US path to mid-band spectrum not as simple as some make it seem

Despite many proclamations and posturing during the development years of 5G, mmWave is not living up to expectations, but securing valuable mid-band assets is becoming an increasingly complex project.

As it stands in the US market, T-Mobile US has access to 2.1 GHz spectrum to deliver 5G services. These assets were accessible due to the recently approved merger with Sprint and offers a significant advantage over Verizon and AT&T, both of whom are still operating in the high-frequency airwaves, the mmWave, which delivers high-speed and low coverage for an overall substandard experience.

Over the next 12-18 months, theoretically, more mid-band spectrum should be made available to the likes of Verizon and AT&T, as well as Dish as it expands its offering, through three separate spectrum auctions. However, there is still plenty which can go wrong in the meantime according to Chris Pearson, President of 5G Americas.

“If history shows us anything it is that we have not been very successful at co-operation,” Pearson said during a call with Telecoms.com.

What Pearson is referring to here is collaboration between private industry and public organisations to either harmonise spectrum usage or clearing the bands to offer more power to the mobile service providers. There are success stories, clearing the 1700-2100 MHz airwaves is one, but these outcomes are seemingly more the exception rather than the rule.

The issue with spectrum is simple. High frequencies offer exceptional download speeds but very poor coverage, while at the other end with low-frequency bands a telco can offer excellent coverage, but the download speeds and latency will be woeful. This is why mid-band assets are so important, it is a more palatable compromise between speed and coverage, a mobile experience which can be sold as an upgrade to customers.

When we asked Telecoms.com readers about how important the mid-band airwaves are 68% said without these assets it is impossible to deliver an attractive 5G service. Only 3% said the industry should be paying more attention to mmWave, and 8% believed mid-band spectrum is critical for the moment but its importance would fade behind mmWave eventually.

“Can we move along without it,” Pearson said. “Absolutely. But for the long-term we will need more spectrum.”

As Pearson highlights, there are three spectrum auctions on the horizon which are worth paying attention to. At the end of July, the ‘CBRS’ band at 3.5 GHz will make 150 MHz of spectrum available to the industry. In December, the C-Band airwaves (3.7-4.2 GHz) should be cleared up to make an additional 280 MHz of spectrum available. And the NCIA (NATO Communications and Information Agency) is currently producing a report to free up more assets in the 3.1-3.55 GHz range.

Theoretically, there should be plenty of spectrum available for the mobile network operators to deliver a comprehensive 5G solution, though this is under the assumption that everything runs smoothly.

Firstly, the ‘CBRS’ auction has already been delayed once. It should go ahead of course, but there is always a risk.

Secondly, the C-Band auction, scheduled to take place in December, is currently under threat from legal action. Several smaller satellite broadcasting companies who are being asked to vacate and/or move operations in these airwaves are kicking up a fuss. The aim is to shift the satellite operators in the 3.7-4.2 GHz range into a consolidated 200 MHz block, which would offer plenty of room for the telcos to play around it, but there are dissenters.

PSSI Global Services has filed a lawsuit in the District of Columbia arguing the FCC is crippling the entire industry by forcing through the changes in this spectrum band. Should this legal challenge gather momentum or spin-off into different directions, it could impact the availability of assets in the C-Band range, and subsequently delay the auction.

The final area is another very difficult issue to manage. The report which is being produced for the 3.1-3.55 GHz range has only completed one of six sections. This report is supposed to shed light on what the spectrum is being used for, by whom and ways which it can be rationalised to add more available spectrum for mobile operators. But Pearson highlighted that progress has been sluggish.

The issue seems to be that it is difficult to understand what the spectrum is currently being used for, the incumbents are not being the most helpful as there are confidentiality hurdles to negotiate. No-one officially knows what this spectrum is actually being used for which usually means it is something to do with the military or intelligence services.

Without co-operation from the incumbents, it becomes very difficult to audit these airwaves and create a logical strategy to move forward.

To understand the importance of mid-band spectrum, it is worth looking at the experience being delivered without access.

