The fixed wireless wave is coming. And by all indications, it’s going to be big.
Although the technology has been around for a long time (wireless local loop anyone?) things in the space today appear to be finding much more solid footing. And all indications are that fixed wireless is poised to begin accelerating in the near future, at a dramatic pace.
Companies across the gamut—from giant telecoms like Verizon to startups like Starry—are investing in new fixed wireless services. And government money aimed at bridging the digital divide could help fund further fixed wireless deployments. Perhaps more importantly, a surprisingly large number of new and existing vendors are selling increasingly inexpensive equipment for fixed wireless services. But the most interesting element in fixed wireless is that it appears to be a breeding ground for new wireless technologies.
Let me reiterate that last point: Despite all the noise around 5G, the fixed wireless market is propelling a noteworthy amount of innovation in wireless.
But here’s why I’m personally interested in the current noise around fixed wireless: The technology is opening the door to new, startup ISPs in both rural and urban areas. And that’s a big deal because wired ISPs rarely face serious competition, given the high cost of entry into the market (it’s those expenses that in part stymied Google Fiber’s buildout). Indeed, that lack of competition could also be part of the reason why internet service providers have some of the lowest customer satisfaction metrics of almost any sector of the U.S. economy.
Thus, fixed wireless providers have the opportunity to enter rural and urban markets at about a tenth of the cost of laying physical fiber in order to provide services to customers who are clearly fed up with their existing, wired options. The stage may well be set for serious disruption.
Verizon’s fixed wireless strategy
To be clear, the fixed wireless opportunity is no secret. After all, the nation’s largest wireless network operator decided the opportunity was so compelling that it invested billions of dollars into buying millimeter-wave spectrum from XO and Straight Path while concurrently developing its own proprietary transmission standard called V5GTF, all to offer fixed wireless access (or FWA for those who love industry acronyms). Verizon formed the Verizon 5G Technology Forum in late 2015 with Cisco, Ericsson, Intel, LG, Nokia, Qualcomm and Samsung to create “a common and extendable platform for Verizon's 28/39 GHz fixed wireless access trials and deployments.”
The result? After testing the technology in 11 cities, Verizon plans to deploy it in 3 to 5 cities this year with an eventual goal of expanding it to around 30 million households. (Verizon’s CEO recently admitted though that the company would eventually have to replace its proprietary V5GTF equipment with 5G equipment that adheres to the 3GPP’s recently completed 5G standard.)
And what will Verizon’s fixed wireless service look like? The company said its transmissions will reach around 2,000 feet and provide each of its customers with 1 Gbps services. That means Verizon is poised to use its V5GTF fixed wireless service to directly counter wired ISPs with “wireless fiber.”
Open Broadband and other fixed startups
While Verizon’s fixed wireless service clearly sits at the high end of the market, it’s not the only game in town. And that’s the truly striking aspect of the fixed wireless industry: There’s room for tiny startups too.
“We can really accomplish a lot with a very small core team,” said Alan Fitzpatrick, CEO of Open Broadband. The company, founded in 2016, counts six full time employees alongside a handful of other associated contractors and freelancers. It operates fixed wireless services in four communities in North Carolina, and is working to expand into South Carolina, Virginia and elsewhere.
Although Fitzpatrick declined to provide Open Broadband’s customer numbers, he said the company has operated financially from a “breakeven or better” standpoint. “We are simultaneously building a network and signing up customers,” he said. “We only build where we have sales.”
So, what exactly is Open Broadband building? The company’s deployment process is representative of most other fixed wireless providers. First Open Broadband finds tall things to attach its antennas to. Fitzpatrick said that tower companies like Crown Castle will charge up to $2,000 per month for access to their towers, but “we like places that are a lot less.” Fitzpatrick said sometimes the company is able to ink a deal with a city or county to use a tower or other structure for its antennas, and sometimes it’s able to find a nearby farmer with a tall grainery who is willing to put some antennas on it.
After finding a suitable location for its antennas, Open Broadband then obtains backhaul for the site, either fiber directly or a high-bandwidth wireless connection to nearby fiber. “We take fiber as deep into the territory as we can,” Fitzpatrick said.
