Femtocells Instead of Small Cells?

I have just seen the future of broadband and it does not consist of building millions of small 5G cell sites on poles. CableLabs has developed a femtocell technology that might already have made the outdoor 5G small cell site technology obsolete. Femtocells have been around for many years and have been deployed in rural areas to provide a connection to the cellular network through a landline broadband connection. That need has largely evaporated due the ability to use cellphones apps to directly make WiFi calls.

The concept of a femtocell is simple – it’s a small box that uses cellular frequencies to communicate with cellular devices that then hands-off calls to a landline data connection. Functionally a femtocell is a tiny cell site that can handle a relatively small volume of cellular calls simultaneously.

According to CableLabs, deploying a femtocell inside a household is far more efficient that trying to communicate with the household from a nearby pole-mounted transmitter. Femtocells eliminate one of the biggest weaknesses of outdoor small cell sites – much of the power of 5G is lost in passing through the external walls of a home. Deploying the cellular signal from within the house means a much stronger 5G signal throughout a home, allowing for more robust 5G applications.

This creates what I think is the ultimate broadband network – one that combines the advantages of a powerful landline data pipe combined with both 5G and WiFi wireless delivery within a home. This is the vision I’ve had for over a decade as the ultimate network – big landline data pipe last mile and powerful wireless networks for connecting to devices.

It’s fairly obvious that a hybrid femtocell / WiFi network has a huge cost advantage over the deployment of outdoor small cell sites on poles. It would eliminate the need for the expensive pole-mounted transmitters – and that would eliminate the battles we’re having about the proliferation of wireless devices. It’s also more efficient to deploy a femtocell network – you would deploy only to those homes that want to the 5G features – meaning you don’t waste an expensive outdoor network to get to one or two customers. It’s not hard to picture an integrated box that has both a WiFi modem and a cellular femtocell, meaning the cost to get 5G into the home would be a relatively cheap upgrade to WiFi routers rather than deploying a whole new separate 5G network.

There are significant benefits for a home to operate both 5G and WiFi. Each standard has advantages in certain situations within the home. As much as we love WiFi, it has big inherent weaknesses.  WiFi networks bogs down, by definition, when there too many devices calling for a connection. Shuttling some devices in the home to 5G would reduce WiFi collisions and makes WiFi better.

5G also has inherent advantages. An in-home 5G network could use frequency slicing to deliver exactly the right amount of bandwidth to devices. It’s not hard to picture a network where 5G is used to communicate with cellphones and small sensors of various types while WiFi is reserved for communicating with large bandwidth devices like TVs and computers.

One huge advantage of a femtocell network is that it could be deployed anywhere. The cellular companies are likely to cherry pick the outdoor 5G network deployments only to neighborhoods where the cost of backhaul is affordable – meaning that many neighborhoods will never get 5G just like many neighborhoods in the northeast never got Verizon FiOS. You could deploy a hybrid femtocell to one customer on a block and still be profitable. Femtocells also eliminate the problems of homes that won’t have line-of-sight to a pole-mounted network.

This technology obviously favors those who have built fast broadband – that’s cable companies that have upgraded to DOCSIS 3.1 and fiber overbuilders. For those businesses this is an exciting new product and another new revenue stream to help replace shrinking cable TV and telephone networks.

One issue that would need to be solved is spectrum, since most of it is licensed to cellular companies. The big cable companies now own some spectrum, but smaller cable companies and fiber overbuilders own none. There is no particular reason why 5G inside a home couldn’t coexist with WiFi, with both using unlicensed spectrum, with some channels dedicated to each wireless technology. That would become even easier if the FCC goes through with plans to release 6 GHz spectrum as the next unlicensed band. The femtocell network could also utilize unlicensed millimeter wave frequency.

We’ll obviously continue to need outdoor cellular networks to accommodate roaming voice and data roaming, but these are already in place today. Rather than spend tens of billions to upgrade those networks for 5G data to homes, far less expensive upgrades can be made to augment those networks only where needed rather than putting multiple small cells on every city block.

It’s been my experience over forty years of watching the industry that in the long run the most efficient technology usually wins. If CableLabs develops the right home boxes for this technology, then the cable companies will be able blitz the market with 5G much faster, and for a far lower cost than Verizon or AT&T.

