Small WISPs handed a tougher business case by FCC spectrum decision

by Steve Blum • , , , , ,

The Federal Communications Commission sided with big, national mobile carriers over small, local wireless Internet service providers (WISPs) yesterday. Whether that’s a good thing or not depends on where you think the market for wireless broadband service is heading.

The issue was use of the 3.5 GHz band (3550 MHz to 3700 MHz), which is frequently used for wireless broadband service – fixed and mobile – internationally, and is particularly sought after for 5G deployments.

In the U.S., it was allocated to the Citizens Broadband Radio Service (CBRS) in 2015. A complicated frequency sharing process was adopted, with existing users protected, and new users divided into “priority access license” and “general authorised access” categories. Existing users (there aren’t many) are protected from new ones; priority license holders take precedence over general access users, who don’t need to apply for a license but do have to coordinate their operations with everyone else.

Yesterday’s decision changed the way priority access licenses are assigned. The 2015 decision said that the licenses would be auctioned off census tract by census tract. The new rules say that assignments will be sold county by county instead.

That makes a big difference in California, where counties tend to be very large. If a local WISP wants a license, it’ll have to pay for county-wide coverage, even if only serves a limited area. Think of the largest Californian county, San Bernardino (it’s also the largest in the U.S.). It includes heavily urbanised areas north of I–10 near Los Angeles, many mid-sized desert communities stretching from Victorville in the west to Needles on the Arizona border, and vast stretches of sparsely populated desert between Barstow and the Nevada line. It would be a practical impossibility for a small company to come up with a business model that serves all of that.

Berdoo is an extreme case, but the same kind of county-level geographic and economic diversity can be found throughout California.

On the other hand, that’s not a hard problem for a mobile carriers with a national footprint. Because they already offer differentiated services across various types of communities and terrain, they urged the FCC to change the CBRS rules to suit their business model. The FCC complied yesterday.

There are concessions for the small guys: sub-leases and local bidding credits were allowed, for example. But the decision gives the four big mobile carriers – AT&T, Verizon, T-Mobile and Sprint – a big advantage. If they upgrade service for rural communities, and not just focus on affluent urban areas, prices should be lower and service levels higher than what local WISPs typically offer.

That’s a big if.