Industry Voices: Who walks the walk when it comes to spectrum build-out?

Industry Voices are op-eds from industry experts or analysts invited to contribute by Fierce staff. They do not represent the opinions of Fierce.

Everyone wants their own spectrum these days. The commercial network operators, the U.S. Defense Department, cable companies, satellite companies, secondary market players and more. But as we know, there’s a finite amount of spectrum accessible by current technologies which means there’s more demand than supply. Since that’s the case, this puts federal agencies tasked with making spectrum allocation and licensing decisions in a tight spot.

No matter what they decide, someone is going to be unhappy. So, what is a regulator to do these days? We’d suggest looking at the data and allocating the scarce resource to the entities that make the most efficient and productive use of it in the shortest amount of time.

What does the data say?

Sources: CTIA, NCTA, NTIA, FCC, Recon Analytics Analysis

The chart below shows that the U.S. commercial mobile industry has invested more private capital to buy and build out spectrum during the last 20 years than the cable industry and CBRS combined.

Some argue that it’s unfair to compare CBRS deployment and investment to commercial mobile because commercial mobile has been out there building for a longer period of time. That argument doesn’t really make sense since the mobile network operators have been building out successive technology upgrades, which is akin to them building out new networks every seven to eight years, much faster than the pace of CBRS buildout.

Spend, spend, spend

According to the FCC, CBRS launched in 2015. In the nine years since then, roughly $7.5 billion was invested in capital expenditures, roughly what the wireless industry invested in three months during the same time-span. In fact, the U.S. commercial mobile industry paid $228.7 billion to the federal government for the right to spend several billion more to build out commercial mobile networks spectrum .

The cable industry paid during the same time $1.2 billion for the same privilege. The $1.2 billion that the cable industry spent was for CBRS licenses that allow them access to low-power, small area licenses that they can tailor to their cable footprint. Utilities, industrial companies and fiber providers paid $600 million to have wireless licenses for their prioritized wireless licenses.

In sum, the commercial mobile industry spent $547.5 billion over the last 20 years to build out 4.5 generations of wireless technology nationwide, whereas he cable industry spent $326.2 billion to provide internet connectivity to fixed locations and then 5 years ago, to also provide mobile service by purchasing capacity from wireless operators. Only last year did the first cable provider launch their own CBRS capacity to off-load their customers’ traffic on licensed spectrum.

Where's the investment?

Despite being available since 2015, only an estimated $8.1 billion was invested by companies that only run CBRS networks or by fiber providers to extend their customer reach. As of January 1, 2023, in 78.1% of counties in the United States at least one CBRS transmitter was active. In California, North Carolia, and Texas more than a 1,000 CBSD transmitters were active, in Alabama, Maine, North Dakota, South Dakota, Rhode Island, Vermont and Wyoming ten or fewer CBRS transmitters were active.

By contrast, U.S. mobile network operators serve 328 million people and provide coverage to 99% of Americans, using only 450 MHz of spectrum, whereas cable companies provide connectivity through 22 million WiFi hotspots using 1,770 MHz.

U.S. regulators facing pressure to make more spectrum available for Wi-Fi instead of for full power, commercial at this point in time might want to consider the facts in terms of what market segment cab be fastest to market with the greatest amount of coverage to the greatest number of users and have the greatest economic impact. We know the answer. It’s the companies that walk the walk when it comes to building out spectrum.

Roger Entner is the Founder and Analyst at Recon Analytics. He received an Honorary Doctor of Science from Heriot-Watt University. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.