FCC Wants to Change 3.5 GHz Spectrum Rules

The FCC voted last week to re-examine the rules for the deployment of 3.5 GHz spectrum for wireless broadband. This is the spectrum that has generally been referred to as Citizen’s Band Radio. This change clearly favors large carriers over the small carriers which were the targeted users from the existing rules.

The specific changes proposed by the rules include:

  • Lengthened the length of a license from 1 year to 10 years.
  • Eliminate the rules that the exclusivity of a license expires at the end of the first license term. Exclusivity can now extend into a license renewal.
  • Increase the size of the geographic footprint of a license. The license area before was a census tract, which is generally an area encompassing 2,500 to 8,000 people. The Census views a tract as the equivalent of a ‘neighborhood’. The new licenses areas are proposed to be something larger like entire counties or else Partial Economic Areas (PEAs). PEAs were defined in the recent incentive auctions and subdivide the country into 416 PEA regions.
  • Allows license holders to partition and disaggregate licenses between adjacent geographic areas.
  • Eliminated the rules that limited the number of licenses that can be held by one entity in an area. This also would allow license holders to bid on the use of individual channels.

What does all of this mean? This is largely a shift to allow big wireless carriers to obtain and use the spectrum for cellular service. Before the spectrum rules were aimed at benefiting small rural broadband providers. They would have been able to get a license for a small geographic area and they then got a 1-year head-start to deploy the spectrum before anybody else. The first licensee then had an advantage because future deployments had to be synchronized to not interfere with them.

The old rules made it difficult, but not impossible, for the bigger companies to use the spectrum. A cellular provider was not likely to invest in small license footprints and only be protected for a year from competition and interference. But the new rules allow for a much bigger footprint, similar to that used for other cellular spectrum. And the ten-year license provides a long-term opportunity for no competition, as well as a chance to renew the original license.

Basically this is a spectrum grab by the cellular providers to use for LTE or 5G cellular. Two of the big proponents of these changes include Comcast and Charter which want their own spectrum to support their new cellular businesses.

This change will make it much harder for rural deployments by WISPs and other ISPs willing to serve customers with wireless connections. The original rules also envisioned that this spectrum would enable smaller carriers to deploy various small-cell technologies and not just point-to-multipoint radios.

This is another proposed ruling that shows that current FCC is now clearly pro-big business. Almost every ruling they’ve made so far benefits big companies – the big ISPs, the big TV station owners, and the big wireless carriers. This particular ruling is a big give-away to the cellular companies and to Comcast and Charter. Under the rules the spectrum can be licensed inexpensively compared to spectrum that is auctioned. The new rules allowing large coverage areas will greatly disadvantage small carriers that only want to license a small service area – which was the entire purpose of the original rules for the spectrum.

The FCC voted 4-1 to consider the new rules, which is a likely indication that the new rules will be adopted after the required deliberation time required by FCC rules.

Wireless Trends for 2017

Wi-FiToday I look at wireless trends for 2017. While most of my clients are small landline carriers, the wireless industry has a lot of impact on every ISP these days.

New Spectrum for Rural Broadband. The FCC should release spectrum at the end of the current Incentive Auction that can be used for rural broadband. This would be a slice of spectrum that used to be occupied by UHF television stations and that is being referred to as ‘white space’ spectrum. The beauty of this spectrum for rural broadband is that it will travel significantly far from a tower and will penetrate most obstacles that stop other spectrum. This spectrum has been allotted to only a few carriers under experimental licenses and so it might be a few years until affordable gear is ready for the market – but this would be a great tool for reaching remote customers.

New WiFi. The FCC should also finally release new WiFi in the 3.5 GHz band. This bandwidth will be available through a new spectrum sharing arrangement that will make it available to carriers while giving first priority to existing government and satellite users of the spectrum. But it’s a broad swath of 150 MHz and within a few years will add to the capacity of wireless point-to-multipoint networks. If the spectrum-sharing rules being used for 3.5 GHz work well, expect to start seeing sharing with other spectrum. This would be a great change for everybody and would spectrum owners on the notice that they have to either use or share spectrum and they can’t sit on it and let it go unused.

LTE Replaces Rural Copper. This is the year when we will start to really see AT&T and Verizon tearing down rural copper networks and forcing rural customers onto 4G LTE. What will never stop amazing me is that the FCC is paying for a lot of this from the CAF II fund.

Zero Rating Will Be Big. Expect all of the cellular carriers to aggressively adopt zero-rating, which is where they will provide their own video products to customers without it counting against cellular data caps. Zero-rating is not allowed under net neutrality rules, but it’s clear that the new FCC will soon reverse those rules.

Zero-rating is a really mixed bag. It will certainly be a boon to customers who don’t mind getting locked into big company bundles – for instance, an AT&T cellular customer might be able to watch unlimited DirecTV Now (but not Netflix) on their cellphone. But zero-rating also is glaring proof that wireless data caps are all about the extra revenue and not about bandwidth issues since the wireless carriers will open up wireless data pipes wide for those willing to pay them a lot of money.

There Will Be Huge 5G Hype. Expect the wireless companies and the press to talk about nothing but 5G. We will hear all year how the technology is being tested and how it’s right on the horizon. And all of the press releases won’t make any distinction between 5G cellular and 5G indoor gigabit wireless. So the general public will end 2017 mistakenly thinking that they will soon have gigabit cellphones.

There Will Be New Wireless Choices. Expect Comcast to launch their wireless product in a few test markets this year. Charter will also be closely watching those trials. Also don’t be surprised if Sprint or T-Mobile are bought by companies wanting to get into the cellular business. A really crazy rumor I read had Verizon merging with Comcast – but honestly nothing would surprise me any more with big company mergers.

WiFi Calling from Cellphones. There will be a big short this year as more and more calls will be made from cellphones directly over WiFi networks. Google Project Fi and Republic Wireless started this trend in 2016 and many others, including the big cell providers will join the trend.