FWA proponents 'cautiously optimistic' on BEAD

Cheer is beginning to spread among some of the executives and lobbyists in the fixed wireless access (FWA) industry who are chasing funding from the US government's $42.5 billion Broadband Equity Access and Deployment (BEAD) program.

"My sense is that whenever BEAD plans run into reality, it bends into more fixed wireless," said Steve Schwerbel, the manager of state advocacy for the Wireless Internet Service Provider Association (WISPA) trade association.

As a result, Schwerbel described himself as "cautiously optimistic." And others have a similar view.

"We are encouraged with the opportunity we've seen so far in several states within our territory, including Missouri and Illinois and Nebraska [which] have included fixed wireless access in their plans for BEAD deployment," said UScellular CEO Laurent Therivel during his company's quarterly earnings call earlier this year, according to Seeking Alpha. 

"We have a compelling product that can meet the BEAD's speed requirements and deliver a strong broadband experience," Therivel added. "...And we see a lot of advantages in working with the states on this, and we're going to continue to do so."

Indeed, UScellular has made no secret of its desire to use BEAD money to accelerate its FWA strategy.

Schwerbel said that some states – Indiana, Pennsylvania, Oregon, Louisiana and Kansas – are developing BEAD rules that appear very favorable to FWA. Other states – New York, Minnesota, California and Maryland – are not. The rest, he said, fall somewhere in between.

"I think it's evolving overall in a general direction to a good position," Schwerbel said.

Indeed, a recent report from the US Commerce Department's Office of Inspector General recommends that the Biden administration "relax" its preference for fiber and instead encourage the use of other options, including fixed wireless.

A fiber-first attitude

It wasn't always that way. Early BEAD discussions seemed particularly hostile to FWA providers, with many officials in the Biden administration arguing that fiber – and only fiber – was the technology that should be used to cross the digital divide in the US.

Fiber advocates argue the technology is speedy and reliable and will keep pace with user demands now and into the future. However, fiber competitors assert the technology is expensive and time consuming to deploy, a situation that may leave large swaths of the US unconnected for years, or forever.

Now, though, the debate seems to be changing slightly as US states craft the rules that will actually distribute BEAD money to telecom companies across the country.

Schwerbel said that many states are finding that the high cost of fiber will limit the reach of their efforts. As a result, they're turning to other, cheaper technologies like FWA in order to stretch their BEAD dollars across wider geographic areas.

For example, Louisiana's BEAD plans seem generally amenable to the idea of FWA, according to Schwerbel. That's the only state that has so far received the NTIA's approval for its BEAD plans. Other states are expected to receive similar nods.

Such approvals then pave the way for states to embark on a "challenge process" that involves selecting the specific locations that need Internet connections. After that, states will actually distribute their BEAD money. Companies such as AT&T and Charter Communications have indicated interest in chasing BEAD subsidies in order to build new networks in rural areas.

The FWA calculation

The debate over FWA in the BEAD process is noteworthy as the technology has been dominating the US broadband industry for more than a year now. 

According to the latest figures from Leichtman Research Group, fixed wireless accounted for 104% of all net broadband customer additions in 2023 in the US, compared to 90% of the net adds in 2022, and 20% of the net adds in 2021.

That growth is due in large part to the FWA offerings from T-Mobile and Verizon. The services ride atop the operators' midband 5G networks and essentially rely on network capacity that is unused by the carriers' smartphone customers.

However, T-Mobile and Verizon have been clear that their 5G network capacity isn't limitless. As a result, officials from both companies have acknowledged that they will have to invest in more spectrum or infrastructure to continue growing their respective FWA customer bases beyond 2025.

Importantly, the FWA offerings from Verizon and T-Mobile also operate in licensed spectrum. The Biden administration has worked to exclude FWA operations in unlicensed spectrum from BEAD projects. Licensed spectrum can be expensive – potentially putting it out of reach from smaller companies.

Regardless, WISPA's Schwerbel remains upbeat: "I think there was a lot of momentum toward that fiber-first attitude," he said of the early days of BEAD negotiations. But that's changing, he added.