Tuesday, November 26, 2019

Spectrum Policy is the Latest in a Long String of "U.S. is Falling Behind" Claims

Over the past few decades I have often heard observers expressing great worry about one or another divides or gaps that have U.S. service providers and consumers behind users and customers in other regions.

U.S. consumers were “behind” Europe and Japan in mobile phone use, text messaging, 3G use, internet access, broadband adoption and speeds, and always are “paying too much” for their services.

The U.S. is falling behind meme never goes away, where it comes to communications. The latest assertion is that the United States is falling behind in 5G. That claim has been made many times in the past, and always has proven wrong.

In the past, it has been argued that the United States was behind, or falling behind, for use of mobile phones, smartphones, text messaging, broadband coverage, fiber to home, broadband speed or broadband price.

It is an old pattern of claims. Consider voice adoption, where the best the United States ever ranked was about 15th globally, for teledensity (people provided with phone service). Does anybody think that was any kind of impediment to economic growth?

With the caveat that some rural and isolated locations never got fixed network phone service, not many would seriously argue that the supply or use of fixed network voice was an issue of any serious importance for the nation as a whole, though it is an issue for rural residents who cannot buy it.

Some even have argued the United States was falling behind in spectrum auctions.  What such observations often miss is a highly dynamic environment, where apparently lagging metrics quickly are closed.

The latest candidate is 5G spectrum policy. 

Over the past year there have been many shouts of alarm about the “choices” being made for 5G spectrum. Millimeter is the wrong spectrum, it has been said. Mid-band spectrum is the “right choice,” many have argued. 

Those criticisms are rather off point. Different countries are making different immediate choices largely because--of a range of permissible frequencies--mid-band is available. 

For historical reasons, the mid-band is not immediately available in the U.S. market, forcing early movers to rely on millimeter wave spectrum sooner than they might have preferred, even if the 5G standards clearly point to millimeter wave as the future of 5G, and subsequent platforms as well, simply because that is where most of the unencumbered spectrum exists. 

The U.S. Federal Communications Commission is not ignorant. It knows what resources can be made available now, and what has to happen to clear more mid-band spectrum. It is doing so. Clearing part of the C-band is among the actions the FCC is taking. But that takes time. 

Verizon, in particular, has had to rely on millimeter wave. Among the top four national carriers, it has the least spectrum, per customer. And after weighing its options for bandwidth, Verizon concluded that upgrading its terrestrial network with dense optical fiber, enabling small cells and hence millimeter wave radio networks, made more sense than bidding for lots of new spectrum. 

That does not mean Verizon or the other service providers will be shy about bidding on additional spectrum. “More” is always the answer, longer term. 

Still, Verizon believes the cost of its dense fiber network approach will work for capacity expansion. Verizon surely will rely on mid-band for coverage. AT&T initially relied on millimeter wave for its business-focused services, especially for fixed network substitution. 

Its consumer 5G will use 850 MHz low-band spectrum, and AT&T will acquire more mid-band spectrum when it is made available. 

T-Mobile, with relative plentiful new 600-MHz assets, will rely on low-band for its 5G launch. Sprint has lots of mid-band spectrum licenses, which will eventually be put to work by whatever company winds up owning it. 

The larger point is that no dangerous or wrong spectrum choices have been made by the FCC or service providers. Specific firms have made choices congruent with their assets and strategies. Long term, there is no “choice” to be made between millimeter wave and mid-band spectrum or low-band. All will be used.

But different service providers in different countries have differential access to low-band or mid-band spectrum. So the initial strategies and deployments will reflect those immediate realities. Longer term, all the choices will be in play. 

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