Tag Archives: mobile broadband

Two California lawmakers want to declare cell sites not a municipal affair

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The new legislative year is bringing with it a new effort to further preempt local government authority regarding where and how cell sites can be built. Senate bill 649 was introduced last week by senator Ben Hueso (D – San Diego County), the chair of the senate energy, utilities and communications committee, and co-authored by assemblyman Bill Quirk (D – Hayward), who has been a good friend to mobile carriers in general, and AT&T in particular. Depending on what the final language looks like, it potentially will exempt tens, or perhaps hundreds, of thousands of future cell site installations from local permit reviews.

As it currently reads, SB 649 creates a new category of cell sites – small cells – and puts it in the same, statutory preemption bucket as collocation facilities, which are additional antennae and such that are tacked onto existing towers. In other words, small cells will “have a significant economic impact in California and are not a municipal affair”.

What’s a small cell? SB 649 defines it by reference to a federal standard, which says, in effect, that it’s a wireless facility with no single antenna greater than three cubic feet in volume, and total antenna volume no greater than six cubic feet. “Associated equipment”, such as transmitters and power supplies, can add up to another 35 cubic feet. If you’re trying to picture it, think of a pole with a couple of oversized carryon suitcases at the top and a coffin bolted on below.

The bill that’s in the hopper now doesn’t actually say that small cells will not be “subject to a city or county discretionary permit”, as collocation facilities are currently privileged to be. But it does set the table for adding that exemption as SB 649 moves through the legislative sausage machine – there would be little point to the bill otherwise. AT&T-backed bills, for example, are infamous for beginning life as something fairly innocuous, but eventually turning into something more pathological as amendments are made.

Verizon could close a big competitive gap with Charter’s fiber

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Verizon needs to build more than 100,000 new cell sites and add more fiber connectivity to close a capacity gap with its U.S. competitors, according to a report from New Street Research. And, the report concludes, buying Charter Communications – as rumors say it might – could help solve some of Verizon’s problems. It wouldn’t be much benefit to Charter, though.

The report estimates that when the number of cell sites and the amount of spectrum used is taken into consideration, Verizon has a bit more than half of the capacity per subscriber that AT&T and T-Mobile have. In order to catch up, Verizon would have to build 69,000 new macro – traditional, big – cell sites, or 138,000 or more small cell sites. New Street estimates that if small cells are properly located to reach high concentrations of subscribers, it would only take two to replace a big cell site. To fully cover the same geographic area, though, the ratio is more like ten to one.

Those sites would all need back haul, of course, which is where Charter comes in. Verizon still has some wireline assets of its own, but Charter’s footprint is much bigger and U.S. cable companies have more fiber – and more easily accessed fiber – than telcos. “Cable has much greater fiber density than their wireline competitors”, the report says. “To put this in perspective, the Cable industry has 320,000 nodes today, the vast majority of which are fed with fiber. By contrast, telecom carriers have 23,000 fiber fed central offices”.

So a cable acquisition would be an advantage for Verizon. From Charter’s perspective, the benefits aren’t clear. New Street discounts speculation that a cable-mobile merger would reduce churn, concluding that Verizon’s is a low as it can go and there’s no hard evidence that it would have much more than a marginal impact on Charter’s.

The report makes several other good points about the cable and mobile sectors, and telecoms in general, and is worth reading. New Street’s top line conclusion is that an acquisition is less likely than originally thought, and “our working hypothesis is that it will be very tough for Verizon to structure a deal that Charter will find compelling”.

Mobile carriers buy 70MHz UHF slice for $20 billion

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The auction is over and mobile broadband carriers gained 70 MHz of spectrum in the 600 MHz band, at a cost just under $20 billion. After four cycles of downward bidding by television companies willing to sell their channel assignments followed by upward bidding by wireless companies wanting to buy them, the Federal Communications Commission’s incentive auction ended on Friday.

The downward, selling price auction ended last month, with TV stations willing to accept $10 billion in return for giving up 84 MHz of UHF spectrum. After setting aside 14 MHz for unlicensed use and guard bands, the FCC opened the bidding for the remaining 70 MHz. The final buying price was $19.6 billion, just a bit less than wireless companies were willing to pay for the 80 MHz slice on offer in the third round.

