Absence of Mid-Band Spectrum Clouds Trump's 5G Proclamations

Mike Dano
4/12/2019

President Trump held a 5G-themed press conference at the White House to tout a new $20 billion proposal for rural broadband buildout and an additional millimeter-wave spectrum auction. But some in the industry argued that neither initiative will do much for 5G.

"If the government is serious about 5G they ought to be focusing on getting CBRS and the C-Band spectrum into the market as quickly as possible," wrote Jonathan Chaplin of Wall Street firm New Street Research in a note to investors. "The 'Real 5G' is going to flourish in what we now call mid-band spectrum, between 2.5GHz and 4.2GHz."

"So far this Administration’s interventions on 5G have done more harm than good. From imposing tariffs on 5G equipment to alienating allies on 5G security to falling behind the rest of the world on critical mid-band spectrum, it has yet to offer a workable plan for US leadership," tweeted FCC Commissioner Jessica Rosenworcel

Nonetheless, Trump and FCC Chairman Ajit Pai used the White House event to trumpet the administration's actions on 5G, including the FCC's moves to auction millimeter-wave spectrum and to loosen regulations around small cell and fiber installations.

"The race to 5G is a race we must win," Trump said, adding that he doesn't want the government involved in building a 5G network. (That aside was noteworthy considering the notion of a nationalized 5G network has circled the Trump administration since Trump took office.)

"Today, 5G is a success story -- an American success story," FCC Chairman Ajit Pai added in remarks at the event.

But neither Pai nor Trump made any mention of the kinds of mid-band spectrum that many in the industry argue would dramatically aid the buildout of 5G both in urban and rural areas.

Mid-band warnings
"The biggest deficiency [in 5G] is mid-band spectrum," CTIA CEO Meredith Attwell Baker said during the trade association's recent 5G meeting. Baker said global rivals of the US have four times the amount of mid-band spectrum that US wireless providers do, which will help them deploy 5G faster. She called mid-band the "Goldilocks" of spectrum bands because it toes the line between providing adequate coverage due to its propagation characteristics while also being capable of transmitting large amounts of data.

Baker isn't alone. In its recent report on 5G, the Pentagon's Defense Innovation Board said the US needs to refocus its 5G efforts on releasing more mid-band spectrum -- spectrum below 6GHz. "The DoD and the FCC must flip their prioritization from mmWave to sub-6GHz spectrum for 5G," the DIB wrote in its report. "DoD and FCC have been prioritizing the 28 and 37GHz bandwidths as options for 5G development, but this effort is misplaced."

That recommendation from the Defense Innovation Board (DIB) is important considering the DIB was created in 2016 as an independent entity advising the US Secretary of Defense on issues including technology and operations. And the membership of the Defense Innovation Board reads like a who's who of tech luminaries and includes the likes of Google's Milo Medin, Facebook's Marne Levine, author Walter Isaacson (who wrote the "Steve Jobs" biography) and Neil deGrasse Tyson. Yes, that Neil deGrasse Tyson.

The reason the 5G discussion has started to focus on mid-band spectrum is two-fold: First, a number of other countries are focusing their initial 5G efforts on mid-band spectrum, which means that equipment suppliers like Ericsson and smartphone vendors like Samsung will be building mid-band gear. Second, mid-band spectrum can potentially transmit large amounts of data over large distances -- in rural areas, where houses are spread out, such characteristics are critical.

For example, cable company Midco has embarked on a major fixed wireless network buildout in order to reach customers beyond its wired cable footprint -- including customers in rural areas. And the company is strongly urging the FCC to release additional mid-band spectrum: "Mid-band spectrum... holds great promise in assisting Midco and other fixed wireless providers in closing the Digital Divide," the company wrote in a recent FCC filing.

It's clear that the millimeter-wave spectrum (spectrum generally above 20GHz) that the FCC is preparing to release at auction is not going to help much in rural areas. Just look at the early results of PCMag's tests of the millimeter-wave 5G from AT&T and Verizon: Signals at 28GHz and 39GHz travel only a few hundred feet, and can be interrupted by trees, buildings or glass. There's no way millimeter-wave spectrum will be able to help bridge the digital divide with those kinds of performance characteristics.


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The absence of mid-band spectrum from Trump's 5G event is curious considering the FCC is currently considering several mid-band spectrum proceedings. The agency has said it will conduct 3.5GHz CBRS auctions in 2020. And it's looking at releasing spectrum in the 2.5GHz band and the 3.7-4.2GHz C-Band.

But none of those bands were discussed at today's White House event.

