Analyst Angle: 5G fixed wireless access for wireless fiber broadband in U.S. urban markets

Despite calls for harmonized 5G spectrum at MWC, the U.S. and EU seem to be on different paths at least in the near term. Several spectrum bands were identified by the ITU WRC-15 for future 5G services, including three bands above 6GHz in the 24 GHz, 31 GHz and 40 GHz bands. Europe is currently focusing on sub-6GHz spectrum for initial 5G trials and deployments, including C-Band (3.4 – 3.8GHz), to be allocated for 5G across multiple markets. The EU Council recently adopted a decision which calls for the coordinated use of the 700 MHz band to drive the roll-out of 5G wireless technology and boost mobile broadband connectivity in all EU member states. As a result of this decision, European mobile operators will obtain exclusive access to the 700 MHz band (694-790 MHz) by June 2020, a timeframe that coincides with the expected deployment of 5G networks in Europe.

In the U.S., the FCC has been pushing for operators and their vendors to get a head start with 5G by unilaterally identifying new mmWave spectrum bands above 6GHz. The FCC’s Spectrum Frontiers proposed order was intended to establish a spectrum environment conducive to 5G investment. The FCC plans to license spectrum in the 28GHz, 37GHz and 39GHz bands on an exclusive-use, flexible-rights licensed basis, and has identified the 64-71GHz band for unlicensed experimental sharing or other non-exclusive access arrangements. The FCC has already allocated temporary spectrum licenses to mobile operators for field trials, and is planning to move forward with early auctions of licensed mmWave spectrum. 5G Americas recently published a white paper on 5G Spectrum Recommendations that highlights the importance of spectrum harmonization across licensed and unlicensed low-, mid- and high-band to support smooth 5G network deployments and delivery of 5G services.

U.S. operators testing 5G FWA in mmWave bands

Operators with spectrum in the 28GHz and 39 GHz bands are among the first to test 5G fixed wireless access services in the U.S. Verizon and AT&T have been first movers in conducting field trials of 5G technologies to support fixed wireless services in the U.S. Both operators have wireline operations that have been deploying fiber, but are now testing 5G FWA as a more cost-effective approach to expand the coverage and capacity of their fixed broadband networks.

AT&T recently announced its 5G Evolution plans for 2017 and beyond, and is collaborating with more than a dozen global technology companies around 5G standards. AT&T has been testing 5G FWA in Indianapolis and Austin to understand propagation challenges of very-high-frequency mmWave spectrum and ability to provide large bandwidths. After successful lab tests of 5G in millimeter wave spectrum earlier this year, AT&T has launched its second fixed wireless “5G” trial in Austin, TX, to test the delivery of live DirecTV Now as well as broadband services using millimeter wave spectrum.  AT&T Labs is also conducting “field trials” with several utility companies under its Project AirGig to deliver low-cost, multi-gigabit wireless internet speeds using power lines.

Verizon’s 5G efforts are more concentrated on developing a fixed wireless product that will deliver a competitive advantage and near-term return on investment.  Verizon wants to use 5G FWA to reduce the capital cost of extending the reach of FiOS services via fixed wireless to more U.S. households in select metros.  During Mobile World Congress, Verizon reported that its customer trials of 5G technology were set to begin in the second quarter of 2017.  Verizon recently reported its first trial 5G network was deployed last month in Ann Arbor, MI, and the remaining 10 pre-commercial 5G trial networks will be deployed by the end of 2017.

Both AT&T and Verizon have been aggressively pursuing acquisitions of mmWave spectrum. Verizon recently completed the $1.8 billion acquisition of XO Communications with 26,000 route miles of inner-city fiber networks in 85 cities including Seattle, Miami,New York City and Los Angeles. In this transaction, Verizon also obtained an option to buy the 102 licenses XO holds in 28 GHz and 39 GHz bands that cover 63% of US pops by year-end 2018. Verizon is now using 100+ megahertz of 28 GHz and 39 GHz spectrum leased from XO to conduct pre-commercial 5G FWA trials.

In February 2017, AT&T quietly announced plans to acquire mobile backhaul provider FiberTower which holds interests in a total of 738 mmWave 24GHz and 39GHz licenses that cover over 30 U.S. cities and towns. Neither the financial terms nor a timeline for the transaction were disclosed and 650 of FiberTower’s millimeter wave licenses were later terminated for failure to meet the FCC’s construction requirements. AT&T has asked the FCC for permission to use all licenses once controlled by FiberTower, while the Competitive Carriers Association has urged the FCC to take back these 650 terminated licenses and auction the 24 GHz and 39 GHz spectrum.

AT&T recently announced plans to acquire Straight Path Communications which holds 133 licenses in the 28 GHz band and 735 licenses in the 39 GHz band. AT&T proposed a transaction with a value of $1.6 billion in stock for Straight Path’s 28 and 39 GHz spectrum in the 40 largest markets across the United States, including New York City, Los Angeles, San Francisco, Atlanta and Washington, DC.  Verizon ultimately won the bidding war, as Straight Path’s Howard Jonas has accepted the $184 per share offer in an all-stock transaction, reflecting an enterprise value of approximately $3.1 billion. Verizon will also have to pay a $38 million termination fee on behalf of Straight Path to AT&T, and Straight Path will pay a penalty of 20% of the proceeds from its $3.1 billion sale to Verizon as part of an earlier settlement with federal regulators.

