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CTIA Presses for more 5G Spectrum

It’s no surprise that the CTIA – the lobbying arm of the cellular carriers is making a big pitch for getting more spectrum for 5G. At a recent hearing of the U.S. Senate Committee on Commerce, Science and Transportation, Meredith Attwell Baker, the president and CEO of the CTIA made a pitch to senators to provide significant amounts of new bandwidth for 5G.

Specifically, the CTIA wants access to 400 MHz of mid-band spectrum, which is a giant swath of spectrum. The FCC already plans to auction off 70 MHz of 3.5 GHz spectrum, but it’s going to take a lot more spectrum than that to satisfy the CTIA’s request. The FCC is considering what to do with the 3.7 GHz band which will be the next block being eyed by the wireless carriers.

Atwell Baker supported the need for spectrum by saying that the wireless carriers are poised to invest $275 billion in 5G-related networks which will create 3 million new jobs and add $500 billion to the economy. The CTIA claims that 1.3 million of those jobs and $274 billion of the benefit will come from mid-range spectrum. That overall 5G investment claim sounds crazy to me when put into context. I’ve seen several estimates that the cost to build fiber to everybody in the country ranges between $60 billion to $100 billion. Why would the cellular carriers spend so much for a 5G network if every home and business could have a fiber connection to everybody for a third of the 5G cost? It’s likely that the figures cited by Atwell Baker are overinflated, as seems to be everything claimed for 5G. The jobs number is also overinflated and likely represents labor years, not permanent jobs since most of the jobs benefit from 5G would be temporary while networks and equipment are built. 5G is not going to be adding many jobs to the cellular carriers, and in fact they have all been cutting employees recently. For example, Verizon announced layoffs last year of 44,000 workers – 30% of its workforce. Verizon is not going to be hiring back those 44,000 employees as a result of 5G, let alone hiring ‘millions’ of employees.

Don’t take my skepticism to mean that 5G is not an important innovation, but the 5G hype has been ludicrously extreme starting with Qualcomm’s claim that the implementation of 5G is more important to mankind than the implementation of electricity.

Now that I see the CTIA asking for 400 MHz of spectrum I’m starting to think that the 5G hype has been part of a long-term plan by the cellular carriers to grab more spectrum. The wireless industry’s overhyped claims about 5G make it sound mandatory to repurpose most of our mid-band spectrum for 5G, regardless of other needed uses of the spectrum. Maybe the 5G hype has been nothing more than a coordinated landgrab for spectrum.

Of course, the cellular carriers won’t get the spectrum for free and any new spectrum will be auctioned. But there are only a few serious bidders for the spectrum, and if the FCC really makes big swaths of spectrum available then each of the big carriers should be able to get all the spectrum they want for a reasonable price. There won’t be any need for the wireless carriers to bid up auction prices if the FCC is going to make 400 MHz of spectrum available over time.

My problem with this landgrab for spectrum is that it doesn’t consider the other ways that spectrum could benefit the economy. For example, if we set aside large swaths of spectrum for rural broadband we could have wireless products today that could deliver speeds of hundreds of Mbps.

Wireless ISPs have floated several suggested ways that the FCC can satisfy the cellular carriers while also being able to use the spectrum for rural broadband. One of the best ideas is spectrum sharing where spectrum can be used for 5G in metropolitan areas while being repurposed for wireless broadband in rural areas. Unfortunately, the big carriers don’t want the distraction of spectrum-sharing if it means it will inconvenience them. Alternatively, the FCC could set aside a slice of each mid-range block specifically for rural broadband. That’s is not as good for 5G or rural broadband as sharing spectrum – but it would still improve rural wireless broadband.

It’s a lot easier for the big carriers to invent a 5G spectrum crisis than it is to work out spectrum solutions that help the whole country. Apparently the 5G hype is working because politicians from the White House to state houses seem to have accepted the need to make 5G a priority, making it easier to let the FCC give spectrum to the cellular carriers with no strings and no obligations to share spectrum. The cellular carriers have already won the public relations and political war.

