AT&T and Verizon this morning said they would delay their commercial C-band-based wireless services by a month to allow the Federal Aviation Administration (FAA) to assess any impact on aviation safety.
The FAA and the Federal Communications Commission (FCC) said in a joint statement: "Today Verizon and AT&T announced that they will voluntarily pause commercial launch of C-band wireless service to further assess any impact on aviation safety technologies. Aviation safety and technology leadership are national priorities, and with today’s announcement these companies have demonstrated their commitment to both. The Federal Aviation Administration and the Federal Communications Commission will continue to coordinate closely to ensure that the United States keeps pace with the rest of the world in deploying next-generation communications technologies safely and without undue delay.”
Earlier this week the FAA issued a warning over potential interference to airplane safety systems from upcoming 5G deployments in C-band frequencies.
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AT&T provided the following statement: “At the request of the Department of Transportation, today we have voluntarily agreed to defer Phase I C-Band deployments for one month to January 5 while we continue to work in good faith with the FCC and the FAA to understand the FAA’s asserted co-existence concerns. It is critical that these discussions be informed by the science and the data. That is the only path to enabling experts and engineers to assess whether any legitimate co-existence issues exist.”
Earlier this year, the wireless carriers paid big for new C-band spectrum licenses in the 3.7-3.98 GHz range. Verizon spent about $45.5 billion, and AT&T spent about $23.4 billion for the licenses. The start of initial deployments in major U.S. markets was expected on December 5.
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The delay is a blow to Verizon and AT&T, which have been touting the new spectrum as a way to finally deliver 5G with better capacity and throughput across their national footprints.
Verizon, in particular, has been touting the benefits that the new spectrum will bring. During its Q3 2021 earnings call, the word “C-band” was mentioned 30 times. Verizon CEO Hans Vestberg said, “Our strategy is becoming a national broadband provider with the best access to the tech for our customers including Fios, fixed wireless access on 5G, 4G millimeter-wave and C-band.”
Vestberg also said, “C-band Capex was more than $1 billion through the third quarter, and we have placed orders for approximately $2 billion of related equipment year-to-date.”
What if the delay is extended?
A one-month delay isn’t such a long time. But a lot depends on the outcome of the FAA’s study. A longer delay could be a big setback for Verizon and AT&T, giving T-Mobile an even greater head start in 5G than it already enjoys.
In a note to investors, New Street Research analyst Blair Levin said, “Any delay in C-Band use helps T-Mobile in its efforts to lock in 5G customers before Verizon and AT&T have improved their coverage in offering 5G.”
Levin said a longer delay could also affect consumer perception. If the A block C-band spectrum were delayed until the end of 2022 “then T-Mobile will have a full year of having nationwide 2.5 GHz while the incumbents literally have zero PoPS on C-Band.”
Although consumer perceptions about 5G do not currently distinguish much between the three major companies, a longer delay in C-band could change that.