T-Mobile US and Sprint testing 5G mobile on mmWave and sub-6 GHz bands
T-Mobile US has also conducted successful 5G testing using Nokia’s AirScale radio platform using 28 GHz and 39 GHz LMDS spectrum obtained in the MetroPCS acquisition. But T-Mobile does not plan to use 5G for fixed wireless access and is targeting nationwide 5G coverage by 2020. The Un-carrier Road to 5G is disruptive and T-Mobile sees 5G as completely transforming the mobile Internet and delivering amazing breakthroughs such as live streaming of videos and concerts, 8K video, 4K 360 video, virtual reality and augmented reality. T-Mobile US recently announced plans to begin rolling out a 5G network in 2019, using the 600 MHz spectrum acquired for $8 billion in the recent FCC auction. The FCC recently completed the 600 MHz auction, but cannot release this low-band spectrum to operators until the remaining broadcast spectrum is repacked, a process that could take 39 months. This makes 600 MHz a likely coverage band for 5G mobile services to be rolled out after 2020.

Like T-Mobile US, Sprint does not plan to use 5G to provide fixed wireless broadband targeting businesses and residential households. The cornerstone of Sprint’s future 5G network will be a massively dense network that uses high-bandwidth spectrum to deliver vast amounts of data at tremendously high speeds. Sprint is building a strong foundation for 5G by densifying its network with smart antennas to meet future 5G demand for higher data rates. Sprint has worked with both Ericsson and Nokia to demonstrate 5G capabilities with Samsung virtual reality (VR) headsets showing 360 degree views. But rather than acquiring mmWave spectrum, Sprint emphasizes the use of massive MIMO 32/32 or 64/64 along with its more than 150 megahertz of 2.5 GHz spectrum as the anchor band for its 5G activities.

Leading vendors supporting North American 5G FWA operator field trials
Ericsson, Nokia and Samsung each announced and an end-to-end 5G product portfolio and claimed to be on track for commercial availability by yearend 2017. All three vendors have been participating in North American 5G FWA operator field trials with point-multipoint (PMP) New Radios using beamforming and massive MIMO in mmWave spectrum to provide very high bandwidth links directly to houses and offices. Wireless 20/20 conducted briefings with four vendors participating in North American 5G FWA network field trials.

Ericsson has announced 32 operator partnerships for 5G, including Verizon, AT&T, T-Mobile and US Cellular. Samsung has been testing 5G networks with AT&T, T-Mobile and Verizon and recently commenced an extensive Verizon field trial. Unlike Ericsson and Samsung, Nokia is not participating in any AT&T 5G FWA field trials and is focused on developing the first 5G end-to-end platform built to Verizon’s “5G Technical Forum” specifications known as 5GTF New Radio developed along with Korea Telecom outside of 3GPP’s current specification.

Verizon CEO Lowell McAdam recently revealed that based on early field trials, fixed wireless broadband service based on 5G technology will not require line of sight between the transmitter and receiver. Verizon believes that advances in antenna and processing technology have essentially eliminated the need for fixed 5G line of sight. In Verizon’s non-line of sight testing, the underlying technology “took all the different reflections” of the signal and supported speeds of 1.4 Gbps over distances of 2,000 feet.

3GPP fast-tracking non-standAlone 5G NR specifications to accelerate 5G FWA
Soon after MWC 2017, the 3GPP announced a major decision to adopt a two-phase workplan for standardizing the specifications for the 5G New Radio (NR).   This new work plan introduced a Phase 1 intermediate milestone for the early completion of the Non StandAlone (NSA) mode where the control of the 5G radio service will be “anchored” in the LTE evolved packet core while 5G NR carriers are used to boost data-rates and reduce latency. The release of an NSA 5G NR configuration by December 2017 would enable deployments based on the technology in early 2019. However, in its own release, 3GPP confirmed the change, but noted the NSA specifications will be finalized by March 2018. At the same time, the 3GPP re-instated its commitment in Phase 2 to standardize a standAlone (SA) mode5G NR mode anchored by new 5G cores by September 2018.

Wireless 20/20 believes that splitting the 5G NR standards process into two stages could mean that it would be possible for operators to deploy “5G FWA” services earlier than if vendors and device manufacturers had to wait for the full specs to be frozen. But fast-tracking the NSA 5G NR specifications could also slow down work on standalone 5G new radio standards. Verizon has already deployed 5G radios for fixed wireless customer trials in more than 10 U.S. cities, however the equipment may not align with the 3GPP’s initial NSA 5G NR standards even with the accelerated work plan.   Therefore Verizon may have to upgrade its firmware and/or software in these 10 cities in order to ensure that its services work with the 3GPP’s 5G NR standards.