AT&T plans to deploy much of its C-band spectrum at the same time it deploys the 3.45 GHz licenses it bought in a recent FCC auction, CEO John Stankey told analysts on the company’s Q4 call Wednesday. Stankey said the radios needed for 3.45 GHz should become available in late spring or early summer. Installing the bands “together at one time with one tower climb … allows us to start really going what I would call good guns on this in scaling up,” he said. AT&T has followed a similar one-touch strategy in building out FirstNet spectrum.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
Latest spectrum auction news
Blame the Donald Trump administration, not the FAA, for the fight over the C band that slowed 5G deployment, former FCC Chairman Tom Wheeler blogged Friday. Wheeler noted the NTIA received a letter in December 2020, before the C-band auction, raising concerns, but the letter was never passed along to the FCC or the wireless carriers. President Joe Biden has shown the leadership needed to reach a compromise, Wheeler said. “When the prior administration’s failure to resolve the interagency dispute ended up putting at risk the wireless companies’ $81 billion [in C-band bids] and threatening the economic growth promised by 5G, President Biden and his aides stepped up,” he said: “Instead of meaningful spectrum policy management, the Trump administration produced slogans.” The CEOs of two major airlines said on earnings calls last week a resolution is in sight. “While we don't have a final resolution quite yet, I'm confident we'll get there,” said United Airlines CEO Scott Kirby: “While I wish it happened earlier, the good news is we now have everyone engaged, the FAA and [Department of Transportation] at the highest levels, the equipment aircraft manufacturers, airlines and the telecoms. And I'm confident we'll soon have a clear set of objective criteria that will allow a full rollout of 5G without significant impact to aviation.” The fight wasn’t the airline industry’s “finest hour,” said American Airlines CEO Doug Parker. “It's taken a while to get to the right spot, but I feel like we're in the right spot,” he said. “I don't think you're going to see any material disruption going forward because of this.” Neville Ray, T-Mobile president-technology, emphasized to customers that C-band delays didn't affect his company because it’s mostly using 600 MHz and 2.5 GHz. “T-Mobile’s 5G network, already covering over 1.7 million square miles and 310 million people nationwide, and our customers are not affected by this,” he said: “By the time we’re ready to put our C-band licenses to use in late 2023, we’re confident today’s concerns will have been resolved.”
AT&T’s industry-leading bids of $9.1 billion in the 3.45 GHz auction won't affect its ratings since expenditures in that range were expected, S&P Global Ratings said in a Wednesday note. AT&T’s adjusted debt to EBITDA ratio remains “elevated in the 3.7x-3.8x range” but should decline after its sale of Warner Media, S&P said. “We view AT&T's longer-term competitive position as weaker relative to that of its wireless peers Verizon and T-Mobile,” S&P said: “While the acquisition of 40 MHz of nationwide spectrum will improve the company's overall mid-band spectrum position, it still operates at a competitive disadvantage to T-Mobile, especially given T-Mobile's head start in building out its 2.5 GHz band for 5G services.” The firm sees few opportunities to buy more mid-band spectrum this year.
AT&T and Verizon plan to start turning on their C-band operations Wednesday, despite a push by major airlines to delay the start. Both said Tuesday they will defer the launch around some airports and expressed frustration with the FAA.
The biggest surprises in the 3.45 GHz auction were that Dish Network came in relatively big and T-Mobile small, according to the early analysis of the results, which were released Friday (see 2201140040). Verizon dropped out of the auction, after dominating the C-band sale, as expected (see 2111170037).
FCC handling of designated entities SNR Wireless and Northstar Wireless got probing Friday by Judge Harry Edwards as he repeatedly criticized the idea that ostensible investor protections gave Dish Network de facto control of the DEs when the FCC hadn't worried about those same protections in past DE situations. Judge Patricia Millett tore into the DEs' assertion that they had made substantive changes from the original terms of their investor agreements with Dish, in the nearly two-hour U.S. Court of Appeals for the D.C. Circuit oral argument (docket 18-1209). The DEs are challenging the FCC's 2020 rejection of the AWS-3 bidding credits -- the second time the agency did so (see 2011230062). New Street Research's Blair Levin said the panel appeared to side with FCC arguments, as was expected.
The FCC wrapped up its comment cycle on the future of the 4.9 GHz band. But industry officials told us further agency action likely isn’t imminent, with issues to wade through before recommending a final approach. Commenters disagreed whether there should be a national framework with a nationwide band manager, though there's general support for expanding use of the band. A question is who other than public safety agencies should be given access.
Senators and industry officials are eyeing a laundry list of policy matters they want Alan Davidson to prioritize once he becomes NTIA administrator. The Senate confirmed Davidson Tuesday on a bipartisan 60-31 vote, as expected (see 2201050056). The chamber voted 64-30 Monday to invoke cloture on Davidson (see 2201100058).
Verizon has no doubts it will be able to start turning on its C band in two weeks, after reaching an agreement with the FAA and aviation industry (see 2201040070), said Chief Technology Officer Kyle Malady at a Citi virtual conference Wednesday. “This is the final agreement,” he said: “We feel this is it.” The presentation was the first by a top Verizon official since the agreement was unveiled.
The FCC will likely take on several spectrum proceedings in coming months, regardless of what happens to the nomination of Gigi Sohn as the third Democratic commissioner, industry officials said. Those items could include proposals on the 12 GHz and 4.9 GHz bands, the lower 37 GHz band, revised rules for short-range field disturbance sensor radars in the 60 GHz band and allowing cellular vehicle-to-everything deployments in 5.9 GHz.