The FCC auction for Citizens Broadband Radio Service (CBRS) Priority Access Licenses (PALs) holds opportunity for mobile network and cable system operators, wireless internet service providers and many others.
Now that the 3.5-GHz Citizens Broadband Radio Service (CBRS) spectrum has officially been made available as part of the Initial Commercial Deployments (ICDs), the next major step for the spectrum is the Priority Access Licenses (PALs) auction in June 2020. The FCC schedule calls for these auctions to start on June 25, 2020 — although, as with most things related to the FCC and auctions, this may slip a little.
To recap, seven 10-megahertz-wide PALs will be available in each county across the United States. One bidder may acquire as many as four PALs. The total CBRS spectrum band is 150 megahertz of 3.5-GHz — when the PALs are not in use or if the PALs in a particular county are not sold, the spectrum is available for GAA (General Authorized Access). Thus, if the PALs are not sold or are underused, the spectrum does not lie fallow and can be used by the community.
Who is likely to buy PALs? How will the spectrum be used? And what equipment will be needed?
Let’s address the last question first: what network equipment will be needed to use a CBRS PAL? The answer is simple: the same equipment as is used for the CBRS GAA. Any OnGo equipment will be able to access the whole CBRS band, both GAA and PAL. Each CBRS radio is connected to a SAS (Spectrum Access System) that manages each radio in the band and ensures there is no interference. If a PAL is not being used or is unassigned, the SAS manages the use of that band by other CBRS radios. In addition, the smartphones and mobile devices that have access to CBRS (and there are now many) will also be able to use the PALs.
What will the demand for PALs be?
The answer to this question has an element of “It depends.” The variable is really the C-Band spectrum. Because CBRS and C-Band are both mid-band spectrum (the two are both between 3.5 and 3.7 GHz), demand is high among the mobile network operators (MNOs) — mid-band spectrum has been identified globally as a 5G wireless communications band.
Depending on what rules the FCC decides on for the C-Band spectrum, this spectrum will either be part of a private sale or a public auction. If the private sale route is taken, then those interested will most likely be able to get access to the spectrum before the PAL auctions. This would then satisfy some of the need for mid-band spectrum and would therefore deflate the demand for the PALs.
Conversely, if the C-Band goes for public auction, this will most likely not take place until late 2021 (unless another auction is moved) or later. In this case, the demand for CBRS PALs will be high, simply because this is the first chance to access licensed mid-band spectrum.
Who is most likely to buy a PAL?
PALs are most likely to be in demand by the following:
· Mobile network operators, who will view this as an opportunity to obtain up to 40 megahertz of mid-band spectrum to supplement their other spectrum holdings
· Cable multiple-system operators (MSOs), which have been much discussed as having potential to acquire PALs
· Existing CBRS-based wireless internet service providers (WISPs), which have been grandfathered into the current rules, but that may see this as an opportunity to lock in more spectrum
· Enterprises, local governments and others that want to obtain spectrum for a specific area
· Telcos that do not currently have wireless licenses and that view CBRS as an opportunity to enter the market
· Investors who see the opportunity to obtain CBRS spectrum and then subdivide it into smaller parcels for use by smaller enterprises and entities.
It is this last group that is particularly interesting. Because PALs are at the county level, the chances of an enterprise being able to afford a PAL is unlikely, unless it has significant spectrum needs across the entire area. But a larger enterprise/investor could buy one or more PALs in a given area and then make the spectrum available to a single commercial building owner or single warehouse. For example, imagine one of the major public cloud providers obtaining PALs across the United State and then making the spectrum available to their cloud customers for intenet of things (IoT) applications.
How will the spectrum be used?
As with the GAA, the opportunities for PALs are literally endless. But a few major opportunities are being discussed:
· MNOs simply use the PALs to supplement the existing cellular bands, including with carrier aggregation.
· Cable MSOs could use PALs to extend their cable networks (adding “homes passed”) and provide internet service where they currently have no cable plant. The cable MSOs could also use the licenses to provide dedicated mobile services.
· Larger nationwide enterprises could buy a PAL in each county (or in major metro areas) to provided private mobile services to their mobile employees using dedicated spectrum (and therefore not dependent on availability of GAA).
· PALs can also support private LTE applications and services, just as the GAA can, but providing dedicated spectrum to the owner to provide a guaranteed level of service.
