Small wireless carriers feel squeezed on multiple fronts

CCA members expressed several concerns about the outlook for small wireless carriers. (Getty Images)

Leaders from some smaller wireless carriers expressed dissatisfaction and concern about several aspects of their business at this week’s CCA Annual Convention in Phoenix. They’re concerned that digital-divide money will all go toward fiber, that Universal Service Funds (USF) are drying up, that their spectrum needs are being ignored and that they’ve missed the boat on private wireless.

The federal government seems on the brink of offering a bonanza of funding to close the digital divide in America. So it would seem intuitive that small wireless carriers would reap some of those benefits since they oftentimes serve rural markets. But the operators on a CCA panel noted that much of the funding that will come from the government is geared toward deploying fiber.

RELATED: U.S. government funding sources for broadband

Eric Woody, chief technical & operations officer of Union Wireless, which is based in Wyoming, said, “Broadband in rural is not a cookie cutter. Wireless is key to getting that last mile and sometimes that middle mile done, especially where it’s so difficult to get permitting over federal lands. It’s a way to get to that end user without so much of an environmental impact.”

Cellular One CEO Jonathan Foxman said, “We’re not a fiber provider. We’re just wireless. From our perspective, there’s a lot of concern about discussions in D.C. with the emphasis that kind of funnels everything toward fiber. And the amount that looks like it’s heading to wireless, to us seems really insufficient.”

CCA members aren’t the only ones concerned about the focus on fiber for underserved and unserved areas. Today, the Wireless Internet Service Providers Association (WISPA) CEO Claude Aiken sent a letter to the governors of all 50 states and U.S. territories, calling on them to use the U.S. Treasury’s American Rescue Plan Act (ARPA) funding for broadband deployment in a technologically neutral manner.

In WISPA’s view, a “one size fits all” approach, which focuses on fiber deployments, would actually harm the rollout of ubiquitous broadband access for those who currently lack it.

USF

At the same time as wireless providers are feeling left out of the conversation on closing the digital divide, they’re also concerned about the steady depletion of USF monies.

Foxman said that over the years, USF monies collected have been dwindling, and “at each key step along the way it feels like wireless took a hit.” He noted that there are some rules that require a certain set of USF funding to be used for 5G, which he finds unproductive in places where people just need a decent level of connectivity. “It effectively is a reduction in support,” said Foxman.

Spectrum

The operators on the CCA panel also expressed frustration about the allocation of spectrum in the U.S.

They have had opportunities to buy more spectrum lately through the CBRS and C-Band auctions. And there are some upcoming auctions of 2.5 GHz and 3.45 GHz as well.

RELATED: T-Mobile urges FCC to get moving on 2.5 GHz auction date

Mark Nazé, CEO of Nsight–Cellcom, said that the company’s customers are increasing their data demands by about 20% per year. Nsight–Cellcom is constantly looking at ways to keep increasing the capacity in its networks, and one of the most obvious ways to do that is to acquire more spectrum. “This year we will probably be adding additional spectrum to about 25% of our existing cell sites,” said Nazé. “We’ll put additional spectrum onto them just to try to keep up with the demands. In order for us to continue to do this, we need to have more affordable spectrum.”

But he complained that the partial economic areas (PEAs) that the FCC often uses for spectrum auctions do not work for smaller operators. They can’t afford to buy geographically-large PEAs, especially where big portions of the PEA aren't in their coverage area.

Woody said, “It needs to be much more manageable sizes for the entire ecosystem, not just for what the big three want. We’ll use it more than they will in the rural areas.” 

CCA CEO Steve Berry said, “It’s tough when the policymakers start out by saying counties are not an option. PEAs may be the smallest division that they’re willing to look at. Some have suggested that the secondary market could actually help if there were incentives for the larger carriers that own the largest blocks they could release some of that spectrum into smaller markets without being penalized for buildout requirements that were originally attached to the original auction terms and conditions.”

Private wireless

Finally, the operators on the panel were asked if they were launching any private wireless offerings.

Woody said, “I almost wonder on this one if we kind of missed the boat on private LTE networks.”

He noted, “There’s a lot of opportunity out there whether it be larger education institutions, whether it be different industries.”  But Union Wireless hasn’t started anything related to private wireless. He said the oil and gas companies in Union’s coverage area aren’t having their best years right now, so they’re not looking at new technologies such as private wireless.

Nazé said, “A number of things have to intersect for there to be good opportunity” in private wireless where the capital investments align with customer demand in various industries.