Etheric Networks is purchasing 19 LMDS millimeter wave (mmWave) spectrum licenses from Verizon, representing the remainder of the carrier’s holdings in the bands.
Fierce reported on the potential deal in April. License assignment applications filed June 7 with the Federal Communications Commission (FCC) were approved June 8.
Etheric Networks is a fixed wireless service provider, primarily serving the San Francisco Bay Area, that’s also participated in the Rural Digital Opportunity Fund (RDOF).
Brian Goemmer, president and founder of AllNet Insights & Analytics, told Fierce that while not a major transaction for Verizon, it does mean the carrier has exited its LMDS (Local Multipoint Distribution Service) 29/31 GHz holdings. Verizon previously sold 208 LMDS licenses to GeoLinks.
RELATED: Is Verizon looking to offload LMDS spectrum holdings?
LMDS is high-band millimeter wave spectrum – something Verizon already has a significant amount of. However, unlike flexible use licenses scooped up at 5G mmWave auctions, LMDS is more restricted and can only be used for fixed wireless services. Goemmer said that fits into Etheric’s plans as an RDOF provider “but it doesn’t fit as being that important of spectrum for Verizon,” which is building out a 5G network targeting both mobility and fixed wireless services.
Particularly against the backdrop of Verizon’s existing 5G mmWave spectrum. Verizon has 850-megahertz of spectrum in the 28 GHz band in most markets and between 1100 and 1600- megahertz in the 37/39 GHz band, according to Goemmer.
“They can let half a gig of this [LMDS] spectrum go,” he said.
AllNet’s data suggests Verizon’s remaining LMDS spectrum totals 13.6 billion MHz-PoPs.
Using a $0.01 valuation from the 37/39 GHz auction, Goemmer said it could be worth $13 million dollars, “although LMDS should be less valuable than 37/39 GHz spectrum that is licensed for mobile and fixed use.”
Etheric Networks said they could not disclose financial terms of the deal and Verizon did not respond to a request for comment.
AllNet Insights generated the spectrum map below showing the 19 license areas where Verizon’s LMDS spectrum to Etheric are located.
While Verizon may not be interested in LMDS, the spectrum could provide a good opportunity for Etheric.
The company already secured spectrum in the shared 3.5 GHz band, winning priority access licenses (PALs) in seven counties at the FCC’s CBRS auction.
For the purposes of fixed wireless service, Goemmer said unlike mobile – which would want to start with low-band spectrum to cover large swaths before adding higher bands for capacity – fixed wireless could jump right into upper mid-band.
“That’s going to be really the anchor for Etheric to put 3.5 [GHz] onto a tower to cover as many households as they possibly can,” he noted.
RELATED: Etheric Networks plans use of CBRS spectrum for fixed wireless access
But if clusters or subdivisions crop up with a greater number of customers, they could then potentially offload capacity on LMDS so 3.5 GHz could cover more widely spread homes.
Goemmer also sees a utility in LMDS potentially as backhaul between the 3.5 GHz towers, in places where it might be difficult to get fiber optics to towers running fixed services.
“It would seem Etheric has the potential to leverage this spectrum from Verizon to be, more likely at the outset, as a backhaul facility for their CBRS. But it also could be used for high-capacity fixed wireless as well,” he said.
Etheric is getting some dense urban areas with the LMDS spectrum, and previously expressed plans to upgrade its core services in the greater San Francisco Bay Area market to deliver licensed gigabit connectivity to business, government and residential customers.
To Goemmer, that indicates Etheric could be looking to residential broadband with 3.5 GHz and then business connectivity using LMDS.
“If you bring business in, the core business requirements are 10-fold of what a home broadband would be,” he said. “If you’re going to enter that space you have to be ready to offer significantly more capacity.”