It would be ironic if the best 5G solution also happens to need the fastest pipe into the home. The decisions by big telcos to not deploy fiber over the last few decades might start looking like a huge tactical blunder. It looks to me like CableLabs and the cable companies might have found the winning 5G solution for residential service.

FCC Small Cell Order – Timelines and Fees

Yesterday’s blog looked at the preemption issues in the FCC’s new ruling concerning small cell deployment on utility poles, light poles, buildings and other infrastructure. The order is WT Docket No. 17-79; WC Docket No. 17-84 and was approved on September 27. Today I’ll look at the rest of the order concerning timeline and fees.

The new rules establish a ‘shot clock’ for the local review of small cell deployments. The FCC established similar shot clocks in 2009 for the deployment of the traditional cell tower deployments. They said then that localities had to review an application for collocating cellular infrastructure within 90 days and gave localities 150 days to review an application for placing a new cellular tower. Cities were free to reject requests if an application failed to meet local regulations and the shot clock defined the time during which a locality had to provide a response to a cellular carrier.

The FCC just set a shorter shot clock for small cell deployment, and localities now have 60 days to process an application for collocation of small cell equipment on a facility that already has similar infrastructure and 90 days to review an application for a new placement. Interestingly, in the case of small cells, those time lines are likely reversed. Cities probably have more concerns about placing multiple small cells on the same pole, yet that situation has the shortest time frame for review.

Numerous cities intervened in the docket and argued that small cell devices are not necessarily ‘small’. While many devices are the size of a pizza box (the example used by the FCC), there have been requests to place cabinets nearly the size of refrigerators on poles. The FCC resolved these issues by defining devices covered by the new rules as ‘Small Wireless Facility’ that must meet the following parameters: the pole or structure can’t be greater than 50 feet tall; the small cell device can’t add more than 10% to the height of an existing structure; the equipment can’t be larger than 28 cubic feet (excluding antennas) and an antenna can’t be more than 3 cubic feet. This limits the devices to boxes that are just a hair larger than a 3 X 3 X 3 foot cube.

The FCC also suggested limits on the fees that a city can charge for access to rights-of-way. They suggest application fees be no more than $500 per application that can include up to five small cell devices, with an additional $100 per small cell after five. The FCC also suggested a fee limit of $270 per year per small cell to cover any recurring fees including rights-of-way. The new rules say that carriers can’t challenge rates at or below these suggested limits.

The FCC new rules would allow a city to charge fees greater than these suggested limits. However, this adds a burden on the city to demonstrate that the costs are reasonable and are a reasonable approximation of actual costs. The FCC says that it would expect only ‘limited circumstances’ under which a city could charge higher rules. Many cities filed in the docket that their costs to review an application is far greater than $100 per site since they usually do a field visit for each proposed site and often hire wireless engineers to make the review.

Many municipalities in the docket cited costs higher than these FCC limits and these low fee levels are why some are calling this a multi-billion dollar giveaway to the cellular carriers. They not only get small cells deployed more quickly, but they are paying a lot less for the applications and rights-of-way fees.

It’s clear that this docket gives 5G and other small cell providers everything on their wish list. It’s been rare in the past to see FCC orders that are so blatantly in favor of one side of an issue. As a regulator the FCC is supposed to weigh the views and needs of everyone involved in a given issue and try to compromise on common ground. However, this order is entirely one-sided in favor of wireless carriers.

Nobody doubts that 5G is an interesting new technology that will bring benefits to many. However, the recently announced Verizon 5G deployments are talking about bringing broadband speeds in the range of 200-300 Mbps. Everything I read predicts that the 5G improvements to cellular speeds will be incremental over a decade and bring speeds as fast as 100 Mbps for those in areas with multiple small cells. It’s clearly unprecedented for the FCC to come out so heavily in favor of a technology before it’s even been proven in field deployment. It’s still unusual for the FCC to protect a specific technology and it would still be nice to see them make it easier to deploy fiber.

