Cable’s Latest, Greatest Wireless Opportunity
The nation’s mobile network operators have built an industry on the back of so-called “beachfront” spectrum that provides an unmatched combination of penetration and coverage.
With those premium, licensed bands all but bottled up for the foreseeable future, a fresh swatch of spectrum labeled Citizens Broadband Radio Service (CBRS) — and recently given the more consumer-friendly brand of “OnGo” by the CBRS Alliance — is opening the door to coveted capacity that is well-suited for dense, small, fiber-connected cells that can work with today’s 4G/Long Term Evolution networks and play a role in the 5G networks of tomorrow.
If all goes as planned, commercial deployments for new, unlicensed usage in the CBRS band will start this year, with auctions for CBRS licenses getting underway by mid-2019. This particular 150-Megahertz swath of spectrum, in the range of 3.55 Gigahertz to 3.7 GHz, has been an underused resource, via its limited use by the U.S. Navy for aircraft carrier flight operations and for some satellite uplinks.
In 2015, the FCC created the CBRS band in a framework that would allow both unlicensed and licensed users to share the slice of spectrum alongside its incumbent users. By opening this spectrum up, the agency hopes to feed an anticipated hunger for more wireless capacity for next-generation wireless and mobile services.
CBRS is being touted as an appealing new tract of wireless real estate because it offers high quality spectrum but doesn’t come at a beachfront price. Plus, the band’s unique shared characteristics have positioned cable operators to share in the spoils.
Cable’s Key Use Case: Mobile Offload
CBRS spectrum has become particularly attractive to MSOs because it has the potential to help them offload gobs of mobile and wireless traffic onto their own networks that, in turn, could reduce their MVNO (mobile virtual network operator) costs by billions of dollars. Among secondary use cases, MSOs are also looking at CBRS for managed services and private LTE networks.
“CBRS offers a nice piece of spectrum at a very attractive price for cable to start their move into wireless … with a small incremental investment,” BTIG analyst Walt Piecyk said, adding that it enables a further commoditization of radio costs while fitting hand in glove with cable’s deployment of fiber-rich networks.
Several U.S. cable operators are already chasing the opportunity.
The expectation is that cable operators will deploy CBRS somewhat surgically, concentrating on areas expected to generate the most traffic and, therefore, provide the greatest offload savings.
Linkages to LTE
CBRS is also inviting from a mobility standpoint because it will be compatible with today’s widely deployed LTE/4G technology.
“It works just like you’d expect LTE to work,” Steve Martin, chief technology officer of Ruckus Networks, the Arris-owned wireless/mobile company, said.
CBRS spectrum will have the same performance characteristics of LTE, Martin said, but with an added spectrum management component. That’s important for cable operators that want a seamless handoff as devices roam from the networks of their MVNO partners to their own CBRS-based networks.
Cable operators have explored the idea of hybrid cellular-WiFi combinations that use software designed to optimize the handoff between those networks, but the results have been mixed.
“Some software exists … but it’s not sophisticated enough,” making it prone to dropped calls and spotty cohesiveness, said Iyad Tarazi, CEO of Federated Wireless, a maker of spectrum allocation servers and monitoring systems that will play an important role in CBRS network deployments. “It’s not practical.”
That’s not the only fit. CBRS networks also will lean heavily on a small cell infrastructure backed by fiber that meshes with the way cable has been deploying its wireline networks. That fiber element represents a critical and costly part of that future network — and the cable industry has it in spades.
“The cable provider’s biggest asset in CBRS, and with 5G, is their fiber footprint,” Alex Besen, founder and CEO of The Besen Group, said. “This is their major advantage.”
Said Piecyk: “CBRS spectrum can offer an early, inexpensive way for cable operators to take advantage of the fiber investment that they are already making to densify on the cable [network] side. The world kind of came to them.”
Some of this is evident in deal between Cox Communications and Sprint announced in January. In addition to settling a patent suit, the agreement also enables Sprint to use Cox’s infrastructure to accelerate the densification of its wireless network and beef up its backhaul and small cell deployments.
The CBRS train continues to move forward in the form of trials, but it still faces a mix of regulatory, technology and operational hurdles before it reaches the commercial deployment stage. Because there is a licensing component, the future of CBRS will partly be determined by multiple regulatory agencies.
And that regulatory component is traveling along two different, parallel paths. On one hand, the Federal Communications Commission still needs to finalize the rules around the PAL licenses; on the other, the FCC, the U.S. Department of Defense and the National Telecommunications and Information Administration (NTIA) must find consensus on the certification process for the all-important spectrum allocation servers and radios.
The FCC is working on rules to govern the licensing aspect of CBRS, but it’s been an uphill climb with respect to the size of the license areas and how long those licenses would last.
The debate over the size of licensing areas has been particularly heated. Existing mobile service providers want those areas to be large, consistent with how they’ve licensed spectrum in the past; cable operators are advocating for smaller, county-level areas that match up better with their service footprints. Others, looking to serve venues like train depots and airports with private LTE networks, are seeking even smaller licensing areas. And some wireless ISPs are eyeing small, census-level tracts.
The FCC is trying to find a compromise, and expectations are that the agency will announce the rules by the end of this summer.
“The big issue, especially for cable operators, is the licensing piece,” Besen said. “They [the cable operators] want a priority license, because they want to have that network and the rights to manage it and execute on it.”
The good news is that work on CBRS, including trials and initial deployments, can move forward using the unlicensed portion of the band even as the FCC irons things out.
But there’s less certainty and industry control with respect to the certification process. That’s a major wrinkle, as spectrum allocation servers and the CBRS Spectrum Access Systems (SASs) will need to be in sync to ensure that new users in the band don’t interfere with the incumbents.
In 2016, the FCC granted conditional approval to several SAS administrators for the 3.5 GHz band, including Amdocs, the CTIA, Comsearch (part of CommScope), Federated Wireless, Google, Key Bridge and Sony.
That SAS certification process was expected to be a bit further along, but estimates are that it should be done by Q3 or Q4 of this year, removing an important linchpin on the market. “At end of the day, no one can launch commercial services until these certification processes are worked out,” Martin said.
Another cautionary issue is the availability of new smartphones and other clients that support CBRS. Though the infrastructure for CBRS networks can be deployed ahead of those devices, “the market doesn’t take off, or is really useful, until there are end devices,” Martin said. “But there is so much momentum gathering that we’re confident that the client piece will come along.”
Verizon is expected to have CBRS-capable devices, including smartphones, by the end of 2018.
But Piecyk sees that picture improving. “By 2019, I expect that you will see the CBRS spectrum in a flagship [smartphone] product,” he said, adding that there’s a “decent chance” that Apple will support the spectrum in the iPhone next year.
Despite this blend of technology, operations and regulatory hurdles, CBRS-focused suppliers said the market is highly active.
“The ecosystem is coming together,” Imran Akbar, vice president and general manager, wireless enterprise at Samsung Electronics America, said. “We are heavily betting that this market will take off in a very aggressive way.”
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