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13 November 2019

Will new rules for 12 GHz transform Dish’s spectrum valuation?

One of the spectrum assets that Dish owns (see lead article) is the largest US share of the 12.2-12.7 GHz band, which could increase in value dramatically as operators seek new sources of 5G bandwidth, and particularly, access to ‘midband’ assets with better coverage, and lower capex bills, than millimeter wave (mmWave).

After Dish, the second largest owner of 12 GHz spectrum is a small firm called RS Access, which has about 15% or the total.

Last year, RS Access signed a spectrum lease and purchase deal with MDS America, which acquired 80 12 GHz licences in 2004-5. It is not just a spectrum asset trader, but has deployed 300 links across 60 active markets, its equipment supplied by UK-based Cambridge Broadband Networks (CBNL).

These are currently one-way backhaul or point-to-point links, but like the MVDDS 5G Coalition, set up in 2016 with Dell at its head, RS Access is lobbying for rule changes to allow for two-way, mobile communications in the band. The Coalition consists of companies which now hold licences originally granted for MVDDS (Multichannel Video Distribution and Data Service – see below).

RS Access’s founder V Noah Campbell is urging the FCC to open up 500 MHz of contiguous midband spectrum for 5G, in a proposal which would reclassify 12 GHz as ‘midband’.

The FCC itself has used that description of a band which, until MNOs started building in 26 GHz and 39 GHz, would definitely have been considered a high frequency band. But the US operators have limited access to true midband spectrum, putting them at a disadvantage to their counterparts in most other geographies, where early 5G roll-outs are focused on 3.5 GHz – a band which provides better coverage than mmWave (similar to 2.5 GHz when beamforming is used), and fewer engineering and device challenges.

In the USA, part of the 3.5 GHz band is being opened up under the complex CBRS scheme, while battles still rage with the satellite community over the C-band. Only Sprint, with its large swathes of 2.5 GHz spectrum, is well-placed in the midband.

Campbell had a meeting with the FCC last month, and told FierceWireless: “I think this could be the next iteration of the C-band, but in a lot of ways, it’s a lot easier”, because there are fewer incumbents.

In a recent report by New Street Research, analyst pointed out that a reformed 12 GHz band would be a good candidate for US 5G, but any plan will depend on Dish’s agreement, since it is the dominant player in this spectrum.

Other current owners of 12 GHz assets include AT&T, which uses the spectrum for its DirecTV satellite services. AT&T has opposed the demands of the MVDDS Coalition – which mirror those of RS Access – saying two-way mobile operations would harm Direct Broadband Satellite (DBS) services.

Satellite operator OneWeb has added its voice to that argument, telling the FCC in a filing that the 12.2-12.7 GHz band is vital to certain satellite firms, especially to support next generation NGSO fixed satellite operations for US consumers. Multiple NGSO operators, including OneWeb, have launched satellites and started to build networks for 12 GHz. By contrast, the company wrote, MVDDS licensees “continue to camouflage their failure to utilize the 12 GHz band in hopes of successfully reaping a spectrum windfall”.

OneWeb is part of the Satellite Alliance, whose members also include Boeing, Space Norway and Intelsat. It has argued that the 12 GHz band is not a suitable candidate for terrestrial wireless broadband use because satellite operators use it intensively every day. “The DBS bands are filled with literally millions of receive-only DBS antennas that inherently are incompatible with a terrestrial mobile service,” the Alliance wrote in an FCC filing. “Moreover, satellite use of the 12 GHz band is increasing.” OneWeb, Space Norway and Boeing are planning to offer high quality broadband to underserved communities using this spectrum.

“The imminent deployment of OneWeb’s innovative, state-of-the-art NGSO FSS system will provide precisely the kind of two-way, low latency, high speed connectivity utilizing the 12 GHz band—including to unserved and underserved populations—that the Coalition can merely tout as a future benefit,” OneWeb wrote. “The implicit rationale underlying the MVDDS Petition—i.e. the 12 GHz band is underutilized—is even less compelling today than it was when filed more than 18 months ago.”

But RS Access told the FCC in its submission that it believes expansion in the band for incumbent 12 GHz and MVDDS licensees can be accomplished without interference to satellite services. In particular, he – like the Coalition – is urging the adoption of a Spectrum Access System (SAS), similar to that used to prioritize different types of user in the CBRS band, to ensure harmonious coexistence.

The firm insists that the 12 GHz band is the only frequency below 24 GHz that supports the large channel bandwidths that operators need to deliver full 5G services for many industries. “When you think about what you could do with 500 MHz of contiguous radio spectrum, you could create two 250 MHz channels, or you could create five 100 MHz channels,” he said, rather than be stuck with 20 MHz channels, as is being discussed for the C-band.

The 12 GHz spectrum was originally allocated for MVDDS but has been in limbo for about 15 years. MVDDS was designed for one-way video services, using an orthogonal ground signal which does not interfere with the 12.2-12.7 GHz satellite-to-ground distribution signal used, for instance, for satellite TV. It is only licensed for one-way video distribution, and a handful of experimental services are in operation, such as one called Sail Internet in Palo Alto, California, which uses MVDDS as the delivery part of an interactive high speed broadband signal for condominiums.

Most of this spectrum is now owned by Dish, which bought much of it in bankruptcy proceedings, and has been asking the FCC for the past two years to change its use to allow mobile two-way communication. If the FCC were to make a move on this spectrum, it could change the Dish stock valuation overnight, as it would own much of a 500 MHz slice of spectrum ready for 5G.