Activity in fixed wireless spectrum to heat up next year: Maravedis

Deployments of systems operating in the 2.3 GHz and 2.5 GHz bands in the United States is expected to speed up next year as the licences are set to expire in 2007, according to research firm Maravedis. The following is an edited excerpt of the executive summary of the BRS, EBS and WCS Regulatory and Licensing Analysis report released by the company on December 1. As of November 2005 there were 1,767 broadband radio service (BRS) and 2,571 educational broadband service (EBS) licences listed on the Federal Communications Commission (FCC) wite. These numbers have been very stable over the past several months with only the occasional change in ownership noted. An examination of the license details shows that there has been very little change activity in these licenses in the past couple of years. Those licences were shared among 1,980 companies controlling the totality of , BRS and wireless communications services (WCS) licences in the US. Initially multipoint distribution services (MDS) licensees paid a total of $216 million through the initial spectrum auctions in 1996 and thereafter. Since then, many licences changed hands. Now there are 367 companies using the BRS spectrum and a staggering 1,598 companies controlling the spectrum. This report provides a current and clear listing of who those licensees are. Until 2005 commercial broadband wireless operations in the 2.3 GHz (WCS) band have been limited primarily to equipment trials or limited deployments in small markets. In the 2.5 GHz (BRS) band operations have been ongoing for years by the incumbent MDS and instructional television fixed service (ITFS) operators. These operations have been limited to video and limited data service. This service was generally used for the transmission of data and video programming to subscribers using high-powered systems, also known as wireless cable. Over the years the uses have evolved to include digital two-way systems capable of providing high-speed, high-capacity broadband service, including two-way Internet service via cellularized communications systems. Such services provide consumers integrated access to voice, high-speed data, video-on-demand, and interactive delivery services from a wireless device. There has been very little activity in the WCS licences since they were granted in 1997. A total of 282 x 5.0 MHz licences equivalent to 1,410 MHz of spectrum were made available for this service. WCS OutlookWCS licence holders are getting ready for a significant push in 2006/7 as most of the WCS licences were granted in 1997 and are due to expire in 2007. RFP activity has increased significantly in 2005 from those license holders as confirmed by vendors themselves. Many of these companies are in the same equipment search mode as their BRS counterparts. For those licensees which hold both BRS and WCS licenses (notably BellSouth and Nextel) it makes good sense that they will combine their broadband service offerings under a common equipment supplier. After all, a potential customer does not care whether his wireless ISP (WISP) is providing service in the 2.3 or 2.5 GHz band. Overall, Maravedis believes that 2006 will be the year of decision for both WCS and the newly transitioned BRS broadband wireless offerings. BRS OutlookIn 2004, the commission released a ruling defining the transition of the MDS/ITFS rules to a new service called BRS – including commercial BRS and broadband services. Since release of the decision, several petitions for reconsideration have been filed by interested parties seeking modifications to the ruling. These petitions will serve to extend finalization of the transition process. The commission was supposed to rule on these petitions in September, but this process was put on hold due to the hurricanes, etc. Public comment solicitations have not yet been circulated by the FCC. It is hoped that this will occur before the end of 2005. Another factor delaying widespread commercial deployment is that some of the major licence holders (BellSouth, Nextel, etc.) are still evaluating equipment and planning their networks. Several of these licensees have stated that they want to deploy mobile WiMAX. Nextel (Sprint) are developing an 802.16e-based solution in partnership with Motorola. Craig McCaw’s Clearwire is proceeding with a portable non-line-of-sight solution from its manufacturing arm NextNet Wireless. BellSouth is proceeding with limited deployments using a pre-WiMAX product from Navini Networks. BellSouth is likely to accelerate completion of their Florida network next year as the spectrum was granted in 1996 and will expire in March 2006. The challenge for all operators is that WiMAX radios in the 2.3/2.5GHz bands will not be commercially available until at least the end of 2006. Therefore licence holders will have to continue deploying proprietary or pre-WiMAX equipment for at least another 12 to 15 months. Summary of the three major BRS licenseesSprint and Nextel currently have a combined total equity value of approximately $70 billion and serve more than 35 million wireless subscribers on their networks and five million additional subscribers through affiliates and partners. The two companies, along with their affiliates and partners, operate networks that directly cover nearly 262 million people, more of the US population than any other carrier. The decision of the FCC not only allowed the combined company to keep its 2.5GHz spectrum, but laid down conditions that should see broadband services based on it be within reach of at least 30 million US homes before the end of the decade. According to the FCC statement, the combined operator is under obligation to "fulfill its voluntary commitment to meet certain milestones for offering service in 2.5GHz band, unless circumstances beyond its control prevent the merged entity from reaching those milestones." Specifically, Sprint Nextel is required to offer services using this spectrum to reach at least 15 million Americans within four years, and an additional 15 million potential subscribers within six years. The FCC has already announced plans to open up the 3.6GHz band under a light licensing scheme to stimulate rural broadband, which still may be pushed mostly to start-ups, rather than fall into the hands of the Regional Bell Operating Companies. But that 3.6GHz spectrum will be shared, so the 2.5GHz and 2.3GHz bands are the most likely to lead to a country-wide broadband wireless service in licensed spectrum. This in turn will trigger other BRS licence holders to accelerate their deployments or resell/lease their existing licenses when possible.

Activity in fixed wireless spectrum to heat up next year: Maravedis

News | December 14, 2005

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