Utility company Xcel has canceled its plans to build a private WiMAX wireless network for advanced smart grid operations. Instead, the company is now using public LTE services from the likes of AT&T and Verizon for its communication needs, and it is considering potentially building its own private LTE network.
Xcel's recent adventures in the communications sector highlight the widening technological demands of one massive segment of the US economy – the utility industry – as well as the rapidly evolving nature of wireless technology.
And, more broadly, the efforts by Xcel yet again highlight the potential for private wireless networks among utility companies as well as other enterprise sectors. Some vendors, including Nokia specifically, have hinted that the overall opportunity for such private wireless networks might be twice as big as the market for regular, commercial wireless networks.
The fading age of WiMAX
"Based on consultations with industry experts and critical vendors concerning the investment in and manufacturing of WiMAX equipment and infrastructure, WiMAX is the most viable solution for current needs and those of the foreseeable future," Xcel's Wendall Reimer said in August 2016, almost exactly four years ago.
Xcel Energy counts 3.6 million electricity customers and 2 million natural gas customers across eight Western and Midwestern states. In 2016, Xcel announced its $500 million Advanced Grid Intelligence and Security (AGIS) initiative that seeks to implement "smart grid" services across Colorado and elsewhere.
As Reimer explained, the company's AGIS program would use new communications connections to automate sensing, controls, information, computing, communications, materials and components to "better meet customers' energy needs, while also integrating new sources of energy and delivering power over a network that is increasingly interoperable, efficient and resilient."
He explained the company's 2016 wireless network plan would include two components: a Wireless Smart Utility Network (WiSUN) mesh network that would create connections among advanced meters, and a Worldwide Interoperability for Microwave Access (WiMAX) that would transmit the information collected by the WiSUN network back to Xcel's headquarters.
According to Xcel spokesperson Michelle Aguayo, the company has installed WiSUN in locations across Minnesota and Colorado, and it expects to finish the buildout of that network in 2023.
The WiMAX network, however, is another issue.
"While we believe WiMAX is a viable technology, changes in FCC rules and regulations meant we needed to transition away from WiMAX to a public LTE," Aguayo wrote in response to questions from Light Reading.
Aguayo said that Xcel used multiple, unnamed vendors to deploy around 50 WiMAX sites, but it decided to shutter the effort in 2019. She declined to provide the financial details around the effort.
In place of WiMAX, Aguayo said Xcel selected "the public LTE as a cost effective and acceptable alternative while we research for a long-term solution," noting the company currently uses more than one provider, including both Verizon and AT&T. "At this time, we are looking into both public and private LTE solutions and will consider a number of factors, such as cost, security and resiliency, before making a final decision."
Xcel of course isn't the only company moving away from WiMAX, though it may be one of the last. While the technology was once heralded as a more capable alternative to 4G LTE – and was embraced by companies like Intel and Sprint – WiMAX has fallen by the wayside as most of the global wireless industry coalesced around LTE.
Indeed, Sprint signaled its intention to shutter its WiMAX network in 2014 – two years before Xcel selected the technology over LTE – and Sprint pulled the plug on the network in the early part of 2016.
Xcel's Reimer in 2016 explained that the company would use WiMAX instead of LTE because it was cheaper; because WiMAX wouldn't route traffic through an Evolved Packet Core (thus providing lower latency); and because WiMAX could deployed across the full 3.65GHz and 5.8GHz spectrum bands.
Public and private options
Having shuttered its WiMAX ambitions, Xcel still has choices. Verizon, AT&T and others continue to tout their ability to support Internet of Things (IoT) services like smart grid applications on their LTE, LTE M and NB-IoT offerings. And a wide range of startups have promised to sell their own IoT networking services to utilities and others, with varying degrees of success.
More recently, utility companies are looking to leverage the vast global 4G and 5G ecosystem – supported by the likes of Nokia, Ericsson, Qualcomm and others – in order to hold their communications future in their own hands.
"Utilities will also wish to participate in the 5G world by acquiring spectrum in order to have the option to construct their own private 5G networks and integrate them into a 5G world," wrote the Utilities Technology Council (UTC) trade association in a white paper last year. The UTC has been urging the FCC to free up spectrum specifically for utility companies.
Further, utilities are increasingly competing with major wireless network operators in order to purchase their own spectrum for their own private wireless networks. For example, at least 18 energy and utility companies have registered to bid in the FCC's ongoing 3.5GHz CBRS spectrum auction.
The FCC will release the identities of the winning bidders when the auction is over.
Separately, a number of spectrum owners are looking to sell or lease their holdings to utility companies. For example, startup Anterix is positioning itself to become a private LTE enabler for utility companies. The company holds about 60% of the 900MHz spectrum licenses in the top 20 markets in the US, and it is already working with Southern Company, the New York Power Authority, Exalon, Hawaiian Electric, Ameren and Duke, among others.
Separately, Ligado too has said it hopes to sell its spectrum holdings to private network operators.