Iain Gillott is the founder and president of iGR, a market strategy consultancy focused on the wireless and mobile communications industry. The company researches and analyzes the effect new wireless and mobile technologies will have on the industry, on vendors’ competitive positioning and on its clients’ strategic business plans. Visit www.igr-inc.com.
CommScope’s Ruckus CBRS portfolio and Attabotics’ 3D robotic supply chain automation system were demonstrated as part of Microsoft Azure capabilities for private LTE networks during Microsoft Ignite, the Microsoft annual gathering of technology leaders. held Nov. 4-8, 2019 in Orlando, Florida.
Ross Ortega, partner PM, Azure Networking said, “The Microsoft Azure-based private LTE solution builds on decades of Microsoft enterprise success stories. In collaborating with CommScope and Metaswitch, we see opportunity to enable IoT applications and take advantage of the security, latency and bitrates provided by private LTE networks for our mutual customers.”
CommScope’s Ruckus Citizens Broadband Radio Service (CBRS) portfolio enables enterprises to easily deploy private LTE networks to support innovative Internet of Things (IoT) applications using wireless spectrum recently made available by the United States Federal Communications Commission (FCC). Designed with enterprise IT operations in mind, this new portfolio greatly simplifies the management and deployment of a cellular network. Now, enterprise IT administrators have a new wireless tool that can be leveraged for a wide variety of applications that were not previously possible.
“We are proud that the Ruckus CBRS LTE portfolio was part of this innovative Microsoft demo at Ignite 2019,” said Joel Lindholm, vice president of CBRS Business at CommScope. “Using the end to end encryption of the LTE network, enterprise customers can feel comfortable with the secure nature of this new network. This demonstration highlights how private networks can be used by enterprise customers for automated applications such as Attabotics.”
The Ruckus CBRS portfolio uses separate dedicated spectrum from licensed cellular and Wi-Fi, thus providing cellular-like reliability, mobility, security and quality of service, but with the simplicity of Wi-Fi. Integration of the Ruckus CBRS portfolio with Microsoft Azure’s networking and edge connectivity solutions will enable enterprises to successfully address challenging and critical use cases with dedicated, secure, ultra-high-quality private LTE networks
Ever since the carriers pulled back on deploying additional DAS networks, the in-building wireless industry has been trying to break into the market for enterprises that occupy between 100,000 square feet and 500,000 square feet of space, known as the “middleprise.”
Much progress has been made. Measures have been undertaken to make these systems less expensive, less intrusive and quicker to deploy. Yet the growth expected in in-building wireless (IBW) systems has remained elusive, perhaps until now.
Yet the growth expected in IBW has remained elusive, perhaps until now.
The Citizens Broadband Radio Service at 3.5 GHz could prove to be a great enabler of private LTE systems, which give enterprises something they crave: control. Parallel to the evolution of DAS, quantum leaps have occurred in the area of evolved packet cores, the critical control element of the mobile network that enables the user’s connectivity. Instead of depending on the carriers’ cores, today an enterprise can have a dedicated core on the premises or use one in the cloud providing much of the same functionality as the traditional carriers’ core, but for a fraction of the cost and operational complexity.
I have wondered whether a company could provide service to enough in-building venues to become known as a niche wireless carrier. Is Boingo Wireless a carrier? It is, if you count its Wi-Fi subscribers. Otherwise, leasing indoor wireless infrastructure to an enterprise just makes a firm similar to a tower company.
Then I learned about Geoverse, which is owned by ATNI, a company that owns and operates mobile, fixed and cable television (CATV) providers in Latin America, the Caribbean and the United States. As a result of this relationship, Geoverse can leverage ATNI’s existing roaming agreements with licensed major carriers for its private LTE solutions. In addition, Geoverse’s blockchain transaction platform, known as GeoTrade, presents an opportunity for monetizing the roaming agreements between the public carrier networks and the in-building private LTE network. Geoverse has a relationship with Ruckus Networks and, eventually, will add every major indoor OEM.
Another company involved in monetizing the CBRS spectrum, Syniverse, has teamed with Ruckus Networks and Federated Wireless to develop private, high-speed and secure wireless networks. Syniverse provides the LTE core network, Ruckus Networks provides the LTE access points for the radio network, and Federated Wireless monitors and manages the spectrum.
The key to monetizing these private networks is a blockchain ledger-based billing and settlement system that allows operators manage the logging, clearing and settlement process for the commercial exchanges between parties.
