AT&T’s Chicago problem: Why LTE slows down in the Windy City

AT&T’s(s t) new LTE network is blazing fast, with recent nationwide studies showing Ma Bell Mobile is beating out archrival Verizon(s vz)(s vod) when it comes to bandwidth punch. But independent network tester RootMetrics just released a new Chicago report finding that AT&T’s typical 17 Mbps-plus speeds are more than halved in the Windy City. The report highlights a problem AT&T has with several of its markets: it doesn’t have the spectrum in place to offer the big fat pipe it offers in the rest of the country.

Root’s study, which uses a combination of drive and indoor testing as well as crowdsourced data, clocked average downlink speeds on AT&T’s Chicago network at 7.6 Mbps and upload speeds at 4 Mbps. In a recent analysis of 15 major markets Root conducted for GigaOM, the firm found that AT&T was delivering the an average of 17.4 Mbps downstream and 8 Mbps upstream.

That severe drop-off in Chicago is explained by the fact that AT&T has only 10 MHz of 700 MHz spectrum in Chicago while it has 20 MHz in most markets, allowing it to match Verizon hertz for hertz. T-Mobile’s dual-carrier HSPA+ network was almost able to match AT&T’s LTE download performance, though AT&T still won out easily when it came to sending packets the other direction.

Chicago isn’t the only market where AT&T is capacity constrained. Root found an even bigger drop off in speeds in Los Angeles earlier this year. GigaOM contributor and spectrum policy wonk Andrew Shepherd looked at AT&T’s spectrum holdings in its 2012 launch markets, finding that AT&T also is limited to 10 MHz in Oklahoma City; Athens, Ga.; Charlotte and Raleigh-Durham-Chapel Hill, N.C.; San Juan, Puerto Rico, and in a handful of smaller markets in Texas and Indiana.

What does it all mean? While AT&T may lose its “fastest network” bragging rights in the spectrum-constrained cities, it’s still capable of delivering a stellar mobile broadband experience. In my own — admittedly unscientific – speed tests in Chicago’s north side and northwest suburbs, I experienced pretty consistent speeds in the city of nearly 6 Mbps down and nearly 4 Mbps up. When I got onto the freeway and out into the burbs those numbers improved considerably. Those links are fast enough to handle with ease anything you could do on a smartphone.

The bigger concern for AT&T is congestion. Its lesser spectrum holdings not only limit the connection to the device, but the overall capacity of its network. If Apple(s aapl) releases an LTE version of the iPhone this year, AT&T will fill up its networks in Chicago with LA with the new smartphones far more quickly than Verizon. Still, AT&T has plenty of recourse when it comes to capacity. It still hasn’t tapped into its Advanced Wireless Services (AWS) spectrum, which allows it to layer on much more bandwidth to its 4G networks. Also, AT&T is being more aggressive than most in pursuing new capacity-boosting technologies such as small cells and self-optimizing networks.

Chicago image courtesy of Flickr user Bert Kaufmann