Verizon views CBRS, C-band in ‘very different ways’

The Citizens Broadband Radio Service (CBRS) band at 3.5 GHz and the C-band both represent opportunities for U.S. wireless carriers to get access to new mid-band spectrum for 5G, but Verizon SVP and CFO Matt Ellis said the company views these two in very different ways.

Speaking at a Morgan Stanley investor conference on Tuesday, Ellis said CBRS is geared more for a 4G capacity upgrade while C-band could increase “the size of the 5G opportunity” for the company.

The Federal Communications Commission (FCC) scheduled a CBRS auction of Priority Access Licenses (PALs) to begin on June 25; it represents the earliest opportunity for U.S. carriers to buy new mid-band spectrum at auction. That 70 megahertz of spectrum is part of a unique sharing paradigm and comes with power level and other restrictions.  

Last week, the FCC agreed to tee up 280 megahertz in the C-band for a December 8 auction; that spectrum, however, is still being used by satellite players and while they could get a combined $14.7 billion as an incentive to move quickly and cover relocation costs, it’s not clear how fast it’s all going to happen.

CBRS vs. C-band

Verizon has been involved for quite some time in the CBRS space, which is available on an unlicensed basis ahead of the PAL auction. The CBRS Auction 105 will offer seven PALs in each county-based license area, and each PAL consists of a 10-megahertz unpaired channel within the 3550-3650 MHz band.

“We’re thinking about both of them but in very different ways,” Ellis said of the two bands. “If you start with CBRS … it’s something that certainly we see as being complementary within our LTE network experience initially and then eventually it could be part of the 5G as well.”

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Within the 4G network, CBRS at 3.5 GHz could be another way to add capacity in a cost-efficient fashion, “so we’ll see how it plays out,” he said. Obviously, with some features of that spectrum it makes sense to use it for added capacity rather than as a base coverage layer given it has low power and other restrictions. “We certainly will look at it from a 4G capacity standpoint.”

With the C-band in the 3.7-4.2 GHz range, the FCC has done a great job of recognizing the importance of bringing this spectrum to market for the development of 5G in the U.S., and “we are very supportive” of the order that was approved last week, he said. The FCC is expected to release more details about that order this week, but based on what’s been made public, “there’s a lot that we like in there.”

For some parts of that C-band spectrum, whoever wins those pieces, the first 100 megahertz in 46 of the top 50 markets would expect to have that spectrum available to use by the end of next year. “The interesting thing about C-band is the size of it that’s available,” and that creates some interesting use cases, he said.

He reiterated that Verizon’s current 5G deployment is based on the assets that it owns—which happens to be a lot of millimeter wave spectrum—but as they look at C-Band, it brings forth some use cases that could “increase the size of the 5G opportunity for us.”

A lot of work needs to be done between now and the start of that auction, but he suggested it could be an interesting complement to the assets that it already manages.

Dynamic Spectrum Sharing

Dynamic spectrum sharing (DSS) is part of the 5G 3GPP standards that allows operators to use the same spectrum for 5G as they use for 4G rather than going through a complex refarming process, which was the case for prior generational shifts.

Ellis said Verizon is “very excited” about DSS—the status of which T-Mobile’s Neville Ray disparaged last month—for a couple of reasons.

“Firstly, it gives us the opportunity to use spectrum more efficiently than we’ve ever had before,” Ellis said. “The ability to use the same piece of spectrum for two different generations of the technology, we’ve never had that tool in our toolbox and dynamic spectrum sharing kind of gives us that.”

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Verizon conducted a live DSS demonstration with Ericsson back in December, and it’s “very happy with the progress the teams are making with that,” he said. The network team is positioning the network so that “around middle part of the year, during the summertime, we should have that fully in the network and then it will just be a commercial decision when it’s the right time to actually bring that into the marketplace in the back half of the year,” he said. “But 100% confidence that the technology is going to deliver what we expect it to and it’s going to be available to us when we expect it.”

RELATED: Verizon sticks behind ambiguous 2020 DSS rollout plan

In separate notes for investors last month, Wells Fargo Securities analyst Jennifer Fritzsche said Verizon and AT&T each shared different views on DSS than T-Mobile, which arguably doesn’t need DSS as early as Verizon.

She said the Verizon network team was very clear—that DSS is out of lab testing with all three of its vendors and chipsets are ready.

Separately, after a meeting with AT&T Communications CEO Jeff McElfresh, she suggested AT&T was more in tune with the Verizon camp than T-Mobile on DSS, with the technology performing well in AT&T’s lab environment and being deployed in market tests.