Analyst Angle: 4G LTE leveraged for fixed wireless broadband in rural communities
By Berge Ayvazian, senior analyst and consultant, Wireless 20/20 on JUNE 6, 2017Analyst Angle, Carriers
Approximately 30% of U.S. households in remote and rural communities still lack access to high speed broadband, and availability of fixed terrestrial broadband services in rural America continues to lag behind urban and suburban areas at all speeds. High speed internet access via DSL, cable and fiber is still cost prohibitive in rural and remote areas, and is available is only where providers can deploy these networks profitably. Approximately 2,000 WISPs currently fill this gap by providing fixed wireless broadband services to more than 4 million households in small towns and rural communities in all 50 US states. Although the WISP industry is still highly fragmented, consolidation among WISP has been accelerating.
Rise Broadband has leveraged private equity investments by Antares Capital and LStar Capital to acquire 100+ smaller operators since its founding in 2006, and is now the largest U.S. WISP with approximately 200,000 subscribers in 16 western states.
The next largest WISP, SpeedConnect, now serves 50,000 subscribers in 10 mid-west and southern states, having leveraged funding from NewSpring Capital and a Kemper Corp. subsidiary to acquire CommSpeed and Sioux Valley Wireless. Although the majority of these subscribers are being served using proprietary technologies in unlicensed 5GHz spectrum, we have seen a significant uptick in investment in the use of 4G LTE technologies using licensed spectrum as a key technology enabler of fixed wireless broadband in rural areas where communities are small and housing density is low.
Rise Broadband continues to expand its fixed LTE wireless coverage area in more than 20 small-to-mid-sized markets, increasing peak Internet speeds up to 50 Mbps to allow its rural and suburban subscribers to receive faster Internet access, streaming, shopping and other online activities. Rise currently uses LTE spectrum in the 3.65 GHz “lightly licensed” band and has 16 licenses in the 2.5 GHz band. Rise plans to continue acquiring more 2.5 GHz spectrum to expand its fixed LTE wireless coverage.
SpeedConnect recently began using FCC-licensed 2.5 GHz EBS and BRS spectrum to launch LTEXtreme Internet, with 5, 15, 25 and 50 Mbps speeds to meet subscriber needs for streaming video services. Redzone Wireless has been offering 4G LTE-Advanced networkservice using its statewide 2.5 GHz FCC-licensed EBS spectrum in Maine since June 2015. Redzone recently launched a new multi-spectrum ultra-fast fixed wireless broadband service branded 5Gx, using both licensed 2.5 GHz LTE and unlicensed 5.8 GHz wireless broadband technologies to achieve up to 450 Mbps on a single tower with subscriber speeds of 50 Mbps downstream and 10 Mbps upstream. Redzone is now actively exploring possible strategic partnership models to support the expansion of 5Gx to other areas of the U.S. struggling with inadequate broadband infrastructure.
|Operator||LTE Fixed Wireless Coverage||Brand||Broadband Speed|
|Rise Broadband||20 small-to-mid-sized markets||Fixed LTE Wireless||up to 50 Mbps|
|SpeedConnect||1.1 million HH and businesses||LTEXtreme||5, 15, 25 & 50 Mbps|
|Redzone Wireless||Statewide in Maine||5Gx||50 Mbps down & 10 Mbps up|
Until recently, the largest U.S. telecom and wireless network operators had not shown much interest in using fixed wireless technology to deliver fixed broadband to rural communities. But six of the leading telcos accepted more than $1.4 billion in funding in the second phase of the FCC Connect America Fund (CAF-II) to bring broadband to an estimated 3.5 million households and businesses in rural uncovered areas. The FCC has deemed high speed broadband service as a necessity in today’s technology environment, and has established a minimum standard of 10 Mbps downstream and 1 Mbps upstream. That standard may be raised to 25/3 Mbps for the third wave of CAF funding in 2017. CAF II funding was accepted by CenturyLink, AT&T, Frontier, Windstream, FairPoint and Consolidated Communications, while Verizon opted out of the high-cost broadband program.
|Operator||CAF II Rural Location Coverage||Geographic Coverage||CAF II Funding|
|CenturyLink||1.174 million||33 states||$505.7 million|
|AT&T||1.1 million||18 States||$427.7 million|
|Frontier||660,000||28 states||$283.4 million|
|Windstream||404,626||17 states||$174.9 million|
|Fairpoint||105,220||14 states||$37.4 million|
|Consolidated||24,700 rural locations||7 states||$13.9 million|
|Total||3.469 million HH and businesses||$1.443 billion|
A recent Wireless 20/20 study demonstrates that fixed wireless could reduce capital expenditures by more than 50% for many low-density CAF II funded high-cost rural broadband deployments. Now that mobile broadband service is available to nearly the entire US population, some of the largest operators have begun to focus on fixed wireless as the most cost-effective technology to deliver broadband to rural and remote households.