The problem with just handing the spectrum to the cellular carriers is that it will eliminate any meaningful push for sharing spectrum for many decades. That will mean decades where a lot of rural America will not get the speeds they need to be part of the modern economy. Like any new technical idea, we are just at the beginning of developing ways to share spectrum and I have no doubt that over time that we’ll find ways to minimize interference. But we’ll never get a shot to try it if Congress or the FCC buys the cellular carrier’s 5G hype.

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Regulation - What is it Good For?

The 3.5 GHz Tug-of-War

I’ve written a number of blogs this year that show how the current FCC is largely favoring the large carriers over small ones. The agency will soon be deciding how to handle the 3.5 GHz spectrum – and it appears that they are again likely siding with large cellular carriers over the rest of the market.

This is the spectrum that has generally been referred to as Citizen’s Band Radio, although it is not close in spectrum to the CB radios highlighted in every movie with a big rig truck. The FCC is currently reconsidering the rules adopted for this spectrum by the last FCC in 2015. The 2015 rules made this spectrum widely available to anybody who wanted to use it. The licenses for the spectrum were to be awarded for very small footprints, at the census tract – an area encompassing 2,500 to 8,000 people. The rules also gave anybody licensing a small footprint a one-year head-start over any larger company that wants to use the spectrum in the same area. This was a perceived boon for WISPs and others wanting to deploy the spectrum for rural broadband.

Small carriers want to use the spectrum because of the great operating characteristics. First, by being licensed it means less interference than using WiFi spectrum. The spectrum also can carry a signal a long distance from a tower and is less sensitive to line-of-sight issues as some other spectrum being used in rural areas.

However, these same characteristics make the spectrum attractive to the large cellular carrier for providing 4G LTE cellular broadband, and the big cellular companies want as much of this spectrum as they can get their hands on. It was lobbying by the CTIA, the lobbying arm of the big cellular companies that convinced the FCC to vote 4-1 last year to reconsider the rules for use of the spectrum.

The original FCC rules allowed for up to seven separate licenses in each census tract – with 74,000 census tracts that meant up to 500,000 separate licenses were possible. The new rules drastically reel in the number licenses. It would grant large footprint licenses in metropolitan areas and county-size licenses in the rest of rural America. There are 306 Metropolitan Statistical Areas (MSAs) and 3,200 counties – and under the new rules this reduces the number of licenses to 19,000.

Under the original rules small providers could bid for licenses that fit a small geographic foot print – a small town or a portion of a rural county. These small license areas are ideal for the business plans for rural providers like WISPs, telephone companies, electric cooperatives, cable companies, and even Internet of Thing providers. There were farming cooperatives considering the spectrum as an interference-free way to monitor smart-farm sensors.

The FCC is currently being lobbied by those on both sides of the issue. The large cellular carriers are represented by their lobbying arm, the CTIA. The smaller providers have banded together during the last few years under a loose umbrella called the CBRS Coalition. This includes many small wireless providers, but also some large corporations like Cox Communications, Edison Electric Institute, Exelon Corp., FedEx, General Electric Co., Motorola Inc., the Port of Los Angeles, Southern Linc, and Union Pacific Corp. The CBRS Coalition filed a compromise plan with the FCC that is in the middle between the old rules and the proposal from the CTIA. In a letter filed on May 9 this group asks to allow five licenses in each county and two licenses in each census tract.

We know from past experience that the spectrum owned by the big cellular companies goes largely unused in rural America. In a rural market they use a handful of the spectrum bands to support rural cellular service compared to the wide array of spectrum they use in urban areas. For various reasons the big wireless carriers seem to want to hoard spectrum rather than ever find themselves short.