The FCC produced a tidy profit of about $7 billion for the federal treasury, money that’s assumed to be going toward upgrading public safety communications networks. It’ll cost about $2 billion to “re-pack” remaining UHF television channels, in order to produce contiguous mobile broadband frequency assignments. The balance goes towards administrative overhead.

The final bid total was significantly less than hoped. Original estimates were that carriers would pay somewhere in the $30 billion to $40 billion range for 100 MHz. Broadcasters had their eyes on an even bigger payday, starting with a $86 million selling price in the first round, $57 billion in the second and $40 billion in the third – with the amount of spectrum cut each time – before collapsing to $10 billion on the fourth and final try. Carriers, on the other hand, were pretty consistent, bidding a total of $23 billion for 100 MHz initially and walking it back about a billion at a time until the end came on Friday.

The wrangling isn’t over – the next step is to figure out which exactly frequencies TV stations will surrender and which will go to the winning bidders, whose identities haven’t been released yet.

TV-to-mobile spectrum transfer heads to fourth auction round

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Less equals less, when it comes to spectrum auctions. That seems to be the lesson the Federal Communications Commission is learning as it ends its third stage of reverse-and-forward auctions for frequencies currently used by television broadcasters and coveted by mobile carriers.

But not coveted as much as broadcasters think, apparently. The FCC opened the bidding from mobile carriers and closed it couple hours later when it became clear that the price they are willing to pay isn’t anywhere near what broadcasters want in exchange for giving it up.

In the reverse auction phase of the third stage, broadcasters lowered their price to $40 billion (including the FCC’s cut) for 108 MHz of spectrum in the 600 MHz UHF band. The FCC then turned around and put 80 MHz on the block, reserving the remaining 28 MHz for guard bands and unlicensed use. However, the most that mobile carriers were willing to bid yesterday was $20 billion, half the asking price.

In the first stage, the reverse auction produced a selling price of $86 billion but mobile operators were only willing to pay $23 billion for the 100 MHz on offer. In the second stage, the available spectrum was cut to 90 MHz and the price dropped to $57 billion. But with less on the table, carriers offered less money, $22 billion that time. And now the third stage has produced the same result – less spectrum means both a lower asking price and a lower willingness to spend.

So now it’s on to a fourth try. The FCC anticipates “that bidding in Stage 4 of the reverse auction will begin Tuesday, December 13, 2016”. No spectrum target has been announced yet, but the assumption is that it’ll decrease by another 10 MHz to 70 MHz (plus guard and unlicensed bands). Earlier predictions that broadcasters and mobile carriers would eventually meet somewhere around $30 billion now seem too optimistic – mobile carriers appear to have a firm value in mind and it drops along with the amount of spectrum on offer.

Forward mobile spectrum auction goes into reverse

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Maybe it’s just a Rockford?

Well, that didn’t take long. Two hours after the Federal Communications Commission starting taking bids from mobile carriers (and, perhaps, would-be mobile carriers) for 90 MHz of television spectrum, it shut the auction down. Instead of stretching out for several bidding sessions over many days, or even weeks, the second stage of the incentive auction ended fast, and on a down note.

Mobile carriers were willing to pay $21.5 billion for the 90 MHz that was on offer. Unfortunately for them, though the minimum price set was $56.5 million. That’s about a billion dollars less than the carriers were willing to pay in the first stage of the auction, when 100 MHz was up for grabs. On the other hand, the gap is closing, sorta: in that first stage, broadcasters were asking $35 billion more than they did in this second one.

There are two schools of though as to what will happen when the FCC launches subsequent rounds of reverse-and-forward bidding, with progressively lower amounts of spectrum on the table. It could be that as the supply tightens, the value to buyers – the demand – will increase and mobile carriers will start putting more money on the table. There are a number of forecasters who talk about a final meeting price somewhere in the $30 billion range, for maybe two-thirds of the current amount of bandwidth that’s up for sale.

But there’s also the possibility that wireless carriers will simply say less spectrum is worth less money and keep their bids heading in a southerly direction. For the process to be a success, broadcasters would have to drop their asking prices at an even faster rate. In this case, success equals more spectrum for mobile broadband – where bandwidth demand continues to outstrip supply – and less for television broadcasting, where allocations made decades ago in ancient analog times are far too lavish in the digital age.

