This month’s wires were dominated by discussions around the adoption and implementation of 5G. Meeting the new wireless standards will support various deliverables for different providers – from the roll out of mobile broadband to the wide-scale facilitation of IoT. There are still many challenges to overcome: deploying standalone 5G networks that are fully independent from 4G architecture, leveraging new higher frequency bands and unlicensed spectrum, and integrating new technologies, such as small cells. One of the key challenges will be determining the transport medium that will allow 5G standards to be met. Some believe that 5G wireless networks will have to rely heavily on fiber backhaul, while others are exploring how millimeter wave (mmWave) could be used in lieu of expensive deployments. There have also been discussions exploring how shared small cells infrastructure used on the 3.5 GHz spectrum could support multiple providers’ 5G ambitions from a single cell simultaneously. Transport mechanisms are not the only technologies in play. Organizations are also experimenting with virtual tools, particularly AI and advanced analytics to expedite 5G adoption. While the industry strives to bring 5G to fruition, advanced LTE networks are expected to offer increasingly ultra-fast speeds on top of which applications could be built and easily transitioned to 5G upon its availability. (Read More)
Now that the FCC’s 600MHZ auction is finally over, it’s becoming clear who the winners are. Surprising many in the industry, AT&T and Verizon’s bidding activity was relatively lackluster, whereas T-Mobile spent $8B on 45% of the total low-band spectrum sold. Dish Network was another triumphant underdog, having purchased significantly more spectrum than towering rival, Comcast. To finalize the process, the FCC appointed 10 staffers to serve as regional coordinators to facilitate the subsequent repack phase which will take place through July 2020. The end of the auction means the FCC’s quiet period has been lifted – we can expect much more speculation around M&A activity in the wireless space now that participants can talk to each other again. (Read More)
At this point it’s clear that IoT’s momentum is unstoppable. Naturally, the market is abuzz with speculation on how this phenomenon will play out. Even though there’s an overwhelming air of excitement surrounding IoT, there are an abundance of very reasonable concerns that include sensor inaccuracy defiling data analysis, users failing to apply security patches and leaving themselves open to attacks, and rapid obsolescence of deployed equipment. Some call for IoT to be regulated by a governing body, not only to protect a more vulnerable edge, but also to foster mindshare between providers to propel its progress. It’s imperative that all standing issues get sorted out, especially in the face of predictions that the processors needed to make a device “smart” will cost as little as ten cents, inciting an explosion of connected products. In fact, the threat to IoT devices has already arrived: AT&T tracked a 400 percent increase in scans of IoT devices during the first half of 2016, showing that hackers are assessing the usefulness of IoT products for their nefarious agendas. (Read More)
It’s finally coming to an end. On March 6th, the FCC is launching the final stage of its 600MHz auction process – the assignment phase, where winning bidders of the forward auction will bid on specific frequencies. This final tranche is scheduled to definitively end on March 30th. A modest $19.63B of proceeds were generated after multiple auction round phases. What Tom Wheeler, the former FCC Chairman, promised would be a “spectrum extravaganza” ended up being more of a subdued spectrum luncheon. Gordon Smith, head of the National Association of Broadcasters (NAB) brought attention to the fact that the previous auction, which ended January 2015, raised $40B for just half the spectrum moved in the current auction and derided cries of a spectrum crunch that needed addressing. Explaining the underwhelming results (in the face of initial predictions that ran as high as $80B) is simple: broadcasters showed up and the wireless carriers did not. The former still came away with a nice payday however – Fox Television Stations, for instance, expects to receive $350m for the spectrum it off loaded. It’s far below estimates, but still nothing to scoff at. (Read More)