The FCC has taken sides to protect new industries before, just not so early in the game. There were rules that fostered the deployment of cable TV, of cellphone and of landline broadband – but these rules generally were issued when it became clear that the new industry needed market protections to grow and thrive. I guess it’s due to the heavy lobbying that declares that 5G will solve all of our broadband problems – but we’re too early into the new technology to know yet if that’s true.

FCC Small Cell Order – Preemption

On September 27 the FCC adopted new rules that apply to the deployment of small cells on utility poles, light poles, buildings and other infrastructure. The order largely preempts state and local authority and today’s blog will focus on the preemption issue.

The orders are in WT Docket No. 17-79; WC Docket No. 17-84 and comes in two parts. First is a Declaratory Ruling where the FCC examines and then claims authority to override local and state regulations on small cell deployment issues. The second portion of the order is a Third Report and Order that sets a new ‘shot clock’ for processing small cell applications and which sets caps on local fees for connecting small cell sites.

FCC orders often conflict with state and local regulations and the FCC always has to decide the extent to which they are willing to override state and local regulations. This is a particularly touchy topic for anything to do with pole attachments and rights-of-ways because the Telecommunications Act of 1996 explicitly gave states the right to establish their own rules governing pole attachments. Since that order 22 states have elected to establish their own rules for connecting to poles while the remaining states follow the FCC pole attachment rules. However, it’s never been clear to what extent the 1996 Act gave any rights to cities.

With that said, states are generally not allowed to establish rules that conflict with the intent of FCC rules. For example, the 1996 Act gave the rights for carriers to gain access to poles, ducts and conduits, but state regulation can’t get rid of that right. State pole attachment rules generally clarify the specific application of the FCC rules and in some cases are more stringent than the FCC rules. For examples, there are states that have shorter time lines for attaching fiber to poles than the FCC rules.

This particular order has more than the usual share of legalese, but my interpretation of this order is that it applies everywhere and that the FCC has largely preempted all state and local regulations related to small cells. For example, the order presumes that any local regulation that would cause a delay in new FCC’s expected timelines would constitute an ‘effective prohibition of service”. The FCC says explicitly that delays cause by any “state or local regulation of wireless infrastructure deployment constitutes an effective prohibition of service prohibited by Sections 253 or 332(c)(7) of the Communications Act.

In regulatory terms that’s strong language – for example, the order says that states can have rules covering issues like aesthetics or the undergrounding of utilities, but any such rules cannot delay the FCC timelines. That’s important because it provides a way for carriers to get a court injunction against any city that delays the small cell deployment process for any reason. I’ve read the order several times and my interpretation is that it’s nearly impossible for a municipality to say no to a small cell request. It looks like cities must meet the FCC timelines without exception or delay.

There was a concern by many cities that the FCC was going to end the municipal exemption for pole attachments that has excused municipally-owned poles from FCC pole attachment rules. The order doesn’t address that issue, so it doesn’t appear that these new rules would apply to utility poles owned by a municipal utility. It’s less clear to me if this order applies to light poles or other structures that don’t connect to wires. (See the first comment below – the FCC took the position in a footnote that the order applies to all municipally-owned assets in the public ROW, but is not so clear on assets outside the ROW).

There is also a practical issue that I don’t see addressed in the order. Not all parts of a small cell deployments are in the air and there can be cabinets and other devices at street level used to power the small cells. Since cities are not allowed to cause the delay of small cell deployment, that logically would preclude local that slow the ground-based part of such deployments. That is an expansion of FCC jurisdiction – they’ve never exerted jurisdiction over the placement of cabinets since those rules consider numerous local issues like safety, handicapped access and aesthetics.

This order is clearly tilted in favor of small cell carriers. The wording of the order reads like the industry wish list and even has some language suggested by the wireless carriers. The carriers want to be able to deploy small cells anywhere quickly, at a low cost, and this order grants them that right. I’ve seen articles that claim this is a billion-dollar giveaway to the carriers.

Since this order preempts local and state pole attachment authority I would expect a flood of lawsuits challenging the order. In this industry the best regulations have always been the ones that balance the needs of all parties. There are clearly local concerns about the proliferation of small cell devices and this ruling is deaf to local concerns. Interestingly the cellular carriers and a number of big cities have already negotiated solutions to deploying small cells – and in every case this ruling is more severe than arrangements the carriers have willingly agreed to. That is the best evidence that this order has gone too far in the favor of the carriers.

