Except for Cox Communications, all other major US cable operators plan to sit on the sidelines for the FCC's coming auction of 24 GHz and 28 GHz spectrum, a clear indication that many cable operators question the value and versatility of those millimeter wave bands for 5G services.
"Cable operators likely understand the limitations of milli-meter wave spectrum and the global attraction of using mid-band spectrum for 5G coverage," BTIG Research analyst Walter Piecyk said in emailed comments to Light Reading.
At this stage, there appears to be much more interest from cable operators in the 3.5 CBRS band, eyeing it as spectrum for a range of use cases ranging from MVNO offload and private LTE networks, with an eye toward 5G. The cable industry has also been urging the FCC to open up more spectrum for unlicensed WiFi use. (See Proposed CBRS Rules Suit Cable's Cause and Cable Makes Play for 5.9GHz Band.)
Cox Communications Inc. confirmed that it filed and completed the required application for the FCC's 24 GHz auction. But the MSO couldn't comment further, citing the Federal Communications Commission (FCC) 's auction rules.
The 28GHz auction (aka Auction 101) is set to start November 14; the 24 GHz auction (Auction 102) will be scheduled to start after the conclusion of bidding in Auction 101, according to the FCC.
Though Cox can't discuss what it would have in mind for that spectrum, speedy fixed wireless broadband service is among the most likely use-cases, even though millimeter wave spectrum requires line of sight and is particularly susceptible to blockage from buildings, foliage and trees.
"It's also telling that cable operators that have fiber and backhaul cable infrastructure close to the end user have talked about being mobile 5G providers, and yet don't even plan to show up for this auction," Piecyk added in a blog (registration required) reacting to the auction applications.
Piecyk also stressed that it's too early to handicap how active the bidders plan to be in the auction, as upfront payments haven't been revealed.
"Wireless operators around the world have largely turned their eyes to mid-band spectrum for the 5G coverage layer despite early efforts by some industry participants (most notably Verizon) to represent mmWave spectrum as a primary delivery mechanism of 5G," he wrote. "Disinterest in a mmWave spectrum auction, like the disinterest in low-band spectrum auctions, could simply be another indicator of the value of mid-band spectrum to source operators LTE capacity and 5G needs. Dish, CBRS and C-Band spectrum loom larger on the 5G landscape."
He called Verizon Communications Inc. (NYSE: VZ) the least surprising of the bidders in the mmWave auction, recalling that it shelled out $3.1 billion for Straight Path earlier this year, and $2 billion for XO last year as it eyes the spectrum as a "coverage layer" for mobile 5G. (See Verizon Buys Straight Path for $3.1B, Beating AT&T to 5G Spectrum.)
He added that Verizon's new 5G Home fixed wireless broadband service could provide a "halo effect" on its mobile wireless business, but doesn't expect Verizon to sign up a material number of customers for 5G Home.
T-Mobile US Inc. and AT&T Inc. (NYSE: T) also filed for both auctions, but Piecyk is doubtful that they view mmWave spectrum as a coverage layer for 5G. He think the two carriers will be more interested in mid-band spectrum from the likes of Dish or what might come out of the C-Band.
Dish Network LLC (Nasdaq: DISH), notably, filed an application for both auctions, but the analyst doesn't expect Dish to be overly aggressive, given its position with more valuable mid-band spectrum.
Charlie Ergen, Dish's chairman and CEO, "can be a bargain hunter," he said, "but it’s hard to know what qualifies as a bargain when it comes to mmWave spectrum."
Meanwhile, Harold Feld, SVP at Public Knowledge , was not impressed with the applications:
mmWave Auction applications very underwhelming. Not surprised FCC tried to bury this (not on front page, no formal count of the number of applicants.) https://t.co/clGWR1Ajdw— (((haroldfeld))) (@haroldfeld) October 11, 2018
And while Charter Communications Inc. has been a big advocate of 3.5 GHz and is standing on the sidelines on these auctions, it isn't ignoring loftier parts of spectrum as it sizes up 5G plans. Of recent note, the MSO has reportedly asked the FCC for permission to conduct fixed wireless tests and explore potential mobile use-cases in the 32 GHz band. Charter's interest here follows similar experiments it has run at 28 GHz. (See Charter: To Live & 5(G) in LA and Charter's 'Inside-Out' Wireless Plan Starts to Take Shape.)
— Jeff Baumgartner, Senior Editor, Light Reading