According to OpenSignal’s most recent analysis of the US market, Verizon is delivering speeds few other international telcos can compete with over mmWave, but this digital dream is only accessible to 0.5% of its 5G subscribers. Elsewhere, for example in the UK where mid-band spectrum is being utilised, there is a speed upgrade (albeit nowhere near as much) but 12X more users are able to access the 5G airwaves.

What is critical about 5G right now is not delivering gigabit speed over the air, there are no applications which require this today, but demonstrating 5G is an upgraded service. Speed and latency improvements are a must, but if the users cannot access them the money spent on 5G networks are a complete and utter waste of time.

The US does of course recognise this situation, Pearson highlighted there is momentum gathering in support of the telcos in Washington, however it is far from an ideal situation. This is a pain point, though there is plenty of risk on the horizon to acting as a blocker for the solution.

New Zealand sensibly abandons latest 5G auction and just hands the spectrum over

A chunk of mid-band spectrum was due to be auctioned-off in New Zealand around now, but COVID-19 has caused a change of plan.

The Radio Spectrum Management department of the NZ government recently made the following announcement: “In May 2020, the Auction for short-term, early access rights in the 3.5 GHz band for 5G services (Auction 20) was cancelled. This was due to the constraints imposed by the Covid-19 pandemic. Instead, a direct allocation process will be undertaken. Offers will be made of 40 MHz to Dense Air, 60 MHz to Spark, and 60 MHz to 2degrees.”

Spark and 2degrees are two of the three Kiwi MNOs, alongside Vodafone NZ, which apparently has quite enough mid band spectrum already, thank you very much. Dense Air is a UK-based company that specialises in small cell connectivity. Understandably Spark and 2degrees are happy with the decision.

“Securing 3.5GHz spectrum was critical for the rollout of a full suite of 5G services, so we would like to acknowledge the Government for facilitating the allocation, which will enable us to proceed with our planned 5G roll out at pace,” said Spark CEO Jolie Hodson. “We plan to switch on 5G sites in a number of major centres and regions across the North and South islands over the next year. To maintain this momentum, we are keen to work with Government to accelerate the timeline for the longer-term spectrum auction, which is currently scheduled for November 2022.”

“This decision makes sense. At a time when the impact of Covid-19 means operators are having to make tough calls on how they spend their capital, it needs to be focused on the networks delivering the capacity people need – and can use – today,” said 2degrees Chief Executive Mark Aue. “At the same time, access to 5G spectrum will allow 2degrees to continue its 5G network planning and site acquisition so it can build and test the technology. This will provide time for 5G uses cases to develop, and initial deployments, in advance of long term spectrum rights that will power national 5G services from late 2022.”

Vodafone seems to have kept quiet on the matter, but it must be secretly annoyed at the good fortune of its rivals. Maybe it will have a quiet word with the government behind the scenes, asking for a cheeky bit of spectrum sometime in future, to level the playing field once more.

It’s good to see that governments and regulators are capable of forgoing easy money when the circumstances demand radical action. Besides, public money is already being thrown around in a bid to stave off another great depression, so a few Kiwi buck is just a drop in the ocean. But credit where it’s due, this is not the time for the public sector to be extorting money from the private sector and NZ deserves credit for acknowledging that and acting accordingly.

O2 set to scupper next UK 5G auction

UK operator O2 is apparently unhappy with the way Ofcom plans to conduct the next 5G spectrum auction and could launch a legal challenge.

There doesn’t seem to have been any public announcement, but the FT has been chatting to shadowy figures who reckon O2 sent a letter to Ofcom during the consultation period for the auction, which recently ended. The letter effectively warns of the potential of a legal challenge, which would delay the auction for as long as it took for the courts to make a call on it.

The issue seems to be the matter of contiguous spectrum. Ofcom wants to flog lots of little bits of spectrum but O2 would rather just bid for one big bit, on the perfectly reasonable grounds that it would be a lot more useful for providing the kind of fat bandwidth 5G needs to deliver on is speedy promises.

Ofcom gave the FT a fairly passive-aggressive quote: “People and businesses need fast, reliable mobile services more than ever, so we want to auction these airwaves as soon as possible. We’re really disappointed that one operator has threatened to launch a legal dispute that could slow things down for mobile users and the economy.”

