During an investor conference Tuesday AT&T Communications CEO Jeff McElfresh shared an update on C-band hold ups related to FAA worries over interference, saying new power limits shouldn’t be cause for much concern.
AT&T and Verizon already voluntarily agreed to push back activating recently acquired C-band spectrum for 5G by one month until January 5 so that the Federal Aviation Administration could review air safety concerns, raised again about interference with airplane equipment operating in the 4.2 GHz band.
McElfresh noted that the issues were already debated in prior years, before the FCC auctioned spectrum between 3.7-3.98 GHz. Still, in early November the carriers said they would temporarily hold off on deployments. That move was made regardless of a “massive guardband between our C-band deployment and what we’ll radiate versus what the airline radar altimeters use in some vintage equipment that they’re most concerned about,” McElfresh said during Wells Fargo Annual TMT Summit.
Radar altimeters are key for pilots to determine a plane’s altitude above the ground.
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The FCC left a 200 MHz guardband in place ahead of Auction 107. The first 100-MHz batch of spectrum AT&T and Verizon paid top dollar for (along with billions of dollars to prep it for deployments) and plan to turn on in major markets falls in the 3.7-3.8 GHz range.
Just last week the carriers agreed to lower power levels for C-band base stations for a 6-month period, while maintaining their stance that 5G operations in the band don’t pose a risk of interference. The wireless industry has pointed to 5G deployments in other countries using C-band spectrum that haven’t shown problems with aviation equipment.
Asked by Wells Fargo senior analyst Eric Luebchow about hitting deployment targets and whether power limits will affect performance or propagation, McElfresh indicated the overall impact of power level concessions to the FAA is small. AT&T has had to coexist with other users and make modifications to power levels before, he noted.
“I think it’s been somewhat overblown in terms of impact,” McElfresh said. “If I look at the investment thesis for C-band and I look at a broad PoP coverage map, really it’s a very single digit percentage or less of the number of cell sites of PoPs covered that we’ve got to make these modifications to.”
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Those cell sites are largely in and around airports, helipads, or final approach slopes where aircraft land, according to McElfresh.
“So it’s not a major impact on the radiated signal strength nationwide on the C-band spectrum,” he said.
In the competition for 5G network prowess, C-band spectrum is more vital for AT&T and Verizon than T-Mobile. T-Mobile also scooped up licenses at auction but already has a trove of mid-band airwaves thanks to 2.5 GHz it obtained through the merger with Sprint. Mid-band is seen as a sweet spot of delivering a mix of both coverage and capacity for 5G service, compared to low-band or millimeter wave spectrum.
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Although AT&T agreed to push back the timeline for lighting up C-band spectrum, it’s not preventing other deployment work. McElfresh pointed out that activities like hanging antennas and prepositioning radios are still ongoing.
AT&T aims to cover 70-75 million people with C-band by the end of 2022 and 200 million by the end of 2023.
“All in all, in the grand scheme of things I wouldn’t be overly concerned about this as an investor,” McElfresh said, adding that he himself as head of the communications company is not. “We’ll work through it.” While citing high confidence that the parties will resolve issues, he acknowledged frustration at having to repeat discussions after years of conversation.
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“It’s important to us that we participate with our government officials to make sure everyone is safe and concerns are addressed,” he added.
Analysts at New Street Research have said they don’t believe power limits will affect customers’ perception of 5G service and don’t expect the commitments to last past the July 6 timeline.
However, the wireless industry believes delaying C-band activations beyond one month could pose a problem. Wireless industry trade groups including 5G America, CCA, CTIA and others sent a letter to the White House earlier this month insisting that rollouts aren’t held up longer than January.
According to CTIA President and CEO Meredith Attwell Baker, pushing back C-band deployment by one year would subtract $50 billion in economic growth.