While You Probably Never Thought You Needed To Understand Intricacies Of How Cellular Networks Operated By AT&T, T-Mobile And Verizon Work.
While You Probably Never Thought You Needed To Understand The Intricacies Of How Cellular Networks Operated By AT&T, T-Mobile And Verizon Work, some big news that affects those operations will have real-world impacts on the services that they offer and that we rely on. Specifically, late Wednesday the U.S. FCC (Federal Communications Commission) announced the final results of what’s been commonly called the “C-Band Auction.” The end result is a significant recasting of how the Big 3 carriers are going to compete and what they’re going to be able to offer in the 5G era.
The C-Band auction involved purchasing the right to use certain radio frequencies for delivering 5G services – think of it as adding lanes to each of their existing wireless data superhighways. (To dive a bit deeper into the technologies behind 5G, check out one of my previous columns on the topic “5G could change everything. Here’s what you need to know before you buy into the tech.”)
What makes this news particularly interesting is that these aren’t just any frequencies, but a large chunk of critically important ones referred to as mid-band (because, at 3.7 to 3.98 GHz they fall into the middle of available frequencies used for wireless networks). In every country around the world except the U.S., 5G networks have been built around this mid-band spectrum, as it’s called, because it offers the right combination of coverage area and width of data lanes over which our TV shows can be streamed, Instagram posts uploaded, worldwide web browsed, etc.
Other industries (notably the old school, large C-Band satellite dishes – hence the name) had previously been assigned to use these frequencies in the U.S., so they’re just now becoming available here. Having had to wait a long time, the major U.S. carriers were certainly hungry for access to these mid-band frequencies. In fact, so much so that the auction raised a record-setting $81 billion, of which $78 billion was spent by Verizon, AT&T and T-Mobile.
Notably, Verizon spent a whopping $45 billion for access to about 160 MHz of the 280 MHz of radio frequency spectrum made available, nearly double AT&T’s $23 billion for 80 MHz, and 4x more than T-Mobile’s roughly $10 billion, which netted them around 30 MHz. (The remaining $3 billion and roughly 10 MHz was split among a number of smaller carriers and other companies.)
5G: Money in the middle
By themselves, these numbers are very interesting and say a lot about how important the carriers viewed these frequencies for their future 5G service plans. In addition, at first glance, they seem to make the argument that Verizon has positioned itself more strongly than its competitors. However, the real story is more complex than that, and the implications behind these numbers are even more telling than they first appear.
First and foremost, these investments make it clear that the future of 5G wireless in the U.S. is going to be all about mid-band, just as it is in other countries around the world. What that also means is, despite all the hoopla that carriers have tried to make about the two other main types of 5G service, they will soon be reduced to more secondary “support” functions for 5G.
We’re talking about, most notably, the nationwide but slow low-band 5G service that T-Mobile (with 600 MHz) and AT&T (at 850 MHz) have been touting, as well as the superfast, but nearly impossible to find short-range, high band millimeter wave (mmWave)-based service that Verizon has been particularly vocal about – its UWB, or Ultra Wideband service.
Low-band service will primarily be used for rural coverage and high-band mmWave will primarily be used for special situations, such as in large venues, airports, and outdoors in some very dense, urban areas. To be clear, both of these 5G flavors will still be important, but they’ll only be part of the 5G story instead of the primary focus, as they have been to date.
Additionally, from a competitive perspective, it’s important to note that T-Mobile already has a huge swath of mid-band spectrum it acquired when it purchased Sprint. In fact, according to some reports, it’s a bit more than what Verizon and AT&T combined purchased via this auction. That’s why T-Mobile spent so much less and also explains why they still have a significant lead in available mid-band frequencies to use for 5G.
The other benefit for T-Mobile is that it is the only carrier that’s currently using mid-band to deliver 5G, and that’s resulting in speeds that are about 10x higher than standard 4G speeds in cities where the company has enabled its mid-band 5G service.
So what next for 5G?
Things will start to get more interesting around the end of this year or early 2022, because the first 100 MHz of the C-Band frequencies will become available then and only Verizon (which got 60 MHz) and AT&T (which got 40 MHz) have access to the first batch. (All the remaining C Band frequencies, including the ones T-Mobile licensed, won’t be available until 2023).
As a result, by this time next year, we should have the first set of truly competitive, mid-band based 5G offerings with significant speed enhancements over what we have available now. Of course, one of the challenges for the carriers is that, while they just spent huge sums of money to get access to those game-changing frequencies, they still must spend a lot more to purchase equipment necessary to upgrade their networks to use those frequencies. That, in turn, could lead to higher prices for these new 5G services – although the strong competition that’s going to exist may temper that.
What faster 5G data means for you
Finally, the other big takeaway from all this news is that the availability of more and faster data lanes that come as a result of using these new frequencies will give carriers the opportunity to deliver some of the first 5G-only services that we’ve all been promised.
New types of offerings – including things like high-speed wireless 5G broadband service to compete with cable providers – can only be made available to wider audiences with the help of these frequencies. In addition, there could be other interesting new capabilities we haven’t even thought of yet that only become possible with this new mid-band spectrum.
From a current market perspective, T-Mobile has about a year head start over its competitors to get going on both faster speeds and additional new 5G services using its existing mid-band frequencies. At the same time, it’s clear that that the results of the recent auction to license new frequencies is going to create some interesting new opportunities for all the major US carriers, and we will all benefit from that.
This news was originally published at USA Today.