The final piece of the puzzle is the availability of spectrum in the CBRS band, which uses general access licenses to quickly get frequencies into the hands of the enterprises at no cost. If you take access to frequencies, add control over the evolved packet core and the ability to monetize the system, you may just be looking at the future of enterprise in-building wireless.
I am no one to forecast how companies will attack the marketplace, but I have noticed a couple of interesting personnel changes. ExteNet, which has 2,000 CBRS-ready systems in place and can provide its own core, hired Jim Hyde, a man with a rich history on the carrier side (Western Wireless, T-Mobile UK, Ntelos). And then there is Stephen Bye, with more than 27 years of experience with wireless, cable and wireline service providers, who left C Spire to join another CBRS player, Connectivity Wireless Solutions.
Will ExteNet, Connectivity Wireless, Geoverse or Syniverse or some other company become a niche wireless carrier catering to the areas inside of buildings, while the major carriers cover the space outdoors? The market will decide, but the ingredients are there.
SBA Communications came in with good domestic site leasing revenue numbers in the third quarter, thanks to continued 4G densification and early 5G deployments. Delays in the Sprint/T-Mobile merger have put short-term stress on the tower industry, But SBA officials were confident that when the merger is cleared, 5G will take off. And so with the tower industry.
Jeffrey Stoops, SBA president and CEO, also gave visibility to SBA’s plans for involvement in the Citizens Broadband Radio Service, after the auction puts priority access licenses (PAL) into the hands of the carriers and the cable companies.
“We had another solid performance in the third quarter,” Stoops said. “In the United States, we believe we are at the beginning of a long-term 5G deployment cycle that we expect will sustain activity levels for quite some time.”
With all the time and energy carriers are sinking into actively planning the 5G ecosystem, it is only a matter of time before it takes off, according to Stoops. Additionally, commitments by T-Mobile and Dish to build out extensive 5G networks add further proof that the technology will begin growing soon.
“Once there is clarity around the Sprint/T-Mobile merger, tower activity will explode. We believe the 5G iPhone … will prove to be decisive catalyst,” Stoops said. “We anticipate this type of activity to continue for at least the next several years. In the future 5G networks will require the deployment or redeployment of low- and mid-band spectrum further solidifying the importance of macrosites.”
Primarily a macrosite company, SBA also sees a future for growth in in-building wireless. It received one of the first test CBRS licenses and has been trialing new uses primarily for in-building applications where DAS is not economical. In anticipation of CBRS, the company has been growing its portfolio of properties and now manages close to 14,000 properties, in addition to sites it owns. In the third quarter, SBA invested in Federated Wireless, the inventor of the spectrum access system, to further its reach into CBRS.
“We believe the upcoming CBRS auction of priority access licenses [and the General Authorized Access licenses] will unleash a new era of demand for both macro and in-building deployments,” Stoops said.
Domestic Leasing Revenue Increases 6 Percent
All four major carriers were active during the third quarter and accounted for 84 percent of the total leasing revenue. Amendment activity was accounted for 84 percent of newly signed domestic leasing revenue and 16 percent from new leases.
“These amendments represent upgrades to our customers’ existing networks through technological improvements, the deployment of new spectrum bands and the addition of capacity,” Stoops said.
Domestic cash site leasing revenue was $371.4 million in the third quarter of 2019 compared to $350.4 million last year, an increase of 6 percent. Domestic site leasing segment operating profit was $310.9 million, an increase of 8.5 percent year over the year. Sequential quarterly numbers were impacted by the Sprint/T-Mobile merger delays.
“Domestic operational leasing activity, representing new revenue placed under contract during the quarter, was again very solid in the third quarter, although down sequentially from the second quarter because of the delays in the resolution in the Sprint/T-Mobile merger,” Brendan Cavanagh, chief financial officer, said. “Our domestic leasing application backlog continues to be strong, as well, indicating a significant amount of future investment into our customers’ 4G and 5G networks.”
SBA increased its outlook for the fourth quarter site leasing revenue by $4 million, but the outlook also includes some moderation in the services business because of the slowdown from the first half of the year in the activity of Sprint, T-Mobile and Dish Network as they await approval of the Sprint/T-Mobile merger.
“This is logical and expected under the circumstances. We expect an immediate escalation of activity once the outcome of the merger becomes clear and long-term network decisions can be made with certainty,” Cavanagh said.