Instead, Pai offered some details on his new $20 billion rural broadband proposal. And he offered a start date for the FCC's previously announced plans to auction off millimeter-wave spectrum in the 37GHz, 39GHz, and 47GHz bands.

Rural broadband
On rural broadband, Pai said he will create a new Rural Digital Opportunity Fund, which he said will use money from the US government's Universal Service Fund (USF) to release $20.4 billion over the next 10 years for rural broadband buildouts. He said the effort will bring broadband services to up to 4 million homes. Pai said he basically wants to give that $20 billion to private companies through a reverse auction system, where companies submit bids to build broadband networks in rural areas and the company with the lowest bid wins the money. Pai said the RDOF would be technology-neutral, which means that companies that bid for the money can use any technology they want to build out networks in rural areas, be it cable, wireless or satellite.

In that respect, Pai's RDOF will essentially act like a really big Connect America Fund Phase II (CAF II) auction. The CAF II auction that the FCC conducted last year doled out a total of $1.5 billion to fund network buildouts across the country. The top winners in the CAF II auction last year mainly plan to use fixed wireless technologies to build out connections in rural America, though some winners said they will use fiber or satellite networks.

Pai explained that his RDOF proposal would cover both unserved areas and underserved areas of the US, and would require companies that win money in the auctions to provide 25 Mbit/s download speeds and 3 Mbit/s upload speeds.

Importantly, Pai didn't address an ongoing debate around which rural areas in American actually need broadband services. Companies including Microsoft have blasted the FCC's broadband maps as highly inaccurate -- a situation that creates serious problems for a program aimed at bridging the "digital divide" considering there's no consensus about where that bridge needs to be built. In recent weeks, USTelecom along with other trade groups and companies announced a new "Broadband Mapping Initiative" to address the problem, but that effort has already attracted a range of opponents.

Auction 103
As for the FCC's upcoming millimeter-wave spectrum auctions, the agency said the event would be the "the largest spectrum auction in American history" and would start December 10. The FCC will release a total of 3,400MHz of spectrum across the upper 37GHz, 39GHz, and 47GHz bands in one single auction. While that is an enormous amount of spectrum compared with previous auctions, it's also high-band spectrum and therefore much different in terms of propagation when compared with low-band spectrum like 600MHz. Therefore, there's no reason to expect the upcoming auction to raise as much money as the 700MHz spectrum auction in 2008 did ($20 billion in total winning bids) or the AWS spectrum auction in 2015 ($41 billion).

Indeed, the FCC has already completed its first auction of high-band spectrum, the 28GHz auction, and that event raised just $704 million in winning bids. But that was probably because the auction covered mostly rural areas of the US. The agency's ongoing 24GHz spectrum auction -- which offers licenses in virtually every major metro area -- is closing in on the $2 billion mark in winning bids.

Interestingly, the upcoming upper 37GHz, 39GHz, and 47GHz auction -- dubbed Auction 103 -- is not without some drama. Just hours before the FCC's meeting today where it was scheduled to vote on rules for the action, the NTIA raised a red flag over how the agency might handle spectrum licenses in the upper 37GHz band. Specifically, the NTIA warned that the Department of Defense "will need to use the upper 37GHz band at additional sites, but these other locations cannot be specifically identified at this time." Meaning, the US military needs some of the 37GHz band, but it doesn't know exactly where or when.

Not surprisingly, this request isn't sitting well with the wireless companies that want to buy upper 37GHz spectrum licenses and use them to offer commercial service. "A winning bidder could therefore, for instance, spend billions of dollars for upper 37GHz spectrum in New York only to have DoD later declare that it needs spectrum in that area," T-Mobile wrote to the FCC. "And DoD could claim however much spectrum it needed, regardless of the investment made by, or expectation of, the winning bidder. With no guardrails in place, potential licensees may be reluctant to bid on upper 37GHz band spectrum "

Some FCC commissioners said that the 37GHz situation isn't anything to worry about. "With respect to the 37GHz band, which saw some back and forth in the run up to today’s vote over coordination zones, the order now provides additional clarity about the rights that federal and private sector users will have," said FCC Commissioner Brendan Carr during the agency's meeting today.

But Commissioner Rosenworcel said that "all of this uncertainty and regulatory back-and forth could easily depress participation and bidding at auction. … It is no way to do spectrum policy. I believe that bidders should know with certainty that they will be able to use the spectrum they are purchasing at auction."

In its open meeting today, the FCC voted among other things to seek comment on the bidding procedures for Auction 103.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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