Verizon made a very strategic purchase when started acquiring LMDS spectrum in the 28-31 GHz band a few years ago, turning the then-unloved millimeter wave airwaves into the centerpiece of its 5G launch. This was, of course, virtue born of necessity, since the carrier had very limited 5G spectrum in the midband regions that would be most important for capacity-focused launches.
Since then, Verizon has spent a huge $53.4bn on 161 MHz of C-band midband spectrum, as well as rather less on CBRS frequencies, adding up to doubled holdings in bands between 1 GHz and 6 GHz. Its spectrum position is still less optimal, in terms of reach and variety, than T-Mobile’s, but vastly better than it was before 2020.
So perhaps the mmWave spectrum is no longer as critical to its 5G expansion, as Verizon looks set to sell some of its high frequency holdings to fixed wireless (FWA) service provider Etheric Networks. The main use of mmWave in the USA has been for FWA, but the short range supported by the spectrum in 28 GHz and 39 GHz leads to very limited coverage. Verizon will now market its mmWave 5G as a premium service in selected areas where it is available – mainly to extend its fiber footprint – while offering the C-band network as its main capacity offering.
A post by Etheric says the agreement is to purchase 20 LMDS licences, assuming the FCC approves. Markets include cities in California, New Mexico, Colorado, Utah, Arizona, Washington, and Oregon. Etheric’s CEO Alexander Hagen said the deal would support the company’s application for funding under the USA’s RDOF (rural digital opportunity fund).
It would use the spectrum to upgrade its current FWA services in the San Francisco Bay Area to gigabit-plus speeds (though it did not mention plans to migrate to 5G). It would also partner with local and regional service providers in other areas of the western USA
by providing access to the LMDS spectrum. The purchase would also make Etheric the largest holder of 29/31 GHz licences in California.
“Our goal is to get to 450 MHz of spectrum in every county we are deploying in RDOF,” Hagen wrote in a LinkedIn post, spotted by FierceWireless. Etheric has already spent $367,000 on CBRS priority access licences (PALs) covering seven counties.
Verizon has already agreed to sell 208 LMDS licences to GeoLinks to support FWA and 5G backhaul, and the deals have sparked speculation that the carrier is losing interest in mmWave now it has C-band assets. But it is more likely to represent a rationalization of Verizon’s high frequency spectrum to focus on 28 GHz, which is the main band enabling its 5G Ultra Wideband services, while reducing holdings in 29/31 GHz, which do not allow support for mobility. The strongest business case for mmWave build-out is often one that can provide consumers with a fixed/mobile proposition.
It seems that, if both GeoLinks and Etheric are permitted to buy the licences, Verizon will be out of the 29/31 GHz space, but will remain committed to the major US mmWave bands, 28 GHz and 39 GHz. The LMDS licences represent only about 10% of all the carrier’s total mmWave holdings in 24 GHz, 28 GHz, 37/39 GHz or 47 GHz, all of which allow either fixed or mobile access.
Verizon started its accumulation of high frequency spectrum when it acquired LMDS assets previously owned by FWA providers XO Communications and Nextlink. But since then, the FCC has held three auctions of mmWave spectrum that includes mobile permissions, and so is more 5G-suitable, and Verizon has been active in all of these.
In the most recent of those auctions (Auction 103), a year ago, Verizon spent $1.6bn on 4,940 licences in the upper 37 GHz, 39 GHz and 47 GHz bands, following on from Auction 101, in 28 GHz, and Auction 102, in 24 GHz.
At the start of the century, there was an investment bubble in LMDS, with companies like Microsoft piling into a perceived broadband wireless access (BWA) opportunity in the USA. In 1998, the FCC auctioned 1,300 MHz of LMDS spectrum, which was largely snapped up by Nextlink, Teligent, Winstar and Telcove. The bubble burst and these companies ended up in bankruptcy protection or sold on.
Two decades later, the move of standardized 5G technology into high bands reignited interest. The owners of the LMDS licences were now XO Communications, Straight Path and FiberTower, and these were targeted by both Verizon and AT&T. Verizon bought Straight Path, XO Communications and Nextlink, as well as smaller mmWave owners such Sunshine and Highland Holdings. It bought XO’s fiber business in 2016, a deal that also involved LMDS licences.
Originally, there were two LMDS channels, A and B – the former was later broken up and some of it was moved into the 28 GHz band, which was allowed to support mobile access and in which Verizon has built much of its 5G FWA network.