After that, Fitzpatrick selects an available and suitable spectrum band: The company has used everything from 5 GHz to 11 GHz to 24 GHz to 60 GHz to 80 GHz. After that, the company installs compatible antenna equipment from whatever vendor makes sense. “There’s a variety of hardware vendors out there today,” he said, explaining Open Broadband has used equipment from vendors including Siklu, Mimosa, Ubiquiti Networks, IgniteNet and Cambium Networks. “We have them all in our network,” he said.
Open Broadband typically pays $300 for antennas that can serve around 50 total customers with speeds of 25 or 50 Mbps, up and down. Customers typically pay around $30 per month for their service and their usage is not throttled or capped. But customers must install a $150 receiver outside their office or house, like they have to do with satellite TV.
Fitzpatrick added that Open Broadband can raise its speeds to 1 Gbps if customers are within around 1,800 feet of an antenna and have a clear line of sight to it. But Fitzpatrick said that kind of equipment costs more—like $1,000—and the monthly price to customers can be around $350 per month.
If Verizon is representative of the fixed wireless wave on the high end, Open Broadband certainly represents it on the low end. But there are an absolute ton of players in the middle. For example:
- AT&T plans to use fixed wireless services to deliver services to more than 1.1 million rural locations by 2020 as part of its commitments to the FCC's Connect America Fund Phase II (CAF-II). Frontier and Windstream may do the same.
- C Spire expects to use fixed wireless to eventually cover 200,000 consumers and businesses in Mississippi.
- Starry plans to expand its fixed wireless service to 16 major markets during 2018.
- Redzone Wireless flipped the switch on its “5Gx” fixed wireless network last year and recently said it will expand to Portland in the first quarter of 2018.
- Rise Broadband is probably the country’s largest fixed wireless provider with around 200,000 customers in rural locations in a number of states across the country.
- And the trend isn’t exclusive to the United States. For example, in England BT’s EE said it will use fixed wireless equipment from Panorama Antennas to offer 100 Mbps service to up to 580,000 homes.
WISPA, the trade association representing the fixed wireless internet service provider industry in the United States, works for around 800 members and recently cited a report from The Carmel Group that counted 2,000 FWA providers in all 50 states, with an average of 1,200 customers each.
A wild west of fixed wireless standards
The official 5G standard was ratified in December, but Verizon isn’t the only company pursuing proprietary network technology to target the fixed wireless space.
“The collective approach has really not figured out how to do” fixed wireless, said Steven Glapa, VP of marketing for wireless technology startup Tarana Wireless. Glapa said the company is developing massive MIMO technology it believes will dramatically improve fixed wireless transmissions in spectrum bands between 1 and 10 GHz.
“What we’ve done is taken the approach that for fixed access, what you want to do is distribute the massive part in between the base station and the end device,” he said. “The CPE [customer premise equipment] gets to play a more intelligent role in the network.”
The company, which is currently testing its technology with various carriers in Europe and the United States, hopes to develop technology for 1 Gbps peak speeds and 100 Mbps sustained speeds across distances of 500 meters to a couple of kilometers, supporting “hundreds and hundreds” of subscribers.
Tarana isn’t alone. Startup Hammer Fiber partnered with a European technology company to develop a “wireless DOCSIS” transmission technology that the company is using to build out a fixed wireless service in Atlantic City and elsewhere.
“DOCSIS is a unique approach,” said Hammer Fiber CEO Mark Stogdill, explaining that DOCSIS is a global standard for cable services that Hammer Fiber is using for its wireless transmissions. “I think it’s maybe the secret sauce to the equation.”
Continued Stogdill of the company’s technology: “It’s capable of bonding small, non-contiguous channels, and it can do that across various spectrum allocations. And it can bond into one contiguous channel that can be as large as 450 MHz wide.”
He added that, by using DOCSIS, Hammer Fiber can leverage existing, low-cost cable equipment and established video transmission technologies.
With its technology, Stogdill said Hammer Fiber is currently delivering 25 to 150 Mbps services to customers up to 3.5 miles away. The company hopes to acquire 1,000 customers this year, and is concurrently working to sell its platform and technology to other wireless ISPs.
Tarana’s massive MIMO technology and Hammer Fiber’s wireless DOCSIS are just two examples of the glut of wireless technologies at play in fixed wireless. For example, Common Networks and Starry both use varieties of the 802.11 Wi-Fi standard for their respective fixed wireless services.
