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5G’s Deployment’s Downside? Dip in Small Cell Spend

By J. Sharpe Smith, Senior Editor


The long awaited 5G deployments may disrupt other areas of the wireless infrastructure buildout, Earl Lum, president, EJL Research, told an audience at IWCE, this week in Las Vegas.

“Since we are at the cusp of rolling out 5G, small cells and anything on the periphery with get put on the back burner. Whenever a new network gets rolled out, you see priorities change,” Lum said. “You are going to see a big shift back to sub-6 Gig, particularly the CBRS band at 3.5 GHz.”

Indications from the carriers during the MWC19 in Barcelona last week are that purchases of small cell equipment and siting are beginning to slow down in the United States, which coincides with the increased concentration on a 5G macrocell deployment.

“I learned at the Mobile World Congress that all the countries that are planning to deploy 5G are deploying it on macrocells, collocating it with 4G and 3G equipment,” Lum said. “You are going to see the deployment of Massive MIMO antennas, which are not going to fit on a small cell.”

MIMO antennas operating in the 3.5 GHz band attached to macrocells can provide 5G coverage and put off the need for small cells.

“With Massive MIMO, you have multiple beams, each one is the equivalent of a small cell,” Lum said. “If you can put off building eight small cells, how much money do you save? At $100,000 per small cell, that’s $800,000 you have saved with a single MIMO that costs $35,000. That is a pretty good return on investment.”

Regulatory Uncertainty May be Affecting Small Cells

Their may be other factors affecting small cell rollout, such as regulatory uncertainty. The FCC’s small cell streamlining order is currently being scrutinized by the U.S. Court of Appeals Ninth Circuit. Congress is looking into whether the FCC colluded with the carriers, in an attempt to steer the judicial review of the FCC’s small cell order away from the Ninth Circuit, which is known for pro-municipal judgements. And 21 states have passed laws forcing localities to be in compliance rules streamlining small cell deployments.

“We are in a strange 90-day window,” Scott Longhurst, government relations manager, Crown Castle International. “Even though the small cell order was adopted Jan. 15, local jurisdictions have until April 15 to adopt their own aesthetics standards.”

Regulatory uncertainty is affecting carriers in mostly the secondary and tertiary markets, while major markets, such as New York, Los Angeles, Chicago, Boston, Miami – they are “building out pretty vigorously,” according to Longhurst. Crown Castle is currently building out 5,000 small cell nodes in Los Angeles, alone, for T-Mobile.

“In the largest markets, small cells are a coverage play, filling in around the macro antennas,” Longhurst said. “As chipsets are placed in the new handsets, the pressure will build for the carriers to deploy small cells.”

Even though the FCC adopted rules that limited fees, tower companies are still seeing municipal fees that are all over the map.

Questions about what fees are acceptable “might be a part of why you are seeing a bit of a slowdown right now is both sides, cities and carriers and tower companies are trying to figure this out,” Longhurst said.

Wireless has been the only use of the right of way that is regulated by planning departments of the local jurisdictions. Longhurst is confident that the courts will uphold the FCC’s effort to change that.

“The intent of the FCC in its small cell streamlining order was to force the local jurisdictions out of the discretionary permit process in the right of way. So wireless will be treated like any other utility in the right of way,” Longhurst said. “So, from that standpoint, the FCC order has a good chance of being upheld.”

Longhurst is beginning to see a change in heart at the associations representing the cities, because of the importance of 5G to the growth of cities in the future. “I think they are going to come around. They are not going to want their constituents coming back at them someday asking why their city got bypassed by the 5G revolution.”

The industry is still learning basic issues surrounding the physical deployment of small cells, according to Longhurst. For example, they have found that the integrated millimeter antennas cannot be placed behind a shroud. Because of the RF propagation characteristics of high-band, the waves reflect off of the shroud.

“We have been working with the cities for a year and a half on designs to conceal this equipment,” Longhurst said. Now we have to go back to them and tell them a square must be cut out of the shroud so the 5G radio and transmit and receive signals.”