The FCC on Friday moved closer to auctioning off another big swath of spectrum for 5G—this time, the combination of bands 37, 39 and 47 GHz, which represents the most spectrum ever to be auctioned at one time. But they’re falling short in the midband spectrum arena, which is where it counts for the double whammy of capacity and coverage.
None of this is new. CTIA has been fighting for years to get midband spectrum available for 5G. Republican Commissioner Michael O’Rielly has spent years trying to get midband spectrum out the door, including the 3.5 GHz and the 3.7-4.2 GHz bands. FCC Commissioner Jessica Rosenworcel, a Democrat, time and time again has sounded the alarm about the need for midband spectrum.
But the alarm bells rose to a higher level on Friday, when FCC Chairman Ajit Pai presented his latest 5G strategies at a White House event with President Trump. There was no mention of midband spectrum during that event, but there was plenty of talk about it before and after.
Earlier in the day, the FCC voted to seek comments on proposed application and bidding procedures for the 37, 39 and 47 GHz auction. Commissioner Brendan Carr made a point of taking a step back and said the process put in place in the U.S. for allocating and auctioning spectrum is actually pretty remarkable and one that was arrived at after years of experimenting with other approaches.
But O’Rielly registered his disappointment that the 37, 39 and 47 GHz millimeter wave auction is going to occur so late in the year: Dec. 10.
“When the commission and the chairman talked about the second half of 2019, I didn’t know we were talking about just a couple minutes before the new year,” he said. “These perpetual delays and exaggerated timelines to design and test auction software and actually start the auction are past the point of acceptable. For the money the commission is spending on auction issues we should be getting more functionality and timeliness.”
Mid-band for rural areas
In separate press conferences following the meeting, Rosenworcel said the more she studies the midband spectrum situation, the more concerned she gets.
“We are relying on high-band spectrum for which the network densification costs are exceptionally high and unlikely to be economically viable in vast swaths of this country,” she said. “If we truly want to deploy 5G service to everyone, everywhere, we are going to have to pivot to mid-band, and the time to do it is now.”
Commissioner Geoffrey Starks, also a Democrat, attended CTIA’s 5G Summit earlier this month, where a number of the senior industry leadership folks in attendance emphasized that midband is “where we need to start to focus even more. We’ve long known that a mix of low-, mid- and high-band is what is needed here,” and midband is clearly and area where the FCC needs to step it up, he told reporters.
Some folks might point to the 3.5 GHz Citizens Broadband Radio Services (CBRS) band as an example of great midband opportunities for wireless carriers, but that’s not structured in a way that’s the most advantageous for them. Yes, a lot of time was spent refining the rules in their favor, but it’s still considered encumbered spectrum.
O’Rielly said he was disappointed that the 3.5 GHz auction will probably occur next year, and that’s problematic. On the other prospective midband spectrum—at 3.7-4.2 GHz, or the C-Band—“I’m ready and willing to close that discussion and move forward,” he said, but his colleagues on the commission are still digesting pieces of that.
O’Rielly has previously expressed disappointment about federal users reconsidering their approach to clearing the 3.45-3.55 GHz frequencies and has called for further study of frequencies between 3.1 and 3.45 GHz for additional wireless uses.
“I think there’s a lot of work to do on midband. It’s incredibly important,” he said. “There’s much more work to go, and I’m committed to make that happen.”
During his presentation at the White House, Chairman Pai discussed the 5G FAST Plan, efforts to make it easier to install wireless infrastructure and modernizing regulations related to fiber build-outs. He also talked about the next big millimeter wave auction and the $20.4 billion Rural Digital Opportunity Fund to extend high-speed broadband to up to 4 million homes and small business in rural America over the next decade.
Where’s the 5G?
Referring to the spectrum auction and funding for rural broadband: “It is unclear what either of these announcements have to do with 5G, or how they are connected,” wrote Jonathan Chaplin of New Street Research in a note to investors. “It’s true that the millimeter wave spectrum will be deployed with 5G eventually. It is a magnificent amount of spectrum—there will be more than 5 GHz available in millimeter wave when all is said and done—but the utility of this spectrum is very limited. This should be obvious to anyone following the 24 GHz auction which is petering out at around $2BN for 700 MHz of spectrum nationwide (less than $0.01 / MHz-POP!).”
According to Chaplin, if the government is serious about 5G, they ought to be focusing on getting CBRS and the C-Band spectrum into the market as quickly as possible.
“They should also approve the T-Mobile/Sprint deal... The “Real 5G” is going to flourish in what we now call mid-band spectrum, between 2-5 GHz and 4.2 GHz,” he wrote.
Chaplin & team have previously written that the 3.3-4.2 GHz band is ideal for 5G because it’s high enough in frequency to see the benefits of massive MIMO and beam forming while low enough that carriers can leverage existing infrastructure while still penetrating walls and windows. While the lower portion of the band is not ideal for use by wireless carriers in the U.S., the FCC is exploring options to repurpose the upper portion between 3.7-4.2 GHz, also known as the lower C-Band.
Morgan Stanley’s Simon Flannery said the C-Band situation remains complex and may be impacted by the T-Mobile/Sprint merger review timeline, “but we continue to believe that the FCC is likely to favor the CBA’s market-based approach as the best way to get the spectrum into use for 5G in a timely manner.”
That may be the case, but a lot of problems are still brewing with the C-Band Alliance (CBA) approach. The CBA has proposed relinquishing 200 megahertz (including a 20 MHz guard band) under its terms, but a lot of wireless industry stakeholders don’t find the terms palatable and would prefer a more FCC-initiated auction process to take place.
The time advantage that the CBA proposal initially offered also doesn’t look like an advantage anymore because so many entities are talking about legal challenges that will just prolong the situation, and the satellite companies insist they can’t give up more than 200 megahertz, which is also problematic for the terrestrial wireless industry. Chairman Pai acknowledged the complexity of the situation last month when he said it’s important for the FCC to make the right decision rather than “make a right now decision” because there are so many interests that need to be accommodated with the C Band.
Fortunately, Friday's White House event—and it almost seemed staged for this very reason—served to put to rest any questions about a nationalized 5G network that had been lurking for a while now.
Both Rosenworcel and Starks observed that the way spectrum policy is being handled by this administration is downright confusing. That’s not surprising because they are Democrats after all. But when one arm of the government is raising issues about the 24 GHz auction just as it’s getting underway—and these are not trivial issues—that’s not cool. And that’s just one example.
Rosenworcel noted that she has been involved in spectrum policy for a while now.
“I have never before seen the right and the left hand of the U.S. government get into public disputes about our airwaves in advance of the World Radio Conference; that’s just unacceptable,” she said. “That’s not how we’re going to be able to lead … We need to fix it if we want to lead the world in 5G.”
Throwing a 5G party at the White House might grab some headlines in the short term, but it’s not doing the nation any favors when the type of spectrum that’s needed to cover large swaths of the country isn’t invited to the party. — Monica | @malleven33
“Editor's Corners” are opinion columns written by a member of the Fierce editorial team. They are edited for balance and accuracy.