In other words O2 is selfish, bordering on treasonous for daring to raise an objection. There’s a simple solution, Ofcom: don’t chop the spectrum up. Then again one of the other operators would presumably moan if that happened, so maybe you can’t win. But it’s Ofcom’s job to sort this sort of thing out, so maybe it should adopt a more conciliatory tone and try to meet O2 in the middle.

O2 set to scupper next UK 5G auction

UK operator O2 is apparently unhappy with the way Ofcom plans to conduct the next 5G spectrum auction and could launch a legal challenge.

There doesn’t seem to have been any public announcement, but the FT has been chatting to shadowy figures who reckon O2 sent a letter to Ofcom during the consultation period for the auction, which recently ended. The letter effectively warns of the potential of a legal challenge, which would delay the auction for as long as it took for the courts to make a call on it.

The issue seems to be the matter of contiguous spectrum. Ofcom wants to flog lots of little bits of spectrum but O2 would rather just bid for one big bit, on the perfectly reasonable grounds that it would be a lot more useful for providing the kind of fat bandwidth 5G needs to deliver on is speedy promises.

Ofcom gave the FT a fairly passive-aggressive quote: “People and businesses need fast, reliable mobile services more than ever, so we want to auction these airwaves as soon as possible. We’re really disappointed that one operator has threatened to launch a legal dispute that could slow things down for mobile users and the economy.”

In other words O2 is selfish, bordering on treasonous for daring to raise an objection. There’s a simple solution, Ofcom: don’t chop the spectrum up. Then again one of the other operators would presumably moan if that happened, so maybe you can’t win. But it’s Ofcom’s job to sort this sort of thing out, so maybe it should adopt a more conciliatory tone and try to meet O2 in the middle.

Proximus halting some 5G deployment to calm health fears

Belgian telco Proximus will halt 5G network deployment in the city of Ottignies-Louvain-la-Neuve to hold a Town Hall to address all health concerns of citizens.

Although the rumours connecting 5G to COVID-19 or the growth of an extra ear might seem preposterous to those in the industry, some members of the general public are harbouring health concerns, and an even smaller proportion are turning to criminal activities to damage infrastructure.

There is no circumstance where vandalism and arson on telecoms equipment is acceptable, neither is physical and verbal abuse to staff, but the industry has left a void in education. This may go some way to explaining why some people believe the absurd and baseless rumours which are being spread by conspiracy theorists and chatroom trolls; the telco industry has never fully explained radio technology, just assumed everyone would be OK with a network upgrade.

This situation is further compounded when it is not immediately obvious why the upgrades are being performed. As it stands, 4G works but the general public has not seen the same data as industry insiders demonstrating the rapid growth in data usage or the limitations of today’s networks. Without these explanations, the soil has been fertilised to allow these ridiculous claims to bed in and grow.

In Belgium, it appears Proximus is addressing the concerns prior to the 5G engine revving through the gears.

“The City of Ottignies-Louvain-la-Neuve has just obtained from Proximus the answer to the question it has been asking since March 31: the deployment of 5G via the antennas present on its territory has been stopped,” a statement on the City’s website said. “The operator has also promised to participate in a public information session, during which he will explain his project to citizens.”

As it stands, the public consultation for the upcoming auction will not be open for citizens to respond to, which has irked city officials somewhat as it is believed the debate should be societal and not just a technical one. That said, hopefully the Town Hall and supplementary documentation will be sufficient to provide enough information to dispel the ludicrous myths, disarm the pseudoscience with facts and remove any faith which has wrongly been placed in the conspiracy theorists.

The spectrum auction itself has been postponed during the COVID-19 outbreak, though we suspect much of the work to deploy a 5G network would also have been delayed. Five applications are in the running for spectrum (Proximus, Telnet, Orange Belgium, Cegeka and Entropia Investments) which will be split into five 40 MHz blocks between the 3.6-3.8 GHz band. The telcos will have to pay €800,000 upfront for a 15-year licence, as well as €420,000 per annum.