The FCC will announce the third stage schedule later this week.

Shifting spectrum from TV to mobile broadband still looks expensive

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Broadcasters have reduced their selling price by $32 billion in the second round of the Federal Communications Commission’s incentive auction, which ended yesterday. Even so, there’s still a big gap between that and what mobile broadband carriers were willing to pay in the first round.

The auction is aimed at moving legacy TV stations off of prime UHF real estate so mobile broadband companies can use the bandwidth instead.

The second, reverse round of the auction began last month, with 90 MHz of prime mobile broadband spectrum on the line (and another 24 MHz for unlicensed uses and guard band duty). TV station owners bid their selling price for that spectrum down from the $88 billion they wanted for 100 MHz in the first round to the current $56 billion ask for 90 MHz.

The problem is that mobile companies only bid $23 billion to buy 100 MHz the last time around. Looked at one way, broadcasters met mobile carriers more or less halfway: the $66 billion gap is now $32 billion and change. If mobile companies were holding back to a significant degree the first time, they might be willing to pay more this time. On the other hand, $23 billion might be the max given their expected return on the investment and chopping out 10% of the available spectrum could mean they’re not interested in paying as much as in the previous round.

It gets more complicated. It’s not enough to just match the selling and buying prices. Congress is expecting the FCC to raise extra money to pay for digital upgrades to public safety networks.

Although there’s always been the hope of a fast and lucrative finish to the incentive auction, the base assumption has been that several rounds will be needed. The FCC will launch the second half of the second round – the forward, buyer’s auction – next week.

Mobile carriers losing the data upgrade race to Californian demand

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You can get more bits per second from mobile broadband carriers in California, but your odds of getting those faster speeds at any given moment are dropping. That’s what the California Public Utilities Commission’s mobile field testing result are showing. You can read the excellent blog post by commission staffer Rob Osborne here. He shows that mobile broadband speeds are increasing, but sums it up diplomatically: “it’s hard to say, but it appears the likelihood of getting the average speed at a particular location is lower than before”.

The CPUC has been running a regular series of Internet speed tests at more than a thousand specific locations for several years now. Over that time, mobile companies have upgraded their infrastructure and are capable of delivering fast, sometimes really fast, service. But judging from the latest results, either Californians are increasing their consumption of mobile data at an even faster rate, or the consistency of the new technology being deployed is dropping, or both.

Between the tests conducted a year ago and the latest round done this past spring, Verizon’s average speed in California – the highest of the four major carriers – increased from about 14 Mbps to just over 16 Mbps. Sprint stayed even at about 8 Mbps, T-Mobile went from 12 Mbps to 13 Mbps, and AT&T increased from 12 Mbps to just under 14 Mbps.

On the other hand, you have less of a chance of actually getting that kind of performance at any given moment. Rob does a good job of explaining the math and the methodology, but the bottom line is that the speeds you can expect to experience, as opposed to overall average speeds, are dropping: from 4 Mbps to just over 2 Mbps for Verizon, more or less the same range but a bit lower for AT&T and an even steeper drop to 1 Mbps for T-Mobile. Sprint only dropped a little, but its expected speeds are in the sub-2 Mbps range.

Mobile carriers are investing in more and better infrastructure, but judging from the CPUC’s measurements, not quickly enough to keep pace with Californians.

For results, trim down Pai’s broadband plan to an FCC punch list

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Use the home field advantage.

Earlier this week, FCC commissioner Ajit Pai offered a long checklist of actions he’d like to take to improve Internet access and promote economic development, in rural and inner city communities in particular. Those items fall into two categories: things he wants congress to do – good luck with that – and things the Federal Communications Commission can do on its own authority.

Pai is proposing gigabit opportunity zones – low income areas where service providers would get federal tax breaks to improve broadband service and entrepreneurs would likewise benefit if they located there. Great idea, but it’s something he’ll have take up with the next congress and president. He also wants government, at all levels, to back away from imposing “old rules on new industries”, including “from ride- sharing to room-sharing companies, automobile entrants to genetic testing startups”. The FCC has some authority to preempt state and local laws that intrude onto its telecoms regulatory turf, but he’s talking about something much broader.