SBA continued to see churn from Clearwire, Metro and Leap during the quarter as expected. The tower company will churn off $5 million annually for the next two years from these terminations. The churn numbers also include $6 million of annualize churn incurred in the fourth quarter of 2018 from legacy iDEN leases. This is the last quarter where churn numbers will be impacted by iDEN.
During the third quarter of 2019, excluding the sites from the previously announced South Africa investment, SBA acquired 78 communication sites for total cash consideration of $27.8 million. SBA also built 98 towers during the third quarter of 2019.
On August 30, the tower company closed on its option to acquire all but 6 percent of a joint venture in South Africa, including 889 towers, for $140 million. SBA now owns or operates 30,904 communication sites, 16,385 of which are located in the United States and its territories, and 14,519 of which are located internationally.
The Citizens Broadband Radio Service at 3.5 GHz is ushering in a new approach to in-building connectivity, allowing venues, enterprises and building owners to control their wireless service through dedicated private LTE systems. One company, Geoverse, is taking it one step further serving as an “inside-out” mobile operator.
Geoverse is owned by ATNI, a public company that has been owning and operating mobile, fixed, and CATV providers for over 30 years in Latin America, the Caribbean and the United States. As a result of this relationship, Geoverse can leverage all the existing roaming agreements ATNI has established with major carriers for their Private LTE solutions. In addition, Geoverse’s patented platform known as GeoTrade presents a real opportunity for monetizing the roaming agreements between the public carrier networks and the in-building Private LTE network. The integrated roaming and monetization capabilities are key differentiators when compared to other in-building solutions.
“When I heard that enterprises were going to be able to build their own private LTE systems, that’s when I realized we were really on to something,” Carl Gunell, Geoverse co-founder and SVP of Marketing and Business Development, told AGL eDigest. “We thought there might be 10,000 or more private LTE systems in the United States some day and they will need a commercial relationship between the network and the carrier.”
Cellular was built for outdoor use, but 80 percent of the time wireless calls are initiated indoors. Cell towers, however, do not penetrate the walls and windows of office buildings very well. DAS deployments in buildings have only proved to be cost effective in the largest venues and buildings. Many companies have tried different methods to make in-building wireless less expensive and to speed up the process of securing a signal source from the carriers.
“We are moving away from the traditional DAS model that required a lot of carrier coordination,” Gunell said. “Now with CBRS being commercialized, we put in less costly infrastructure that will be in the control of the building owner or enterprise without sacrificing any capability in terms of functionality such as roaming.”
Ericsson’s Radio Dot System provides in-building coverage and capacity for Geoverse’s enterprise private LTE offering. Geoverse and RF Connect have partnered to streamline the design, network engineering, and deployment of some early projects. However, Geoverse has an open solution architecture and will also use other vendors, VAR’s and integrators as the needs demand. Additionally, Geoverse has its own in-house LTE evolved packet core called GeoCore. GeoCore is the network element that enables the seamless roaming between the Private LTE networks and Public Carrier Networks.
“We look at CBRS, not as a new technology, but as a new paradigm. What is really rule-breaking about the service is it gives the control over the network to the enterprise,” Gunell said. “With CBRS, cellular communications is no longer the private domain of the major mobile operators. If a building wants better connectivity, it is on their budget not the carriers’ budgets. It’s on their timeline not the carriers’ timelines. The enterprise doesn’t have to beg for a signal source.”
Geoverse’s full-building solution when used alongside IoT sensors enables a ‘smart building’ can help a building owner or enterprise identify inefficient systems and processes, monitoring temperature, lighting, room use and desk use.
“The landlord owns all the data concerning how many people are using each small cell in the building and at what times they occupy those spaces. They have visibility into network operations and performance,” Gunell said.
They can also use the same CBRS network as the common platform for all kinds of connectivity, providing hubs and gateways to connect legacy devices.
When Geoverse and the enterprise build a Private LTE network inside of the building, that network can offer additional coverage and capacity for the carriers. Carriers want to be assured of call quality and the GeoTrade platform assures this metric via Service Level Agreements.
“We can guarantee AT&T that we have five-nines capability in the building, leading to satisfied users,” Gunell said. “Because the GeoCore EPC can be deployed inside the Building, you get a 5G-like experience with a 4G LTE Advanced Network, with low latency and high reliability.”