RCA 2011: 4G options abound for rural players

LAS VEGAS – With a significant win in gaining a government mandate on 3G data roaming in their back pockets, rural operators are now faced with the unenviable task of figuring out their plans for so-called “4G” networks.
At this week’s Rural Cellular Association event in Las Vegas, the topic of 4G was on the minds of many representatives in attendance and the topic of many of the event’s keynote speeches and educational sessions. One of those keynote events, in fact, turned into an almost sales pitch by various entities looking to attract rural operators to their respective 4G options.
Those pitches came from the likes of Verizon Wireless (VZ) and its LTE in Rural America program, LightSquared and its plans to rollout a nationwide wholesale LTE network using both satellite and terrestrial elements and a purchasing consortium looking to generate scale. These options are of course on top of any internal plans a carrier might have as a number of rural operators purchased 700 MHz spectrum licenses that they could use to build out their own networks.
Verizon Wireless’ program seems to be gaining significant traction with rural operators as the nationwide operator has announced nine carriers have signed up for its offering. Those included three in the past week with Oregon-based Custer Telephone Cooperative Inc., Carolina West and and Indiana-based S and R Communications L.L.C. all signing up for the program.
Philip Junker, executive director of business development for Verizon Wireless, explained to those in attendance that Verizon Wireless’ plan called for the carrier to lease 22 megahertz of 700 MHz spectrum to rural operators for terms of up to 19 years. The rural operator would then be tasked with building out the physical network in their coverage area, including providing cell sites and back haul that would then be linked into Verizon Wireless packet core.
For their efforts, the rural operator would gain quick access to a rapidly expanding LTE network and device ecosystem, be provided with a roaming agreement and would be free to offer the LTE service as a branded part of their current offerings.
“This is not a Verizon affiliate program,” Junker explained.
Junker did note that carriers would be required to meet certain network quality benchmarks, but would also receive exclusivity to the LTE service in the markets in which they agree to offer service. Junker added that it has received more than 260 valid enquiries about the program since it launched last June.
The program has garnered strong reaction from both sides as proponents of the offering, including those carriers that have signed up for the program, claim it allows them to move quickly to market with a robust 4G offering, something that as rural carriers they have never been able to do in the past.
However, many also continue to look skeptically at the program as Verizon Wireless has also been pushing a so-called 700 MHz “band plan” that does not require device and equipment makers to supply products that include all of the different 700 MHz spectrum bands auctioned by the government, including those that were acquired by rural operators. This has left many, including RCA, arguing that equipment makers will bypass building products that support all the 700 MHz spectrum bands and this limit interoperability.
Verizon Wireless has stated that equipment makers only needed to support its band 13, while AT&T Mobility is pushing only for support of its band 17 in the 700 MHz band. These were supported by the 3GPP that did require standards for interoperability between the different bands.
This issue was originally handled by the FCC in the PCS auctions with requirements that equipment and standards for the spectrum being auctioned be interoperable with all the spectrum auctioned in the 1.9 GHz band. For the 700 MHz auction, the FCC did not mandate such interoperability.
It must be noted that James Brunson from Samsung did note during his address to attendees that the company was fully committed to supporting the band class 12 in the 700 MHz band that is controlled by a number of rural operators.
Seeing the light through the clouds
LightSquared is taking a different tact with rural operators, offering wholesale access to its network for 4G services as well as partnering on roaming agreements.
LightSquared, which announced ambitious plans last year to rollout its terrestrial/satellite network, has garnered a handful of commitments to its still-to-launch network despite continued questions regarding funding, network build plans and interference issues. Those commitments include Leap Wireless International Inc., Open Range Inc., Cellular South and SI Wireless.
The deals typically call for a bilateral roaming agreement that will allow LightSquared to tap into the rural player’s 3G network to offer roaming services to other wholesale partners, as well as those rural players tapping into LightSquared’s LTE network to offer 4G services to their customer base.
Martin Harriman, EVP of ecosystem development and satellite business at LightSquared, told RCA members that the advantage of its offering was that it would not in any way compete with service offerings from the rural operator. Unlike partnering with Verizon Wireless, which directly competes against the rural players unless they sign up for the LTE in Rural America program, LightSquared’s wholesale-only model is all about serving the network needs of its carrier clients.
Harriman explained that this approach would provide for a very low cost structure for LightSquared, which would then be passed along to carriers.
As for the timing of that network availability, Harriman reiterated LightSquared’s claim that it would begin network trials early next year. The company has already launched one satellite that will provide for virtually nationwide coverage, with plans for a second satellite to launch shortly.
While the satellite component of LightSquared’s plans are nearly set, there are still some concerns regarding potential GPS interference from the network. Harriman said that LightSquared was diligently working with the government and GPS entities to solve any issue with initial network and device testing currently underway. A report on interference issues is expected to be delivered to the Federal Communications Commission by mid-June.
Harriman noted that while it was confident it would be abl
e to solve any interference issues, the company had a total of 59 megahertz of sp
ectrum at its disposal and that only a small portion of that would be impacted by the issue.
“No one has used our base stations or our filters yet for testing, that has just started now,” Harriman said. “We hope to get results and analysis over the next few weeks.”
As for its terrestrial network plans, Harriman did little to quell rumors that LightSquared was looking to partner with an established wireless player to help build out its network. While LightSquared has a $7 billion deal already signed with Nokia Siemens Networks, there has been increasing talk that LightSquared is inching closer to a relationship with Sprint Nextel Corp. that would allow LightSquared to piggyback on Sprint Nextel’s Network Vision plans.
That possibility could allow LightSquared to speed up its network deployment plans, which currently sit at covering 92% of the U.S. population with the terrestrial offering by the end of 2015, but could throw into question its current relationship with NSN as Ericsson, Alcatel-Lucent and Samsung Telecommunications Americas were tapped by Sprint Nextel for its upgrade plans.
Collective efforts
Another option for rural operators was provided by NetAmerica Alliance L.L.C., which is offering to pool the resources of 700 MHz license owners into a larger collective able to generate better pricing on equipment. In addition to that pooling of resources, NetAmerica is also offering to own and operate the core of an LTE network for clients, which would allow them to focus on the actual network infrastructure components.
Roger Hutton, CEO of NetAmerica, told attendees that the company’s offering would allow rural operators to remain independent of any outside influence that might come from partnering with a larger entity. The company said it has started to garner some traction with operators as it was under non-disclosure agreements with at least 100 spectrum holders and has four commitments.
In addition to helping with 4G services, Hutton said NetAmerica was also working on establishing a nationwide 3G roaming agreement that carriers could also tap into.