Rather than connecting directly to telco networks via 3G-enabled tablets, users are avoiding the heavy price tag of these tablets and falling back on Wi-Fi models that make use of ubiquitous coverage in their area. According to research firm IDC's "A/NZ Quarterly Media Tablet and eReader Tracker" report, Wi-Fi-only tablets outdid Wi-Fi/3G tablets in the fourth quarter of last year in terms of the number of shipments.
Telstra appears to be betting on this trend to continue in the 4G space, with its 4G wireless hotspot that will launch next Tuesday for consumers. The hotspot provides users with the means to bring their Wi-Fi-only devices to the LTE network.
It is one of the only ways that owners of the new iPad will be able to connect to the faster LTE network, since the iPad doesn't currently support LTE out of the box due to a difference in spectrum bands across the globe.
IDC's report further pointed to the lack of low-priced tablets in the market as a reason for why people are purchasing Wi-Fi-only models.
Even though all the wireless operators who bought spectrum in the 700 MHz auction are using spectrum from the same band, they each use different pieces of it. Rural carriers tend to hold licenses in the lower half of the block, and AT&T also owns some of this spectrum thanks to its bandwidth deal with Qualcomm.
There are all kinds of potential interference issues in this lower portion of the spectrum. But regional carriers want the FCC to make sure that the chipsets for their services are compatible with chipsets for AT&T's service. Otherwise, these smaller carriers say they won't have the volume necessary for handset makers to make devices for their networks. It also means that their customers wouldn't be able to roam onto AT&T's network unless their devices had additional radio technology included.
AT&T has argued in the past that the interference issues are too great and that devices cannot be forced to use the same exact radio technology that will operate across the entire lower portion of the 700 MHz band of spectrum.
So the FCC is looking into whether there's a solution that settles AT&T's interference concerns while also ensuring that smaller carriers can offer competitive handsets and roaming.
AT&T said in a statement after the vote that it "welcomes this proceeding to the extent that it offers an opportunity to find real solutions to the real interference and deployment challenges in the band." But the carrier still claims that a mandatory interoperability requirement would be a mistake.
"Such mandates would be an unprecedented regulatory intrusion into a carrier's right to manage network and device deployment in a manner best suited to serve its customers," Joan Marsh, a vice president of regulatory affairs at AT&T, said in a statement.
Finally, the FCC took up a notice of inquiry from the NTIA, which is proposing to reallocate spectrum at 1695-1710 MHz from government to commercial use. This proceeding will help the FCC determine how it can best use this spectrum.