US$58,680,000,000 is the value of U.S. spectrum from 3.7 GHz to 4.2 GHz based on the actual prices paid in the Italian auction. I'm putting the figure out there in the hopes of inspiring the D.C. press watchdogs to learn enough to report accurately. Unless they do, far too much will be wasted in the usual lobbyist-dominated FCC process.

That figure is a good starting point. Prices in England and Korea were lower. A merger reducing the number of telcos would reduce the proceeds by billions. I know to be careful estimating auction proceeds. The last U.S. auction came in far under the estimates. The one before was far above. Technologies like Massive MIMO and carrier aggregation dramatically reduce the need for spectrum and will have an impact.

Spectrum can seem infinitely confusing but here are some of the current highlights:

Wall Street is betting US$4.5 billion that Pai and O'Reilly will give much of value to satellite companies led by Intelsat. O'Reilly has taken the enlightened position that the FCC can reclaim "300 MHz or more." Much more - almost all - can be recovered given what satellites can do today. The satellites are currently using a very small fraction of what's called the "C-band." The company has been losing money for years but the stock has gone from US$500 million market cap to US$5 billion this year.  With today's satellite technology, there is more than enough unused capacity in Ka & Ku bands to serve the broadcast receivers. Revenue is going down already as fibre costs keep falling. The rumour is that Verizon will pay them ~US$10 billion if they keep control of even 200 MHz, but I can't confirm it. There is absolutely no public policy reason for the windfall. The CBRS sharing mechanism can be used to protect the existing customers until the licenses run out. (The satellite guys - they are all guys - have hired legendary Disney lobbyist Preston Padden out of retirement.)

Verizon, T-Mobile, and Cox testing proves the CBRS sharing works and they are ready to jump in. They want to get de facto permanent licenses (presumption of renewal) probably for much less than they would spend at a true auction. It appears O'Reilly will change the rules Jon Leibowitz so intelligently crafted for the sharing. The telcos are highly likely not to materially increase their deployment if they get the longer terms because the technology for sharing does what they need. Their advocates on the Commission will claim the changes will significantly increase 5G deployment. I would not accept that claim unless the telcos are willing to guarantee they will deploy more. The Chairman can figure that out with four phone calls.

The coming auction of 28 GHz & 24 GHz will have very little impact on 5G deployment, at least for the next three to five years. The telcos, mostly Verizon, already own nearly all the good spectrum at 28 GHz. See Pai's 24% Solution For 5G Means Verizon + AT&T Own Almost All Prime Spectrum. What's left is mostly rural and may never be developed with mmWave. (Verizon and AT&T have said mmWave will mostly be in the cities.) 24 GHz has zero support from device manufacturers and will be unusable until that changes. If anyone, even the Chairman of the FCC, claims this auction will result in a significant increase in 5G deployment, ask for proof.

There's likely US$20-30 billion available for the U.S. budget, currently running a US$770 billion deficit. That includes making the satellite guys whole on their investment but not giving them a totally unneeded windfall.

Anyone willing to take my bet the D.C. reporters are likely to continue printing untruths from the government, lobbyists, and lobbyist friends.

(Note - I am happy to share files and sources with any working reporter.  After twenty years on the beat, I can almost always recommend independent sources unlikely to lie. On wireless, the real experts include Professors Rappaport of NYU, Schulzrinne of Columbia, Paulraj & Cioffi of Stanford. Their emails and usually phone numbers are on their websites.) 

Important caveat: Predicting values and auction prices here involves wild guesses. Remember that and do thorough research before applying this to policy.  

 

 

 

dave ask

Newsfeed

CFO John Stephens says AT&T is going to cut capex soon.

Bharti in India has lost 45M customers who did not want to pay the minimum US#2/month. It's shutting down 3G to free some spectrum for 4G. It is cutting capex, dangerous when the 12 gigabytes/month of use continues to rise.

Huawei in 6 days sold 300,000 5G Mate 20s. Delivery begins on 8/16. 

China has over 50,000 upgraded base stations and may have more than 200,000 by yearend 2019. The growth is astonishing and about to accelerate. China will have more 5G than North America and Europe combined for several years.

5G phone prices are down to $580 in China from Oppo. Headed under $300 in 2020 and driving demand.

No one believed me when I wrote in May, 90% of Huawei U.S. purchases can be rapidly replaced and that Huawei would survive and thrive. Financial results are in, with 23% growth and increased phone sales. It is spending $17B on research in 2019, up > 10%. 

5G phones spotted from Sharp and Sony

NTT DOCOMO will begin "pre-commercial service Sept 20 with over 100 live bases. Officially, the commercial start is 2020.

 More newsfeed

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Welcome  1,800,000 Koreans bought 5G in the first four months. The demand is there, and most of the technology works. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 3X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80+% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.