President Trump appointed senior Republican commissioner, Ajit Pai, to serve as the next chairman of the Federal Communications Commission (FCC). Since he is already on the commission, he does not require Senate approval until the end of his current five-year term later this year when he’ll require reconfirmation. While it’s challenging to predict exactly what policies our new FCC Chairman will put into place, it’s worth noting Pai’s criticism of net neutrality. Pai has already hit the ground running by introducing a proposal to waive some of the net neutrality transparency requirements. With an anticipated swing away from net neutrality policies, the industry expectedly debated the pros and cons of such regulation during the lead up to the inauguration. Small wireless providers made their stance known, joining together through the Wireless Internet Service Providers Association (WISPA), reaching out to President Trump, and asking for a rollback of net neutrality regulation and piracy rules, which they believe pose a disadvantage to small- and medium-sized business. (Read More)
As 2016 came to an end, the telecom industry was ripe with speculation, forecasting how the sector could evolve over the twelve months ahead. The year ended with plenty of movement surrounding the FCC’s 600MHZ auction. The third stage concluded shortly after it began and widely missed the clearing cost target. Quickly following was the kick off of the fourth round, which analysts believe has a higher probability of success due to the relatively small amount of impaired spectrum. Just two days after the fourth round began, though, FCC Chairman Tom Wheeler decided he would resign, which leaves Donald Trump two FCC seats to fill; the President-elect is expected to give Republicans a 2-to-1 majority on the commission. The incumbent Republican members have made it clear their agenda will focus on removing net neutrality rules as quickly as possible and the coming appointments will go a long way in realizing these goals. Some hope that the new presidential administration focuses on facilitating 5G deployments by enacting polices that spur innovation; however, experts still believe we won’t see 5G in the United States until 2020 or 2021. (Read More)
The morning following an election, every industry reflects on the results and questions how the President-elect will affect business over the next four to eight years. Invariably, the person that holds the highest office in American government will influence nearly every segment of the economy. Telecommunications, as a heavily regulated industry, is highly sensitive to the presidential “pick.” Of utmost consequence is the President’s appointment of the FCC chairperson. There’s speculation that President-elect Donald Trump will appoint pro-business economist Jeffrey Eisenach as head of the FCC, who would be expected to roll back net neutrality and ease up on regulation, especially in comparison to Obama-appointed Tom Wheeler.
As October creeped its way toward Halloween, the telecommunications sector saw a slew of critical activity. First off, the FCC set a 108 MHZ clearing target for the third stage of the reverse 600MHz auction, slated to begin on November 1st. The target has come down significantly since the first phase, where it stood at 126MHz. The second phase of the forward auction lasted only one round, receiving just $21.6B in bids before it was stopped by the auction mechanisms (broadcasters were asking for $56.5B). As auction activity remained steady, so too did NAB’s insistence that the FCC’s 39-month timeline for repacking the spectrum of broadcast TV stations after the incentive auction ends is “arbitrary and inflexible.” NAB added that the schedule doesn’t give broadcasters enough time to move to other channels.
On September 13th, the FCC launched the second phase of the reverse auction of the 600MHz spectrum. This follows the first phase forward auction, where wireless carriers bid $23.11B after 27 rounds. The second phase aims to clear a reduced 114MHz in up to 52 rounds of bidding. The FCC is also testing equipment in the 5.9GHz band for smart car technologies, moving quickly from a public sector perspective, but not rapidly enough in the eyes of companies looking to carve out an early stake in this promising, emerging sector. In a statement to the U.S. Senate, FCC Chairman Tom Wheeler announced that the Commission passed the Spectrum Frontiers Report and Order, which makes the U.S. the first country to offer high-band spectrum for 5G networks and applications, which Wheeler says will rival fiber in its capabilities. FCC also promised to release its Incentive Auction Task Force’s plan for a smooth and successful repack. Those invested in the repack are anxiously waiting on the FCC’s model for station relocation efforts and, as Vertix readers know from our recent blog, this will not be an easy task.
After months of stealing the telecom news cycle, the first stage of the FCC’s 600MHz auction came to an end as forward-bidding activity dropped below the level needed to continue. Broadcasters were expecting about $84B for their waves in the initial clearing target of 126MHz, but bidders (carriers and others) did not even come close to this expectation (hitting only $23B in the forward auction). The second stage of the incentive auction began September 13 with a lower clearing target.