It’s been one week since the FCC approved the CBRS spectrum band for full commercial deployment and we’re starting to see announcements of which broadband providers are using which spectrum access system (SAS) administrator. Anyone deploying fixed or mobile service in the CBRS band will have to pay a SAS administrator, and the SAS business should generate recurring revenues for the named administrators.
An example came yesterday from CAF II auction winner Nextlink Internet, which said it will be using the Google SAS. And I’m sure we’ll be seeing more such announcements in the coming weeks.
Here’s what network operators need to know about SASs.
The CBRS band includes a broad swath of mid-band spectrum between 3550 and 3700 MHz. Mobile carriers are expected to use it to support mobile hot spot type services and eventually 5G, while wireless internet service providers (WISPs) are expected to use it to provide fixed service at speeds up to 100 Mbps.
A portion of the CBRS band is used by the U.S. military along coastlines. Military users will have priority use of the spectrum, and a key role of the SAS is to prevent commercial users from using that spectrum when it is in use by the military. The SAS automatically assigns users to spectrum to frequencies within the band that the military is not using.
About half the spectrum in the CBRS band is slated for an auction to begin in June, and the rest will be available for unlicensed use. Additionally, until auction winners build out their spectrum or where a license doesn’t have a winning bid, that spectrum also can be used on an unlicensed basis. Another role of the SAS will be to track how much spectrum in an area is available for unlicensed use and to assign unlicensed users to available frequencies.
As part of last week’s commercial service announcement, the FCC said it had approved four CBRS spectrum access administrators – including CommScope, Federated Wireless, Google and Sony.
It’s a recurring revenue business, meaning that each new SAS administrator announcement represents years of future earnings for the administrator. Google, for example, is charging about $2.25 per network device per month for the use of its SAS — and anyone deploying CBRS likely will have to pay something in that range to one administrator or another.
CBRS Spectrum Access Administrator Revenues
A representative for Nextlink did not immediately reply to some questions from Telecompetitor about its CBRS and SAS news. But if the company plans to use CBRS for its CAF II deployment, that would be a recurring revenue stream for Google and an ongoing expense for Nextlink. And considering that Nextlink committed to delivering service at speeds of 100 Mbps for most of its CAF II service area, CBRS would appear to be a logical choice to support those deployments.
Nextlink was one of the biggest winners in the CAF II auction, winning $281 million over 10 years for deployments in unserved areas of several states. The company committed to making service available to over 100,000 locations, and while not every location will ultimately sign up for service, carriers deploying high-speed broadband to previously unserved areas can see strong take rates.
Assuming Nextlink does use CBRS for CAF II and executes well, and if 50% of customers sign up for service within a few years of deployment, Nextlink may be obligated to pay Google $2.25 per month times 50,000 locations or about $112,500 monthly or $1.35 million annually for the foreseeable future. Nextlink and Google may have negotiated their own terms, so this assumption is based only on publicly available information.
Another company that could be a big CBRS user is cable company Midco, which has been emphasizing fixed wireless for the last year or so. That company did a CBRS trial using the Federated Wireless SAS, which may or may not be Midco’s long-term choice.
Google previously announced that it would provide CBRS SAS services for Associated Carrier Group, a buying group for smaller rural service providers.
Recognizing potential CBRS spectrum access administrator revenues, it’s not surprising to see SAS administrators touting their wins.
According to a press release, Nextlink chose the Google SAS offering because it leverages Google’s “detailed awareness of real-world objects like trees and buildings.”