The pause on 5G rollout, which was likely slowing due to COVID-19 in any case, should give an opportunity to address the concerns of the general public to ensure the spate of vandalism, which has crept from the UK to the Netherlands, does not spread any further.

Over the last few weeks, there have been a number of arson attacks directed towards 5G infrastructure in both the UK and the Netherlands thanks to a small number of criminals believing the fantasies of false prophets. Celebrities have been effectively endorsing messages from the likes of former-BBC Presenter and current-nutjob David Icke, with a small number of gullible fools drinking the Kool-Aid.

Not only are these actions illegal and monstrously misinformed, the consequences extend to inhibiting emergency services from doing vital work in response to the coronavirus.

However, the Town Hall approach from Proximus here might create a blueprint to follow. The General Public needs to be educated and brought on the 5G journey with everyone else. It cannot just be assumed citizens will just blindly follow the telcos down the virtual trail to the digital economy, hands have to be held and lessons taught.

The only way to disarm the dangerous and idiotic conspiracy theorists is to provide the general public with the correct information to ensure that sensible individuals can make correct decisions. The tinfoil hat army will always be lurking in the delusional corners, but as long as the vast majority realise that the likes of Eamonn Holmes is talking as much sense as a drunken Charlie Sheen, the world will be a harmonious place.

US 3.5 GHz spectrum auction delayed by a month

The US Federal Communications Commission is delaying an imminent spectrum auction by a month coz of coronavirus.

Auction 105 is for the part of 3550-3650 MHz band currently being used for CBRS (Citizens Broadband Radio Service) that the FCC has decided to license. It’s not the biggest 5G auction ever, but operators are keen to get hold of as much mid-band spectrum as possible in order to be able to deliver on their lofty 5G bandwidth promises. It was due to take place in 25 June, but has now been delayed until 23 July.

“Many Americans have had to make tough decisions on how they do business in this rapidly changing environment, and the FCC is no different,” said Chairman Ajit Pai. “After consulting agency staff within the relevant bureaus and offices, we determined that it was in everyone’s best interest to make these changes. But we remain committed to holding the 3.5 GHz auction this summer and look forward to beginning this important mid-band auction in July.”

Given the scale and severity of the pandemic, merely delaying by a month seems somewhat optimistic. The decision may well have been influenced by President Trump’s current rhetoric on the length of time the country will need to be locked down (see below). They presumably feared a longer delay would have indicated a less bullish stance, but we wouldn’t be surprised to see that date pushed back again before the summer.

France to postpone April 5G auction – quelle surprise

An auction of a bunch of mid-band 5G spectrum was due to take place in France next month, but now it isn’t coz of COVID-19.

The French Telecoms regulator Arcep announced the auction last November in simpler, more innocent times. 310 MHz of spectrum in the 3.4-3.8 GHz band was due to be on the table in four 50 MHz blocks and 11 10 MHz morsels. You can see how Arcep envisaged the process playing out below.

While, in principle, the auction could technically take place despite the severe restrictions on movement currently imposed in France, in practice there’s little point in pushing ahead with such things when all the follow-up activities would be so difficult to perform. Arcep has yet to publish a press release announcing the cancellation, but has individually advised plenty of media that is the case.

On top of the movement restrictions and the consequent fact that everyone who can is now working from home, nearly all businesses are going to be severely cash flow constrained while the world remains in limbo as we attempt to minimize the severity of this once-in-a-century pandemic. It seems very unlikely that operators will be inclined to bid with any enthusiasm whatsoever in any spectrum auctions until this runs its course.

Ofcom announces 700 MHz and 3.6-3.8 GHz auction rules

A new batch of mobile spectrum that will increase the total by 18% will be made available for auction as some unspecified date.

Specifically we’re talking 80 MHz of the precious, low-frequency 700 MHz band and 120 MHz of spectrum in the less useful 3.6-3.8 GHz band. The 700 MHz stuff is especially handy for improving coverage thanks to its long range, which the higher frequency spectrum is being used for 5G capacity as there’s plenty of it.