In an ideal world the FCC would force big carriers to give back spectrum they never use, but we’ve never had an FCC that’s been serious about reclaiming unused spectrum. The large carriers don’t have plans to use most spectrum bands in rural areas but also don’t want to be bothered to defend their licenses – and so they fight any suggestions that unused spectrum should be returned to the FCC for use by somebody else.

We don’t know how the FCC will vote on this issue – but the fact that they opened the issue based upon a petition by the CTIA tells us their likely sentiment. So far this FCC has voted for the big carriers on every issue where there is a big company / little company tug of war. If the FCC follows their trend and votes for the CTIA petition, it will be another dagger stuck into the heart of rural broadband.

Categories
Regulation - What is it Good For?

Net Neutrality in the Courtroom

Barely two week after the release of the FCC’s new net neutrality rules there have been two lawsuits filed asking the courts to set aside the new rules. This is one of the quickest reactions to an FCC order that I can remember.

One petition was filed by the USTelecom Association with the US Court of Appeals for the District of Columbia. This is the trade group representing Verizon, AT&T, and other large telcos and ISPs. The second was filed with the US Court of Appeals in New Orleans by Alamo Broadband, a small ISP from Texas.

The lawsuits are a bit surprising because the FCC hasn’t yet published the new rules in the federal register, meaning that they are not yet in effect. There is a good chance that these two suits will be dismissed for being prematurely filed, but there is no doubt that these and other cases will be filed once the order has been officially published. It’s rumored that the CTIA plans to file an appeal on behalf of all of the large cable companies. Challenges by the trade groups will save AT&T, Verizon, and Comcast from having to challenge the FCC directly.

As expected, the suits challenge the FCC’s authority to impose Title II regulation on broadband. USTelecom refers to this as ‘utility-style regulation’, although the FCC provided forbearance on most of the regulatory requirements that apply to telcos and CLECs.

I’m not a lawyer, but I recall a lot of dismay in the industry when the FCC decided many years ago to classify the Internet as an information service rather than as a utility. My opinion is that all they have done by this ruling is to set straight the mistake they made years ago, and that they always have had the option to regulate the Internet under Title II. But of course, the courts are going to be the ones to decide the extent of the FCC’s jurisdiction.

One thing is clear, if these lawsuits succeed the FCC is basically out of options and net neutrality will probably be dead.

The final net neutrality rules are somewhat simple and straightforward and make four distinct points:

  • No Blocking. The order says there can be no blocking of transmissions of lawful content, although the order allows ISPs to refuse to transmit unlawful material such as child pornography or copyright-infringing materials.
  • No throttling. ISPs are not allowed to slow down content. This means that everything delivered to customers must have the same priority.
  • No Paid Prioritization. While this is similar to the no throttling rule, it applies more to the network between content providers and the ISPs and means that companies can’t arrange deals that provide for preferential treatment. They might still need to pay for interconnection, but they can’t use that process to gain an advantage over other content.
  • Case-by-case challenges. The FCC took an approach similar to Canada’s net neutrality rules, and rather than lay out a lot of specific net neutrality rules they will look at specific cases in the future that are brought to their attention. I think this is a wise choice because our networks and technology can change faster than any rules, and this process will allow net neutrality rules to keep up with changes in technology.

Assuming the courts allow the current rules to stand, that last rule means that net neutrality is never going to be finished. The intent of the three major rules are pretty clear, but as the FCC hears future cases they will be crafting more detailed rulings on specific topics. So, while there are no detailed restrictions in this order, over time a body of rules concerning net neutrality will grow as the result of rulings on challenges. This means that it’s likely there will always be lawsuits floating around on net neutrality topics.

I also foresee one other danger for net neutrality. Modifying net neutrality over time on a case-by-case basis will make the whole process subject to the whim of future FCC commissioners. In recent years the FCC has tended to bend and sway with changes in the administration, and so we may suffer through conflicting rulings from different FCC commissioners. But I guess before we worry too much about this we’ll have to wait a while to see if the courts allow these rules to stand.

 

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