Are There Any Level Playing Fields?

If you follow regulatory filings, one of the most common arguments you will encounter from the big ISPs is the concept of a level playing field. The idea behind the level playing field is that every competitor in the industry should be working from the same set of rules and nobody should have a market advantage due to regulatory rules. AT&T and Verizon have both rolled out the argument many times when arguing to tighten rules against potential competitors.

There are several good examples of the level playing field argument anywhere that the big ISPs fight to keep municipal entities from building fiber networks. They argue, for example, that municipal entities have an unfair market advantage because they don’t pay state and federal income taxes. But this argument falls apart quickly under examination. First, many municipal ventures such as electric or broadband entities pay in lieu of taxes. This is a tax-like fee that the local government charge to a municipal business. While it’s not really a tax, the fees ac like taxes and can be substantial.

Even more importantly, I can remember many years when AT&T or Verizon made the news due to paying no federal income taxes. Big corporations have numerous tax shelters that allow them to shield income from taxes, and the telcos have gotten numerous favorable rules into the tax code to allow them to walk away from most of their expected tax obligations. You can’t really fault a big corporation for legally avoiding taxes (unless you fault them for the lobbying that slanted the tax codes in their favor to begin with). It’s dishonest for these big ISPs to claim that a municipality has an advantage due to their tax-free status when they pay little or no taxes themselves. Under deeper examination, a municipal fiber venture paying 5% of revenues for in lieu of taxes is often paying a larger percentage of taxes than the big ISPs.

The big ISPs also claim that municipalities have an unfair advantage due to being able to finance fiber networks with municipal bonds. While it’s true that bonds often have a lower interest rate, I have compared bond and bank financing side-by-side many times and for various reasons that are too long to discuss in a blog, bond financing is usually more expensive than commercial loans. It’s also incredibly difficult for a municipality to walk away from a bond obligation while we have numerous examples, such as the Charter bankruptcy a few years back that let a big ISP walk away from repaying the debt used to build their networks.

The big ISPs don’t only use this argument against municipal competitors. AT&T is using the argument as a way to justify hanging 5G wireless devices on poles everywhere. They think there should be a level playing field for pole access, although at this early stage they are one of the few companies looking to deploy 5G small cells. Interestingly, while AT&T wants the right to easy and cheap pole access everywhere, in those places where they own the poles they fight vigorously to keep competitors from getting access. They effectively stopped Google Fiber plans to build in Silicon Valley by denying them access to AT&T poles.

Every time I hear the level playing field argument my first thought is that I would love it if we really had a level playing field. I look at the way that the current FCC is handing the big ISPs their wish list of regulatory rule changes and wish that my clients could get the same kind of favorable regulatory treatment.

A good case in point is again the 5G small cell deployment issue. The FCC has already said that they are in favor of making it cheap and easy for wireless carriers to deploy 5G cell sites. It seems likely that the FCC is going to pass rules to promote 5G deployments unless Congress beats them to the punch. Yet these regulatory efforts to make it easier to deploy 5G conveniently are not asking to make it easier to deploy fiber. If things go in favor of the big ISPs they will have a market advantage where it’s easier to deploy last mile 5G instead of last mile fiber. This will give them a speed-to-market advantage that will let them try to squash anybody trying to compete against them with a FTTP network.

The FCC is supposedly pro-competition, and so if we really had a level playing field they would be passing rules to make it easier to deploy all broadband technologies. They have had decades to fix the pole attachment issues for fiber deployment and have not done so. But now they are in a rush to allow for 5G deployments, giving 5G ISPs a market advantage over other technologies. The consequences for this will be less competition, not more, because we’ve already seen how AT&T and Verizon don’t really compete with the cable companies. In markets where we have both Verizon FiOS and Comcast cable networks both companies charge high prices and are happy with high-margin duopoly competition. There is no reason to think these big ISPs won’t do the same with 5G.