And Rise, the nation’s largest fixed wireless provider, uses a number of different proprietary technologies in its network, but is relying on LTE for most of its current and future deployments. “Rise prefers to use LTE in markets of higher population densities because of its ability to efficiently serve more customers from a single tower (providing greater capacity) while delivering speeds up to 100 Mbps,” said Jeff Kohler, Rise’s co-founder and chief development officer.
Contrast this surfeit of wireless technologies in fixed wireless with the mobile wireless industry. Mobile providers like AT&T, Verizon and others have – without exception – coalesced around a single, global standard: LTE, moving to 5G.
The reasons behind the fixed wireless push
So, what’s driving the fixed sector forward? There are a number of reasons it appears to be gaining momentum:
1. It’s cheap. “The value is just very, very apparent,” said Jaime Fink, co-founder and chief product officer at Mimosa Networks, which sells equipment for fixed wireless services that runs on the company’s own proprietary transmission technology. Fink said Mimosa’s equipment costs in some cases a third of what LTE equipment costs and can in general provide faster services over farther distances.
“We’ve created our own TDD-based scheme that is OFDM-based, so it looks a ton like what you see with LTE today,” he said. “It’s hard to really see much of a performance difference on the LTE side, and you’re seeing a lot more cost. Or, as the telcos call it, the ‘Qualcomm tax.’” (For its part, Qualcomm is only one of many companies that hold patents on LTE technology, though it does operate a significant patent-licensing business.)
Hammer’s Stogdill agreed. “LTE can be expensive. So, I think cost is probably a large reason why LTE hasn’t been as widely adopted for fixed wireless as it should have been, outside of some of the larger operators.”
2. It works in a closed system. In a mobile network, everything needs to work in concert. Smartphones from one vendor need to connect to networks from other vendors. And mobile service providers need to make sure that smartphone users can take their phone with them anywhere, including to places where competitors might be offering service. That’s a big reason the industry has coalesced around the LTE standard.
Things are different in fixed wireless. The only concern in FWA is the connection between the base station and a stationary receiver.
“In fixed access, you don’t have to worry as much about device interoperability, which gives you more freedom to experiment with new approaches to things,” said Tarana’s Glapa.
3. It’s getting more usable spectrum. For years mobile network operators gobbled up most of the nation’s usable spectrum at prices that smaller companies couldn’t even begin to consider. After all, the FCC’s AWS-3 auction in 2015 raised an astounding $44.9 billion in bids.
But the spectrum situation is changing. First, millimeter wave spectrum, long considered largely unusable, is increasingly seen as a viable place to compete thanks to technologies like beamforming and massive MIMO.
But more importantly, the FCC is moving forward with plans to release spectrum in a wide range of bands from 3 GHz on up, both licensed and unlicensed. Indeed, much of the noise around the 3.5 GHz CBRS band is coming from companies hoping to use it to provide fixed wireless services.
4. It meets a demand. Before starting Open Broadband, Fitzpatrick said he looked at the FCC’s statistics for internet service in rural areas. The result? 48% of residents had access to only provider, and around 70% had access to either one or none.
And providers without any competition aren’t being pushed to improve their services.
“People are clamoring for faster speeds,” Fitzpatrick said. “That was sort of the whole genesis of the idea. We saw a huge market opportunity. … It was one of those things where we thought we could make money on a business where we were also doing something good for society as well.”
Reality check: Fixed wireless boils down to simple economics
To be clear, the fixed wireless market isn’t all sunshine and rainbows. For example, Google acquired fixed wireless provider Webpass in 2016, but in the intervening months Webpass’ chief executive Charles Barr left the company and Webpass withdrew from the Boston market.
Separately, Australia’s big fixed wireless project, NBN, said recently it won’t be able to offer 100 Mbps services as promised because such offerings would overtax its network.
But these two examples highlight the fact that fixed wireless boils down to basic economics. Does the technology and spectrum you have cover enough people at prices and speeds that would make it profitable, in a place where you could gain market share? Webpass couldn’t make that equation work in Boston, but Starry apparently could.
And really, that’s kind of the beauty of fixed wireless. It’s probably not going to work everywhere—for example, in places where high-speed wired connections are readily available and where geography and household density make effective wireless coverage difficult. But in other places—where households are close together and DSL is still prevalent—fixed wireless makes a lot of sense. And thanks to new wireless technologies, more available spectrum, government money for rural broadband, and customers increasingly dissatisfied with their wired providers, the potential market for fixed wireless appears set to grow.