The nearly completed C-Band Auctions are going to bring a whole new set of capabilities to 5G phones ... [+]
If you’re the least bit curious about either the current state of 5G here in the US, or its near-term future, then you may have seen or heard news about an auction run by the US FCC (Federal Communications Commission) that recently completed its critical first phase. Technically known as Auction 107, it’s a process by which the US government is providing the ability for companies to license and use 280 MHz of radio frequencies in what is known as the C-Band—specifically in the 3.7-3.98 GHz band. (If you need a primer on radio frequency (RF) spectrum and how it relates to 5G, check out “The 5G Landscape, Part 2: Spectrum and Devices”. For more on C-Band, you can read “CBRS Vs. C-Band: Making Sense Of Mid-Band 5G”.)
For those of you keeping score, these newly available C-Band frequencies are part of what is generically referred to in the 5G world as mid-band, which is a subset of sub-6. More importantly, in every country around the world that has launched 5G networks—except the US—these mid-band frequencies are at the very heart of their 5G networks. The reason? They offer a great combination of reasonably good coverage and enough open frequency space to enable high-speed connections.
Unfortunately, these frequencies weren’t available for use in the US when 5G first launched here, because they had been assigned to the satellite TV industry (not DirecTV-style tiny dishes, but the old physically large ones) back in the 1970s. Because those types of TV services have fallen out of favor, there has been huge demand to reallocate those frequencies for other purposes—most notably 5G. The C-Band auction is the highly anticipated culmination of many of those efforts.
In fact, interest in these mid-band frequencies was so high that major US carriers and other telco-related companies (57 in total) combined to bid just under $81 billion dollars for the licensing rights to use them—nearly doubling the previous spectrum auction record of $44.9 billion for AWS-3 4G LTE bands back in 2015. The final allocation of specific frequency blocks will happen the week of Feb. 8th, at which point we’ll know which carriers got access to which frequencies in which metropolitan areas and how much they each paid for it all.
Even in advance of the specifics, though, it’s rumored that Verizon bid north of $30 billion, AT&T around $20 billion, T-Mobile about $10 billion, the combination of Comcast and Chartered over $10 billion, Dish Networks (which is planning to become a fourth 5G-only carrier in the US) around $5 billion, and the rest among smaller regional telcos. More important than the specific figures, the general amounts are so high that they speak volumes to the importance that major telcos and service providers are placing on these mid-band frequencies.
To put it plainly, no matter what any of the carriers have said in the past about other types of 5G spectrum—particularly Verizon and their fawning over mmWave-based 5G—you don’t spend this kind of money unless you intend it to be the absolute core part of your network. Based on the results of this auction, I’d argue that it is now abundantly clear that the future of 5G in the US (as it is in other countries) is in mid-band.
That’s great news for T-Mobile, who specifically purchased Sprint to get access to the 2.5 MHz mid-band frequencies that it had previously licensed and, as a result, is the only US carrier with currently deployed mid-band frequency holdings. The news is clearly less good for both Verizon and AT&T, but it also explains why those companies likely spent so much more on the C-Band auction to get access to those frequencies—they really need them. It also explains why Dish believes it can make a go as a mid-band 5G-only carrier.
The near-term challenge is that the availability of this newly licensed spectrum won’t be immediate but will happen in waves over the next few years. Satellite companies, like Intelstat and SES, that currently own the C-band licenses have been using some of them for satellite transmission of broadcast content to production companies, and they are in the process of transitioning to higher frequencies in the 4 GHz range. The first 100 MHz, or the A-Block of C-Band, will be cleared for use by the end of this year, but both the 100 MHz B-Block and the final 80 MHz C-Block aren’t expected to be ready for use and deployment until the end of 2023.
The other big challenge is that the carriers spent so much for access to the frequencies that they’re having to take extremely large loans to cover those payments to the US government, yet they still need to make investments in network equipment to actually use them. While most believe the risk is well worth the potential long-term reward, debt-laden telcos may be a bit slower to purchase the cell towers, antennas, and other equipment they need to take advantage of their new RF assets than would be ideal. We shall see.
In the meantime, expect to see a lot of handwaving about how to best deploy a 5G network with existing spectrum. Within a few years, however, all the US carriers will likely coalesce their 5G network strategies around mid-band. Low-band sub-6 will end up serving as a supplement for rural coverage and other situations where long range is apparent, and mmWave will primarily serve specialized environments like sports and entertainment venues, airports, and small sections of big cities.
The good news for consumers is, once the first block of C-Band frequencies come online, you can expect to see dramatically improved speeds for 5G over much wider coverage areas. To put it into perspective, many of the low-band 5G services are based on 10 or even 5 MHz chunks of spectrum, versus as much as 100 MHz for C-Band (though it is still much smaller than the potential 800 MHz for mmWave). Of course, there’s much more to final download speeds than just bandwidth—various forms of carrier aggregation, signal compression, massive MIMO antennas, and many other clever tech tricks have a big influence—but it’s still a decent proxy for the 10x or better speed improvements that will be possible with C-Band.
From a carrier-specific perspective, whatever C-Band spectrum T-Mobile acquires will be in addition to its existing holdings, giving them a clear technical advantage against the other big carriers, who will essentially be starting from scratch in mid-band. As in many tech areas, simply having the best tech assets doesn’t automatically bestow victory—there’s always a lot of marketing and salesmanship involved as well. Nevertheless, it will be interesting to see how the US 5G carrier competition evolves and whether or not T-Mo can maintain its advantage.
The good news for consumers and businesses is that the release and usage of these new frequencies should finally bring the dramatic shift in 5G performance for which we’ve all been waiting.
Disclosure: TECHnalysis Research is a tech industry market research and consulting firm and, like all companies in that field, works with many technology vendors as clients, some of whom may be listed in this article.