I look around and I don’t see any level playing fields – particularly not any that give small competitors any advantages over the big ISPs. I do, however, so scads of regulatory rules that provide unequal protection for the big ISPs, and with the current FCC that list of advantages is expanding quickly. The big ISPs don’t really want a level playing field because they don’t want actual competition. There are many reasons why other countries have far more last-mile fiber deployed than the US – but one of the biggest reasons are regulatory rules here that protect the big ISPs.

The Vision of Next Century Cities

Next Century Cities is an organization comprised of 166 mayors of cities that have the mission statement to make sure that all of their citizens have access to fast, affordable and reliable Internet access. The members range from small towns to NFL cities. They recently published their 2017 Policy Agenda that highlights the issues that they think are the biggest impediments to meeting their broadband goals. These goals are worth some thought since they differ from the wish list of most other stakeholders in the industry.

Restore Local Authority. Cities want to have a hand in finding their own broadband solutions and they don’t want to be restricted by state or federal law from doing so. I would note that the vast majority of cities do not want to be a retail ISP, but they still want to have the ability to make the investments needed to meet their broadband goals. They want to be able to form meaningful public-private partnerships. And more than anything else they want the legal authority to find broadband solutions.

Competition in Multi-Dwelling Units (MDUs). Cities with any significant percentage of citizens living in MDUs are concerned that those citizens are often not getting the same quality broadband products or having the same array of choice as single family homes. For example, even where fiber has been built, overbuilders often skip MDUs that present construction or operational issues. Cities are also still concerned about the proliferation of exclusive contracts between MDU owners and ISPs.

Anti-Monopoly and Competition. Mayors are concerned by what they see as shrinking competition. In many cities the cable companies have won the broadband battle against the telco. Where there are no significant third-party fiber overbuilders the mayors see broadband becoming a monopoly product. The cities generally are against the mergers of gigantic ISPs.

High-Quality Low-Income Internet Access. Cities are still looking for ways to solve the digital divide. They understand that there is a significant percentage of the population that doesn’t have broadband because they can’t afford it. They are currently dismayed by what they perceive as the FCC walking away from the Lifeline program that can subsidize broadband service in low income households.

Small Cell/5G/DAS. Cities are grappling with how to best foster and physically accommodate the coming proliferation of wireless transmitters that will be spread through the community to distribute 5G and millimeter wave spectrum. They are anticipating a host of new wireless broadband products, but they have concerns about how to deal with numerous wireless providers wanting to utilize the same key locations.

One Touch Make Ready. Cities are in favor of regulatory changes that make it easier for fiber overbuilders to get onto poles or into existing conduits. The ‘one touch make ready’ concept would greatly speed up the process and reduce the costs of the pole attachment process. It would give a new fiber builder the ability to more easily move wires of existing carriers to speed up the construction process. In cities with numerous existing carriers on pole lines the cost and time involved in gaining approval and of implementing the changes needed to accommodate a new carrier can be numbingly slow.

Infrastructure Investment. Cities want to be included in broadband infrastructure spending that might come from any federal infrastructure plan. They fear that any broadband money will be aimed only at rural areas and the FCC still estimates that there are more than 10 million people in large urban areas that can’t buy bandwidth that meets the FCC’s 25/3 Mbps threshold. And while smaller rural towns and cities might have broadband that meets that test, they often have older networks that are far below the standards of metropolitan areas.

Summary. Of all of the various stakeholder groups involved in broadband infrastructure deployment, cities the most focus on getting quality broadband to everybody. That focus puts them into opposition with incumbent ISPs on some issues. Experience shows us that cities are often more aligned with new overbuilders, at least to the extent that those ISPs don’t want to only cherry-pick the most lucrative customers in the city. Because of various state restrictions, cities vary widely in how much influence they have over broadband. But cities everywhere are the ones that determine some of the key processes in broadband deployment such as permitting and local construction practices. And that means that their goals must be recognized by anybody wanting to deploy new broadband in cities.

