Spencer Kurn, an analyst for New Street Research recently reported on how various market players plan to use the 3.5 GHz CBRS spectrum recently approved by the FCC. I described the FCC’s order in this recent blog. As a quick refresher, this is a large swath of spectrum and the FCC has approved 80 MHz of spectrum for public use and will be auctioning 70 MHz of the spectrum in 2020.

Cellular Bandwidth. Kurn notes that Verizon plans to use the new spectrum to beef up 4G bandwidth now and eventually 5G. Verizon plans to use the spectrum in dense markets and mostly outdoors. Cable companies like Comcast and Charter that have entered the wireless business are also likely to use the spectrum in this manner.

I’ve been writing for a while about the crisis faced by cellular network. In urban areas they are seeing broadband usage double almost every two years and keeping up with that growth is a huge challenge. It’s going to require the combination of new spectrum, more cell sites (mostly small cells), and the improvements that come with 5G, mostly the frequency slicing.

It’s interesting that Verizon only sees this as an outdoor solution, but that makes sense because this spectrum is close in characteristics as the existing WiFi bands and will lose most of its strength in passing through a wall. It also makes sense that Verizon will only do this in metro areas where there is enough outdoor traffic for the spectrum to make a difference. I’ve seen several studies that say that the vast majority of cellular usage is done indoors in homes, businesses, and schools. But this spectrum still becomes one more piece of the solution to help relieve the pressure on urban cell sites.

For this to be of use the spectrum has to be built into cellular handsets. Apple recently announced that they are building the ability to receive Band 48 of CBRS into their new models. They join the Samsung Galaxy S10 and the Google Pixel 3 with the ability to use the spectrum. Over time it’s likely to be built into many phones, although handset manufacturers are always cautious because adding new spectrum bands to a handset increases the draw on the batteries.

Point-to-Multipoint Broadband. Numerous WISPs and other rural ISPs have been lobbying for the use of the spectrum since it can beef up point-to-multipoint broadband networks. These are networks that put a transmitter on a tower and then beam broadband to a dish on a subscriber premise. This technology is already widely in use mostly using the 2.4 GHz and 5.0 GHz WiFi spectrum. Layering on CBRS will beef up the broadband that can be delivered over a customer link.

It will be interesting to see how that works in a crowded competitive environment. I am aware of counties today where there are half a dozen WISPs all using WiFi spectrum and the interference degrades network performance for everybody. There are five SAS Administrators named by the FCC that will monitor bandwidth usage and who also will monitor interference. The FCC rules don’t allow for indiscriminate deployment of public CBRS spectrum and we’ll have to see how interference problems are dealt with.

One interesting player in the space will be AT&T who intends to layer the frequency onto their fixed wireless product. AT&T widely used the technology to meet their CAF II buildout requirements and mostly has used PCS spectrum to meet the FCC requirement to deliver at least 10/1 Mbps speeds to customers. Adding the new spectrum should significantly increase rural customer speeds – at least for those with a few miles of AT&T towers.

Cable Company Edge-out. The most interesting new players considering the market are the cable companies. Kurn believes that the big cable companies will use the spectrum to edge out to serve rural customers with fixed wireless around their existing cable networks. He says the cable networks could theoretically pass 6 – 7 million new homes if this is deployed everywhere. This is an ideal application for a cable company because they typically have fiber fairly close the edge of their service areas. The point-to-point wireless product operates best when the radios are fiber-fed and cable companies could deliver a product in the 50-100 Mbps range where they have line-of-sight to customers.

We’ve already seen one cable company tackle this business plan. Midco was awarded $38.9 million in the CAF II reverse auctions to deploy 100 Mbps broadband in Minnesota and the Dakotas. Midco is going to need this spectrum, and probably even more to deliver 100 Mbps to every customer. Their deployment is not really an edge-out, and the company plans to build networks that will cover entire rural counties with fixed wireless broadband.