizon and AT&T got stuck with unwanted, unsold iPhones that could cost the companies millions. (6 minutes)

Would you be surprised to learn a company with just a basic, outdated website replete with spelling and grammar errors holds at least 760 television station construction permits and licenses and just wrote a check for $46.5 million to buy 52 more stations from nine different owners, with plans to shut every last one of them down in the future?

That is precisely the business plan of “Landover Wireless Corp.” and its series of limited liability corporate entities, which are grabbing up as much UHF television spectrum they can apply for across the country.

They are not alone.

CTB Spectrum Services, a company associated with Landover 2 LLC, has 356 UHF TV construction permits/licenses. Its website offers slightly more information about its operations, but not much.

DTV America, a mysterious Sunrise, Fla.-based venture with an official mailing address of 12717 W. Sunrise Boulevard (Suite 372) has its headquarters inside a private mailbox at a UPS Store. The company also has countless requests for television licenses on the UHF dial. DTV America manager John Kyle is also listed as chairman and president of The Pharmacy Television Network, which appears to broadcast its programming on video displays inside pharmacies. DTV America has the lowest profile of all three companies, with no apparent website.

And you thought over the air television was dead.

DTV America’s home is inside a mailbox at the UPS Store in Sunrise, Fla.

A number of low power television owners are surprised to see the sudden rush to launch more than 1,000 new television stations across the country, particularly in rural markets that have been considered a financial dead-end for low power television. Being in the LPTV business and making a living at it often depends on whether a local cable company or satellite dish provider will pick up and relay the station to the majority of Americans that do all of their television viewing on a paid platform. Without this carriage, low power television outlets have several strikes against them: challenging reception from operating with relatively low power, the lack of compelling programming — many of these outlets air paid religious, home shopping, music, or infomercial programming 24 hours a day, and the lack of familiarity by viewers who may not realize these stations are on the air.

From information Stop the Cap! has obtained, none of these ventures actually intend to stay in the over-the-air television business. Instead, they are using FCC licensing rules to get valuable UHF spectrum without having to bid for it at forthcoming spectrum auctions. At least two of the companies claim they are raising capital to build a unicast 4G wireless content delivery network. But some critics contend they are actually spectrum squatters — speculators that have no intention of building anything. Instead, critics charge they will conduct minor experiments to effectively stall the FCC, hanging onto their permits and licenses until they can sell their holdings to a wireless provider hungry for 500-700MHz spectrum and willing to pay top dollar to get it.

Meanwhile, Landover’s $46.5 million buys them dozens of low power stations airing 30-minute commercials like “Skin Solutions by Dr. Graf.” The company claims it will keep those stations on the air until their wireless network is ready, and then the infomercials (along with the rest of the television programming) will be gone for good. Landover also managed to acquire larger Class A TV stations as part of the deal, including one each in Las Vegas and Sacramento, and three in Texas. These stations might become part of the company’s 4G network, sold off or compensated to sign-off forever as part of forthcoming “spectrum packing” by the FCC — further shrinking the UHF TV dial and auctioning off the “excess” spectrum to AT&T, Verizon, Sprint, and other cell companies.

CTB’s License Map

CTB also holds multiple TV licenses in several of its markets. The company claims it will combine those stations together in something akin to a high-powered cellular network to create a bigger wireless data pipe using “patent pending multi-frequency cellular terrestrial network technology [that] increases capacity by hundreds of times through frequency re-use, while also enabling full mobility, broadband Internet, and location-based services.”

CTB’s sales pitch claims its TV licenses offer up to 228MHz of bandwidth that is “essentially identical to 700MHz spectrum, but can be acquired at a fraction of the cost.” The company also claims it has exclusive rights to TV “White Space” spectrum via first adjacent channels, which are treated like guard bands to protect against interference from nearby stations.

All of these companies are applying for channels largely in low-interest rural markets, where they face few challenges from competing applicants. CTB calls this part of their rural “corridor” strategy. One such corridor covers stations in a line from Wisconsin west to Idaho.

All three companies are betting the FCC will allow them to eventually convert their over-the-air television licenses into wireless data networks, or let them sell the spectrum to deeper pocketed players in keeping with the Commission’s plan to open up more frequencies for data-hungry users. If the FCC allows it, these three entities will end up with the rights to prime wireless spectrum covering up to 90 percent of the country without having to spend a penny at forthcoming spectrum auctions.

But there are financial risks. The type of low power station licenses held by most of these companies do not get them a seat at the spectrum packing table. LPTV outlets are considered low-priority stations, and in larger communities, many could be forced off the air without compensation to make enough room for more important, full power stations.

No license, no 4G data network for Landover, CTB and others. But the chances of that happening in rural markets, where residents are lucky to have two or three over the air stations, are slim.

The technology might offer unique broadband opportunities for rural areas where conventional low-range cell towers are too expensive, if the technology works. A higher powered transmitter serving a rural, larger geographic area might prove financially attractive in low population density areas. Only time will tell if any of these entities will be able to raise the capital needed to fulfill the FCC’s construction permit obligations, which give owners just a few years to get their stations on the air or face forfeiture of their permit and/or license.