The mechanics are similar to the 2018 auction in so much as they involve a principal stage in which lots of spectrum are bid for, followed by an assignment stage that determines the specific frequencies. The latter stage is important for combining old and new spectrum holdings into contiguous chunks, which are more useful to operators.

“Demand for getting online, on the move is soaring, with mobile customers using nearly 40% more data year on year,” said Philip Marnick, Spectrum Group Director at Ofcom. “So releasing these airwaves will bring a much-needed capacity boost – helping mobile customers get a better service. We’re also releasing more airwaves to help cement the UK’s place as a world leader in 5G.”

Here are the details, as explained by Ofcom:

  1. The spectrum would be made available for bids in the following lots:
    – Six lots of 2×5 MHz (60 MHz in total) in the 700 MHz band with a reserve price of £100m per lot.
    – Four lots of 5 MHz (20 MHz in total) of 700 MHz downlink-only spectrum, with a reserve price of £1m per lot.
    – 24 lots of 5 MHz (120 MHz in total) of 3.6-3.8 GHz spectrum, with a reserve price of £20m per lot.
    – As we are not planning to include coverage obligations anymore, the two spectrum lots that carried a proposed maximum discount each of between £300-400m will no longer apply.
    2. We are using an auction format known as ‘simultaneous multiple round ascending’ (SMRA).
    3. The 37% cap on overall spectrum holdings has the effect of restricting existing mobile companies to acquiring the following amounts:
    – BT/EE – 120 MHz BT/EE;
    – H3G – 185 MHz;
    – Vodafone – 190 MHz;
    – Due to its current spectrum holdings, O2 will not be restricted by the cap.
    4. The 700 MHz band has previously been used for digital terrestrial TV and wireless microphones. The 3.6-3.8 GHz band is used for fixed links and satellite services.
    5. In December 2018 we proposed including coverage obligations in our auction rules. These would have required up to two mobile companies to increase coverage in rural areas, in exchange for winning discounted spectrum through the auction. The mobile network operators developed the Shared Rural Network plan in response to Ofcom’s proposals, and it is therefore no longer appropriate to include coverage obligations in the auction.

Verizon the biggest winner of the latest US millimeter-wave auction

An investment of $1.6 billion got Verizon almost five million licenses in the US auction of the Upper 37 GHz, 39 GHz, and 47 GHz bands that will be used for 5G.

You can see who got the most below. Apparently T-Mobile had been expected, at least by some analysts, to be the big winner, but it ended up a distant third. It’s also worth noting by how much Verizon won the auction, dropping almost half a billion bucks more than second placed AT&T. We’d be lying if we said we knew why there was so much variation in the price per license, but Columbia Capital must have really fancied those 52 it won.

Winner Payment Licenses
Verizon $1,624,101,808 4,940
AT&T $1,185,734,976 3,267
T-Mobile $872,791,192 2,384
Columbia Capital $306,711,619 52
Dish $202,532,574 2,651
U.S. Cellular $146,342,281 237
Sprint $113,948,318 127

“The successful conclusion of Auction 103—the largest amount of spectrum offered in an auction in U.S. history—is one more significant step the FCC has taken toward maintaining American leadership in 5G,” said FCC Chairman Ajit Pai. “A critical part of our 5G FAST plan is pushing more spectrum into the commercial marketplace. Last year, the FCC auctioned the 28 GHz and 24 GHz bands.

“All told, those two auctions and this one have made available almost five gigahertz of high-band spectrum for commercial use. To put that in perspective, that is more spectrum than is currently used for terrestrial mobile broadband by all wireless service providers in the United States combined. Auction 103 was a tremendous success, and we look forward to building on this positive result with the 3.5 GHz auction, which is scheduled to begin on June 25, and the C-band auction, which is scheduled to begin on December 8.”

Have you noticed how much Americans like the word ‘tremendous’ these days? One definition of it is ‘being such as may excite trembling or arouse dread, awe, or terror’. Fair enough. The mid bands on offer later this year are also for 5G. Those frequencies have better propagation characteristics than millimeter wave but there will be less of them, as is so often the way with radio spectra.