The Limitations of Cellular Data

SONY DSCIt’s hard these days to find anybody that is satisfied with the quality of data received over cellphones. A research report published by Aptelligent late last year showed that the US placed 10th in the world in overall cellular network performance, measured by the combination of reliability and speed. We all know that sometimes cellphone data is adequate, but can suddenly deteriorate to where you can’t load simple web pages. There are a number of factors baked into the cellular architecture that contribute to data performance. Following are a few of the key factors:

Data Power Drop-off. Cellular networks, by design, assume a massive drop-off of data speeds with distance. I don’t think most people understand how drastic the power curve is. Cellular companies show us bars to indicate the power of our connections – but these bars are not telling us a true story. The cellular architecture has a 100:1 data rate ratio from cell tower to the edge of the delivery area (generally a few miles). To provide an example, this means that if a cell site if designed to deliver 10 Mbps at the cell tower, that it will deliver only 1 Mbps at the mid-point of the cell tower range and only 0.1 Mbps at the edge.

Shape of the Cellular Footprint. It’s easy to think that there are nice concentric circles of cellphone signals propagating around cell towers. But nothing could be farther from the truth. If you go around any cell site and measure and plot the strength of signals you will find that the footprint of a cell tower looks a lot more like an amoeba, with the signal in some directions traveling a relatively short distance while in others it might travel much farther. If these footprints were static then engineers could design around the vagaries at a given cell site. But the footprint can change quite dramatically according to temperature, humidity and even the number of users concentrated in one portion of the footprint. This is why the delivery of broadcast wireless services is always going to more an art than a science, because the delivery footprint is constantly shifting, in many cases dramatically.

Proliferation of Antennas. Modern cellular networks have improved performance by significantly increasing the number of transmitting antennas on a cell tower (and also more receiving antennas in cell phones). This use of MIMO (multiple input, multiple-output) has produced a significant improvement for customers who are able to gain simultaneous signal from more than one transmitter. But there are two consequences of MIMO that actually decrease performance for some users. First, MIMO largely benefits those that are closest to the cell tower, and that means there are fewer quality connections available for those farther away from the cell tower. Second, MIMO has a secondary characteristic in that MIMO works best using cellular channels that are not-adjacent. And during time of heavy cellular usage this has the result of improving the signal strength in the MIMO channels but decreasing the strength of the other channels, again decreasing quality for customers that grab the weaker channels.

Impaired Hand Offs. Mobility is enabled in a cellular network when a customer is handed off from one cell site to the next while traveling. MIMO and other techniques that increase the signal to a given customer then make it more difficult for that customer to be handed to the next cell site. Hand offs were relatively error free when customers received a one channel signal from one transmitter, but now the quality of hand offs from one cell site to another can vary dramatically, resulting in more disconnects or drastic swings in the strength of connections.

Small-Cell Issues. All of the above issues will be compounded by the introduction of small-cells into the cellular network. In today’s cellular architecture a customer can only be handled by one cell tower at a time. Cellular networks don’t automatically assign the strongest connection to a customer, but rather the nearest available one. While small-cells will increase the opportunity to get a signal in a crowded environment, it also increases the chance of getting a poor connection, or of running into hand off issues for mobile customers.

2D Signal Propagation. Cell tower antennas are largely aimed to transmit close to the ground and do not waste signals by sending signals upwards in a 3D pattern. Anybody who has traveled to a big city and received poor signal on an upper floor of a tall hotel is familiar with this issue. The cellular signals are focused towards street level and not towards anybody higher. That’s not to say that you can’t get a cellular connection at the top of a highrise, or even in an airplane, but the vast majority of the connections (and the strongest connections) are aimed downward.

Crisis Propagation. Cell towers are arranged as an interconnected mesh. When something drastic happens to a given cell tower, such as losing power or being swamped with calls during an emergency, this not only shuts down the tower with a problem, but the problem cascades to nearby towers, often taking them out of service as well. This is similar to a rolling blackout in an electric grid. Carriers have been working on load balancing techniques to try to tamp down this problem, but it’s still relatively easy for a given cell tower to get overwhelmed and start a neighborhood and even regional cascade.

These issues all outline how complicated it is to design a great cellphone network. The above issues are worsened by the fact that in the US our cell sites were largely placed years ago to accommodate voice traffic and thus are not situated to instead provide optimum data traffic. But even a brand new cellular network designed to optimize data traffic would run into these same or different issues. It’s nearly impossible to design a cellular network that can handle all of the issues encountered in the real world. This makes me glad I’m not a cellular engineer.