North America leads the world on the adoption of 4G wireless and likely will lead on 5G, not without risks, S&P Global said Wednesday. “Aggressive 5G deployment strategy increases credit risk for the U.S. telecoms at a time when M&A, mature industry conditions, and competitive pressures are already straining their balance sheets although tax reform might provide near-term relief,” the report said. “Upfront costs are likely to be considerable and the potential financial benefits are largely unproven and could take years to come to fruition.” S&P warned revenue gains from the expanding IoT, autonomous vehicles and other new applications “will take time to develop, while capital outlays in the form of spectrum license acquisitions and fiber network deployments are likely to be substantial.” S&P said most new revenue sources will take five-to-10 years to materialize. The race to 5G likely won’t have negative implications for the credit ratings of the carriers, the report said: Capital expenditures and spectrum purchases “are manageable.”

Ericsson officials spoke with the FCC team reviewing T-Mobile buying Sprint at the team’s request. Ericsson said it focused on a “technical understanding of 5G networks.” Issues discussed included “different upgrade scenarios for existing cell sites, the potential changes needed to retrofit a site, and the flexibility designed into the Ericsson Radio System,” said a filing Wednesday in docket 18-197.

Samsung said it bought artificial intelligence-based network and service analytics company Zhilabs, part of a $22 billion strategy to boost investment in companies to drive growth in AI, 5G, automotive electronic components and biopharmaceuticals. The acquisition lays the foundation for 5G offerings in automation and network analytics, it said Wednesday. AI-based automation will enable new services in connected cars and industrial IoT to analyze user traffic, classify applications and improve service quality, Samsung said. “5G technology will disrupt the communications landscape for the better, but it will only be successful if the quality of the networks transferring the information can be measured and improved," said Joan Raventos, CEO at Barcelona-based Zhilabs, which will operate under its own management.

Chief Technology Officer Neville Ray and others from T-Mobile and Sprint met with FCC officials examining the companies’ proposed deal. The topic was the network engineering model for the combined company, said a filing in docket 18-197. “T-Mobile and Sprint described how the combined company would be uniquely positioned with complementary spectrum assets in the low, mid, and high bands to drive a robust, nationwide 5G network to the benefit of consumers,” the Thursday filing said. “The transaction would allow for a multiplicative effect for capacity due to the increase in number of cell sites, amount of spectrum available per cell site, and increases in spectral efficiency.” The companies said the model is “built upon T-Mobile’s ordinary course practices and models standalone T-Mobile, standalone Sprint, and New T-Mobile for both LTE and 5G.” The filing includes slides. The District of Columbia approved the deal last week (see 1810120021).

The FCC Office of Engineering and Technology gave AT&T special temporary authority to operate a 5G new radio (NR) system using 28 GHz spectrum in a collaborative trial at the University of Southern California, Los Angeles. “The 5G air links … will be used to test and verify the performance of various applications that require very high speeds and very low latencies, to confirm the benefits of 5G NR for such applications,” AT&T said. “The results will provide valuable information to users whose feedback could be used to enable product development and system optimization, as well as to improve future system standards and the deployment processes.”

Rules designed to speed deployment of small cells and 5G take effect Jan. 14, says a Federal Register notice scheduled for Monday. The FCC approved the changes in September over concerns by Commissioner Jessica Rosenworcel (see 1809260029).

Ericsson CEO Borje Ekholm, Ericsson North America CEO Niklas Heuveldop and other top executives met last week with FCC Chairman Ajit Pai to express support for many of his policies. “Given the need for hundreds of thousands of new base stations expected in the U.S., reducing the time involved in tower siting is critical for maintaining the lead in 5G,” said a filing posted Wednesday in docket 14-177. The company said an order scuttling 2015 net neutrality rules “clears away a cloud of uncertainty over network slicing, a key component of 5G.”

FCC Commissioners Mike O'Rielly and Jessica Rosenworcel agreed U.S. 5G leadership is critical but under challenge and requires more spectrum and infrastructure. In back-to-back Q&As at The Atlantic Festival Wednesday, both said other countries are moving ahead aggressively with 5G wireless efforts. They differed on how best to spur 5G deployment, their level of concern about U.S. tariffs, the need to prepare for 6G, and state net neutrality efforts. American industry is "leading the charge," O'Rielly said, but other nations are engaging in "industrial policy" through standards-setting bodies and other mechanisms to gain advantage. He said the U.S. response must remove local barriers to antenna siting and make spectrum available to give companies the tools to invest. "We can't rest on our 4G laurels," said Rosenworcel, citing China, Europe and South Korea as racing to clear spectrum for 5G, and Asian deployment as advanced: "I think I see [U.S. leadership] as much more fragile than my colleagues do." She said incentives are needed for DOD to free up spectrum and for states and localities to streamline siting processes, including grant programs. Focus on how 5G connectivity can address problems such as traffic congestion and air pollution, she suggested. She again voiced concern that new 10 percent tariffs (with 25 percent possible in 2019) on Chinese products, including telecom network equipment, could slow deployment. O'Rielly isn't too worried about the tariff dispute near term because he suspects the issues will be worked out in "cat-and-mouse" negotiations, but if not, his concern will increase. He said there's so much 5G "heavy lifting" to do that he hasn't focused on 6G. Rosenworcel said it's not too early to start thinking about that future, which promises even more radical network advances and broader changes. On net neutrality, she welcomed the "extraordinary activity around the country" as states pass laws and governors and mayors take actions. O'Rielly said there's much agreement on principles and Congress could draft a workable law, which he believes shouldn't ban all paid prioritization. Instead, advocates pushed through a "crazy" California law banning zero-rating plans and called it "the gold standard," he said. "If that's gold, then I want to operate in a different currency."

Intelsat, SES, Eutelsat and Telesat formed the C-Band Alliance in a move aimed at accelerating access to midband spectrum for 5G. A July FCC NPRM sought comment on the band (see 1807120037). “The formation of the CBA is a significant achievement and demonstrates the industry alignment necessary to make this mid-band spectrum available quickly, thus supporting the U.S. objective of winning the race to introduce terrestrial 5G services,” the companies said. “The proposal establishes a commercial and technical framework that would enable terrestrial mobile operators to quickly access spectrum in a portion of the 3,700 to 4,200 MHz frequency band in the U.S., speeding the deployment of next-generation 5G services.” The coalition includes Head-Advocacy and Government Relations Preston Padden, a key player in the TV incentive auction, and CEO Bill Tolpegin, who was co-founder and CEO of OTA Broadcasting. The announcement “appears to be a great step to quickly and orderly reallocate the spectrum to commercial wireless use,” said Commissioner Mike O’Rielly.

The world’s first commercial 5G network, being built by Verizon, went live Monday in parts of Houston, Indianapolis, Los Angeles and Sacramento. The first installation of Verizon’s fixed 5G Home service was at the Houston home of Clayton Harris, “the first 5G customer in the world,” Verizon said. The other major U.S. carriers are also moving toward launch. “We’ve formed incredible partnerships with many of the world’s leading technology companies, the international technical standards bodies, public officials, developers and our own customers to drive the 5G ecosystem forward, faster than most had predicted,” said Verizon Wireless President Ronan Dunne. “We’re just at the starting line.”