Broadband fixed wireless economics are considerably better than those for fiber-to-the-home, said Claude Aiken, president and CEO of the Wireless Internet Service Providers Association (WISPA) in written testimony presented to the House of Representatives Subcommittee on Communications and Technology yesterday.
Aiken urged subcommittee members to support spectrum policy favorable to WISPs. He argued that by spurring investment in broadband fixed wireless, a WISP-friendly spectrum policy could help minimize the need for government subsidies to support broadband buildout.
Broadband wireless has gained increased attention in the last year or so as major players such as AT&T and Verizon explore deploying it in less densely populated areas. Cable companies also are getting in on the broadband wireless trend, as evidenced by Midco’s participation in the Congressional hearing yesterday. Midco recently purchased a WISP and is offering broadband fixed wireless in some areas.
Broadband Fixed Wireless Economics
In his remarks, Aiken cited a 2017 Carmel Group report that found that WISPs can deploy fixed wireless service to residential customers at about one-seventh the cost of FTTH and about one fourth the cost of cable.
He also offered a more detailed example of broadband fixed wireless economics provided by a WISPA member. That member estimated the cost of fiber deployment to 100 customers in its serving area at about $928,600. At an average monthly customer fee of $69, it would take 11 years to recoup that investment. Deploying broadband fixed wireless to the same customers would cost about $37,500, according to the WISPA member. At an average monthly customer fee of $39, the investment could be recovered in just 10 months.
WISPA Policy Objectives
A key issue for WISPA is members’ ability to obtain licensed spectrum, and that ability could depend in large part on the rules that the FCC uses for two key upcoming auctions – including the auction of CBRS band spectrum at 3550-3700 MHz and the C-band auction of adjacent spectrum in the 3700-4200 MHz band.
WISPA advocates small license areas for the CBRS auction, but large nationwide providers want large license areas.
“[P]roposals to greatly enlarge the size of license areas in the CBRS band would be devastating to the WISP industry and would greatly affect the ability of businesses [to] make the economics of delivering broadband to rural America work,” said Aiken. Requiring a WISP to purchase a license for a large geographic area would be akin to requiring a company to purchase a shopping mall when all the company wants is to open a kiosk, he commented. Both sides have floated compromise proposals for the CBRS band, but are still at a standoff.
For the C-band auction, WISPA would like to see a portion of the total spectrum reserved for broadband fixed wireless use. WISPA backs the Broadband Access Coalition proposal that argues that a portion of the band would not be suitable for mobile use for several years because in some geographic areas, that spectrum is in use by video service providers. Large wireless carriers, which appear to have the backing of at least one FCC commissioner, argue that the spectrum should be made available to all types of carriers, even in the near term.
Aiken also touched briefly on the topic of government broadband subsidy programs. Although he didn’t mention specific programs, his comments appeared directed in large part toward the Universal Service Fund program that pays part of carriers’ costs of providing broadband service in high-cost areas. Most of that funding goes to incumbent local carriers for wireline infrastructure, but according to Aiken, “[i]t’s easy to see that if service can be deployed at one-fourth to one-seventh the cost, then there is much less need for doling out subsidies to large carriers to offset their much higher costs.”
It’s important to note, though, that only about half of high-cost USF dollars go to large carriers, with the rest going to smaller rural carriers.
According to Aiken, the right spectrum policy would make it easier for WISPs to gain access to private capital and expand broadband fixed wireless service to rural areas. “Thus, you can think of modernized, balanced spectrum policy as a much better substitute for costly subsidies,” he said.
While Aiken’s comments could be viewed as questioning traditional wireline broadband, it’s worth noting that some small incumbent rural wireline carriers also are using fixed wireless to provide broadband in parts of their territories.