There are several things on his list that the FCC can address, and that he might be able to find sufficient, bipartisan support among his colleagues to put into effect. Those include further preemption of local and state restrictions on wireless sites and other broadband infrastructure projects and greater federal regulation of pole attachment rules. It was pretty obvious at the CTIA conference last week that there’s a consensus among commissioners that the FCC should be more aggressively kicking down deployment hurdles that state and local governments erect.

Another idea that the FCC can implement on its initiative is to enforce stricter buildout requirements on mobile operators, so that spectrum assigned to less profitable areas – rural communities, in particular – doesn’t sit idle. That needs to change, Pai told a Cincinnati audience

Broadband PCS licenses, for example, had an initial license term of 10 years. Licensees were only required to provide service to 66% of the population. Similarly, some 700 MHz licenses only require providers to serve 75% of consumers by the end of their initial 10-year license term. After those initial license terms expire, the FCC generally allows wireless providers to retain their spectrum without any additional deployment required.

That’s a problem for rural Americans who typically live in higher-cost areas. A wireless carrier may never build out to those areas if it’s never required to do so, even though its exclusive license prevents anyone else from building out to that same area with that same spectrum.

As a grand vision, Pai’s checklist is a fine thing. But to turn at least some of it into reality, he should get to work on the things he and his fellow commissioners can actually do.

High, perhaps unrealistically high, price asked for TV spectrum

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Golden.

It’ll cost $86 billion to free up 100 MHz of broadcast television spectrum for licensed mobile broadband use and another 26 MHz for guard bands and unlicensed users. That’s the result from the reverse auction run by the Federal Communications Commission for television station owners, who were supposed to progressively bid down the price they were willing to accept in exchange for giving up their assigned channels.

That figure is more than twice as much as originally expected. The estimates made when the bidding began earlier this month pegged the likely cost at around $37 billion. The actual result was a jaw dropper for pretty much everyone involved – staggering amount is a common description – although in retrospect it makes a certain amount of sense. The next step is for mobile broadband companies to bid on how much they’re willing to spend to get the spectrum. If they don’t bid enough over the coming month to cover broadcasters’ offered price, the reverse/forward auction will go to another round. So keeping the sell price high in what would be just the first round of haggling is a rational move.

At this point, there’s little expectation that mobile broadband companies will be willing to meet that price. So the next step would be to cut back on the amount of spectrum sought and ask broadcasters to bid down sell prices again. It’s possible that three or more rounds will be needed, dragging the process into next year. The sky high price also throws cold water on hopes that the double auction would produce a windfall profit – once pegged at $24 billion – that would go towards public safety network upgrades.

Bill forcing California cities to lease cell sites, scrap permits magically appears

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Camouflaged with associated equipment. Can’t get any smaller than that.

Using a legislative maneuver delicately referred to as gut and amend, assemblyman Mike Gatto (D – Los Angeles) transmogrified a bill about natural gas storage into a free pass for mobile phone companies to 1. install cell sites pretty much anywhere they want with little or no oversight by local governments and 2. force local governments to lease publicly owned facilities for the purpose (h/t to Omary Masry at the City and County of San Francisco for the pointer).

Assembly bill 2788 will now, according to the legislative analysis…

Permit the use of a small cell, as defined, without a city or county discretionary permit or aesthetic review in all zoning districts, subject only to a building permit or administrative permit, as applicable. The bill would require a city or county to issue those permits, as applicable, within 60 days, except as specified.

And…

The bill would also prohibit a city or county from precluding the leasing or licensing of a site owned by the city or county for the installation of a small cell, except as specified.

The as specified exceptions are pretty thin, and would mostly serve to delay the inevitable by a month or two. The as defined qualification for small cell status is remarkably big. The antenna would be limited to something like the size of a coffee table (six cubic feet), while the rest of gear could be coffin-sized (21 to 28 cubic feet, depending on location). But the limit doesn’t include “associated” equipment like electric meters, back up batteries and similar, or anything that’s reckoned to be camouflaged or otherwise out of the public view. Wireless companies can install as much of that stuff as they want. Given the current downsizing trend in cell site design, the free pass will apply to the vast majority of installations.

AB 2788 was approved by the assembly back when it was about natural gas, so it’s sitting in the California senate now, where it’s scheduled for a hearing tomorrow in the energy, utilities and communications committee.