Summary Bullets:
• On July 23rd, the auction for Priority Access Licenses (PALs) for CBRS began; each PAL consists of a 10 megahertz channel in the highly coveted 3.55-3.65 GHz band. 22,631 licenses will be offered, with seven licenses available for each U.S. county (or census tract). So far the auction has resulted in 271 qualified bidders.
• The applicants are an astounding array of companies from mobile network operators and cable companies, to wireless Internet service providers, electric utilities, universities, and large enterprises. They are excited about using CBRS spectrum to supplement existing networks for public or private use, or to roll out their own networks without having to engage with a service provider. In either case, the auction may have a significant effect on public and private wireless networks and on the race to offer 5G.
CBRS spectrum has been talked about for years as an exciting opportunity for service providers that don’t own their own wireless spectrum to get some – and to get highly desirable spectrum in the mid-band where operators see faster speeds or better coverage than for low-band or high-band (mmWave) spectrum, respectively, for LTE or eventually 5G. In January 2020, licenses were granted to companies that want to be part of the CBRS ecosystem by becoming providers of Spectrum Access Systems (SAS) that are essentially frequency coordinators that allocate access to companies that want to be part of a complex spectrum sharing scheme. SAS licenses were granted to Amdocs, CommScope, Federated Wireless, Google, and Sony, companies that hope to gain revenues from CBRS for a variety of reasons in a variety of ways (including mobile device and CBRS equipment sales, professional services, and revenues from coordinating secondary market access from PAL licensees that want to resell their spectrum to other companies). GAA users are companies that use spectrum allocated by the SAS providers and are in the lowest tier of a set of three tiers (including GAA at the bottom, PAL in the middle, and, on top, the incumbent Department of Defense and Navy organizations that get highest priority use of the spectrum). GAA users can access any portion of the 3.5 GHz band not assigned to higher tier users.
If this seems confusing it isn’t really – “everyone” in the telecom services world and some that want wireless services without having to deal with operators wants a chunk of this spectrum. However, to make things more interesting, another auction for what is called C-band spectrum will take place in December 2020. The FCC plans to auction 280 megahertz of satellite providers’ C-band spectrum in the mid-band at 3.7-4.2 GHz to companies providing 5G cellular networks. To reimburse the satellite operators, the FCC will allow them to collect up to $9.7 billion in incentive payments, in addition to $3 to $5 billion to pay for new satellites. The C-band auction is expected to be even more popular than the CBRS auctions because, as the CFO for Verizon said recently, CBRS is geared more for a 4G capacity upgrade while C-band could increase “the size of the 5G opportunity”.
As a follower of the private wireless network market I see the potential for massive competition – even beyond what we see today, with mobile operators seeking both connectivity and professional services revenue, and infrastructure providers such as Nokia and Ericsson already actively seeking incremental revenues from 4G/5G network design, build-out, and management services. This begs the question – Is there room for everyone to make money? We also already see private companies such as automotive manufacturers using their own spectrum (especially in Europe) to roll out their own wireless networks to supplement or replace WiFi and in-building wired access. Lots of fun ahead!