AT&T recently announced plans to use a fixed wireless network to reach these CAF households when the cost to serve subscribers with DSL is too high. AT&T has a CAF II commitment to deliver high-speed broadband service to more than 400,000 locations in 18 states by the end of 2017 and over 1.1 million households and businesses by 2020. AT&T’s Fixed Wireless Internet (FWI) will meet the FCC’s CAF-II requirement to deliver a home internet connection with download speeds of at least 10 Mbps downstream and 1 Mbps upstream. The fixed wireless connection comes from a tower to an antenna on customers’ homes or businesses. Fixed Wireless Internet service will be provided using standard LTE base stations, but runs over a largely separate network from AT&T’s current mobility infrastructure. The use of separate base stations, tower antennas and spectrum will keep the fixed wireless service from interfering with mobility services.
|Operator||LTE Fixed Wireless Coverage||Brand||Broadband Speed|
|AT&T||67,000 locations in Georgia
400K locations by the end of the year
1.1 million locations nationwide in
|Fixed LTE Wireless||10 Mbps downstream
1 Mbps upstream
AT&T has proven this hybrid of terrestrial and wireless broadband products newly combined to be a more cost-effective approach to delivering high-quality, high-speed internet to customers living in hard-to-reach rural and sparsely populated underserved areas. AT&T recently completed a first wave of fixed wireless internet availability for rural and underserved locations in Georgia, with plans to reach over 67,000 locations with fixed wireless technology across Georgia by 2020. AT&T plans to expand its Fixed Wireless Internet to 1.1 million locations nationwide in 17 more states later in 2017. The AT&T fixed wireless service will be priced at $60 per month for the broadband only service and this price rises to $70 with no contract.
AT&T also intends to offer fixed wireless broadband service bundled with DIRECTV, lowering the monthly cost to $50, with a one-year contract. The fixed wireless service will have broadband usage caps of 160 GB per month, with additional 50 GB increments of data charged at $10 per month.
Wireless 20/20 has learned that AT&T will be using its licensed 2.3GHz WCS spectrum (Band 30) to deploy this rural fixed wireless service. AT&T acquired WCS spectrum from NextWave and Sprint in a series of transactions beginning in 2012. After resolving interference with Sirius XM satellite radio the wireless carrier began deploying its 2.3 GHz WCS spectrum, initially as a “capacity layer” for LTE mobile broadband service on top of its nationwide 700 MHz in a handful of dense urban markets during 2015.
|AT&T Spectrum Block||Capacity||Coverage||Percent of Continental US Pops|
|WCS A and B||10-20 MHz||473 CMAs||70%|
|WCS C and D||5-10 MHz||344 CMAs||54%|
AT&T has not disclosed any vendors for either the fixed wireless LTE base stations or outdoor antennas, but will use the same AT&T Wi-Fi gateways used for DSL service. The dedicated outdoor antenna will be professionally installed on the chimney or roof, somewhat like a satellite dish today. Instead of aiming at the satellite, the outdoor antenna will be aimed towards a cell tower. An Ethernet cable will run from the outside antenna to an AT&T Wi-Fi gateway inside the house which will support up to 4 Ethernet-connected devices and multiple Wi-Fi enabled devices like laptops, smartphones and tablets, similar to how many wired home internet customers are connected today. AT&T will charge a $99 installation fee for FWI when purchased either standalone or with a wireless plan, and this installation fee will be waived if bundled with DIRECTV.
Wireless 20/20 expects this AT&T initiative to be of interest to other telcos that have accepted CAF-II funding and plan to apply for additional funds for rural broadband, such as CenturyLink, Frontier, Windstream, FairPoint and Consolidated Communications. Even Rise Broadband recently announced plans to expand its Fixed LTE Wireless network in 10 market areas in Illinois, Iowa, Kansas, Nebraska and Texas, leveraging the $16.9 million funding received through the Rural Broadband Experiment (RBE) program, part of the overall FCC CAF program for broadband expansion in rural markets.
There has been a distinct shift in FCC policy in favor of wireless broadband, as Chairman Ajit Pai recently announced the formation of the Rural Broadband Auctions Task Force to oversee both the upcoming Connect America Fund Phase II (CAF-II) and the “reverse auctions” for Mobility Fund II. The upcoming FCC CAF-II reverse auction will make nearly $2 billion available for bidders to connect unserved and underserved census blocks in 20 states over the next decade. The FCC MF-II reverse auction will make more than $4.5 billion in new funding available over ten years for expanding 4G LTE mobile broadband coverage across rural America and Tribal lands. T-Mobile recently asked the FCC to lower the speed and latency thresholds for Mobility Fund II, reducing the broadband downlink benchmark from 10 Mbps to 5 Mbps.
Analyst Angle Contributor to RCR Wireless NewsSenior Analyst, Wireless 20/20Berge Ayvazian, now a principal consultant, joined Wireless 20/20 as a Senior Analyst in 2009, following more than 20 years as a senior telecom industry analyst and strategy consultant with Yankee Group, where he served as CEO and co-chairman of the 4G World and Mobile Internet World conference programs.Ayvazian is now conducting 4G Network and Mobile Internet research on the convergence of broadband and mobility and the evolving business strategies of mobile service providers and their technology vendors. He leads an integrated 4G/LTE practice to help operators and their vendors to develop their 4G technology roadmaps and build a complete mobile Internet business case leveraging the Wireless 20/20 WiROI™ 4G Business Case Analysis Tools. He has used these tools to develop operator 4G network business cases, and address the most challenging modeling problems associated with Wi-Fi Offload, Small Cell deployments and 4G networks to serve venues such as stadiums, airports and train stations.