What Does the Future of CBRS Priority Access Licenses Look Like?

By Iain Gillott, contributing editor

January 16, 2020

Gillott

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.