Editor’s Corner—AT&T’s silence on private LTE networks shows what a challenging market it is

utility pole
Utilities are a target market for those selling private, licensed LTE networks.

It’s been two and a half years since AT&T and Nokia developed a private, secure, reliable and high-capacity LTE network for smart grid technology, and began selling it to utility companies and others. So far, AT&T doesn’t have anything to show for it.

When questioned recently about whether AT&T has any customers or announcements for the offering, the carrier declined to comment.

That’s not to say AT&T isn’t making progress. Indeed, the carrier said it would conduct trial deployments of the offering in 2017 in at least four different areas. Further, AT&T’s partner Nokia has managed to ink telecom deals with utilities for other products, indicating at least some momentum.

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Moreover, AT&T isn’t alone in its efforts to stir up interest in private wireless networks. For example, Ligado is currently working to sell its own private wireless networks using its own licensed spectrum holdings (though Ligado too recently said it didn’t have any customer contracts to show for its efforts).

At first glance, AT&T’s offering seems pretty compelling. The carrier is basically offering its unpaired 2.3 GHz WCS C and D Blocks to utilities and others so that can build their own, private LTE network. “Utilities will have continuity they can count on for their critical grid applications. And, they’ll have a network that can evolve with the distribution grid of the future,” the company argued in announcing the offering in early 2016.

But the smart grid sales cycle appears to be fairly time-consuming; later in 2016, AT&T said it wouldn’t able to deploy its smart grid offering broadly enough to meet the FCC's WCS spectrum buildout deadlines, and asked for a waiver or modification of the deadline.

Early last year, the FCC granted the buildout waiver (PDF), writing that “doing so will allow AT&T to continue to engage in the activities discussed in its petition: adapting and lab testing equipment; meeting with utility customers and entering into lease or other business agreements with utilities; and deploying trial systems.”

The FCC’s waiver also required AT&T to file a report in September on the utility customers it will provide its smart grid service to, and the timeframes for deployment to those customers. I couldn’t find that report (the FCC’s filing system is notoriously challenging to navigate) and AT&T declined to comment on the topic.

The FCC did say though that giving AT&T the waiver will allow the carrier “to deploy a beneficial, non-interfering smart grid network to a variety of utility companies nationwide, making efficient use of challenging spectrum blocks. This will be of benefit to the millions of end-user customers served by those utilities across the country.”

That’s certainly the selling point that’s drawing an increasing amount of interest in the notion of private wireless networks. Such networks would allow utilities and others to conduct secure communications outside of public wireless networks that potentially could get bogged down with traffic from regular joes like you and me.

Of course, private wireless networks aren’t a new thing. Wi-Fi and other technologies have been used to build such networks for years. But carriers’ newfound abundance of licensed spectrum, coupled with the reliability, security and falling cost of LTE equipment, makes the concept of private, licensed LTE networks much more obtainable.

But that doesn’t mean it’s going to happen anytime soon.

Ken Rehbehn, principal analyst at Critical Communications Insights, explained that the private, licensed LTE sales cycle is exceedingly sluggish. After all, convincing a 100-year-old utility company to invest in a relatively new technology, and then to build out a network with that technology, doesn’t seem like an easy sell.

Furthermore, newer technologies—3.5 GHz CBRS specifically—are muddying the discussion.

“The private LTE discussion is really tied to CBRS,” noted Iain Gillott, the founder and president of research and consulting firm iGR. “CBRS is very attractive because it works like Wi-Fi.”

Monica Paolini of ‎Senza Fili Consulting largely agreed. In a recent report, she wrote that “the most promising and innovative opportunity for private networks comes with CBRS … If, as an initial proof point, CBRS is successful, it can be extended to other bands to provide the foundation of a spectrum-sharing platform available across the globe.”

The problem there, of course, is that the FCC’s rules for the CBRS band aren’t finished yet, and so no one can actually deploy commercial services on them. And utilities that might be hesitant to venture into the private LTE arena might want to wait to see if the first-of-its-kind spectrum-sharing management system for the CBRS band actually works. And that will undoubtedly take years.

So will private wireless networks, those leveraging LTE and licensed spectrum, ever get off the ground? I suspect there’s plenty of interest from utilities and others—after all, Wi-Fi has been used for private networks for years, and licensed LTE services could potentially operate across much larger distances with much less chance of interference.

The only question, of course, is whether the cost of such a network would be worth it. – Mike | @mikeddano