X

Connect (X)

Tag Archives: Jeff Johnston

Smaller Cable Operators Eye Mobile Virtual Network Operator Service Opportunity

Mobile Virtual Network Operator (MVNO) Service for Smaller Cable Operators

A cooperative bank that serves industries in rural areas, CoBank, has issued a report that identifies some factors for smaller cable telecommunications operators to consider when deciding whether to offer mobile virtual network operator wireless service. The report, “Is Now the Time for Smaller Cable Operators to Enter the Wireless Market?” finds that the answers is, “It depends.”

Jeff Johnston, lead communications economist with CoBank.

“Smaller cable operators have been watching from the sidelines, but now could be time for some of them to go wireless given their vulnerability to fixed wireless competition,” said Jeff Johnston, lead communications economist with CoBank. “However, launching a wireless service is no small task, and smaller cable operators should consider several factors, including the competitive landscape and how to lower wholesale costs and address scale.”

National wireless operators including Verizon and T-Mobile are setting their sights on the home broadband market, aiming to take market share from incumbent cable providers, a statement from CoBank reads. It said that advances in wireless technologies and the flood of newly available spectrum are enabling national providers to enter the broadband market with a mobile virtual network operator solution.

“Large cable companies such as Comcast and Charter have prepared for the pending threat by launching mobile virtual network operator businesses in recent years,” the statement reads. “For smaller cable companies operating in mid-tier markets, entering the wireless market now before competitive FWA alternatives arrive may be a prudent strategy.”

The fixed wireless access threat to the cable providers is still in its infancy, according to CoBank, but large operators are not taking any chances. Altice USA, Charter and Comcast have each launched their own wireless smartphone services, which they bundle with their cable broadband services, the statement reads. The strategy is primarily intended to prevent their broadband customers from switching to a FWA service, the bank said, but it also is a response to evolving video consumption trends, as more consumers want to seamlessly consume video in and out of the home.

“Results to date indicate the cable giants’ multiple system operator (MSO) strategy is paying off,” the statement reads. “Over the last 12 months, cable operators’ wireless sales represented approximately 30 percent of the total wireless industry phone net additions. In recent months, each of the cable MSOs reached major milestones in growth, revenue or churn rate improvements.”

Whether smaller cable operators should follow the path of the larger companies and enter the wireless market with an MVNO strategy is dependent on several factors, according to CoBank. It said that key factors are the competitive environment, the ability to scale and technical capabilities.

In CoBank’s view, for most small rural operators, it is unlikely that a postpaid MVNO makes sense. The issue in rural America is more about connecting people with at least one operator, and less about a vibrant and competitive market that warrants defensive moves by the incumbents, the bank said.

Nevertheless, CoBank said that for some larger regional operators, the decision is more complex. It said that cable operators in tier two and three markets are particularly vulnerable to the threat of FWA network overbuilds. National wireless operators tend to have excess network capacity in these markets, the statement from the bank reads. Not surprising, the bank said, this is where they are deploying FWA networks to grow their business.

“Launching an MVNO is a major undertaking and many factors come into play,” the statement from CoBank reads. “Lack of scale for smaller operators is an issue which can lead to an unsustainable cost structure. Prospective MVNOs need creative business models to manage costs and generate new sources of revenue.”

CoBank said that smaller cable operators should explore a creative strategy that includes a buying consortium to reduce MVNO network costs and building Citizens Broadband Radio Service (CBRS) networks to generate wholesale revenue. It said other important factors to consider include cell site and network handoffs, handset testing and certification, and overall network operations.

Resource:

“Is Now the Time for Smaller Cable Operators to Enter the Wireless Market?”

Rural Telecom: CBRS for Network-building, Federal Money for Funding

By Don Bishop

Bill Baker (left), CEO of Nextlink Internet, and Jeff Johnston, lead economist for communications at CoBank.

Providing fixed wireless access and fiber-to-the-home telecommunications service in rural Texas, Oklahoma, Kansas, Nebraska, Iowa and Illinois makes Nextlink Internet what its CEO, Bill Baker, calls a hybrid provider. Baker spoke during an AGL Virtual Summit in June at the session, “Rural Coverage Opportunities and Challenges,” moderated by Jeff Johnston, a lead economist for communications at CoBank, a national cooperative bank that provides credit to the U.S. rural economy.

Johnston asked Baker whether service offered through Citizens Broadband Radio Service (CBRS), through private networks or roaming agreements, would help to defray some costs associated with building networks in high-cost areas.

Baker said that although CBRS has potential, operators using CBRS cannot accomplish the higher-use features of CBRS with what he referred to as non-carrier-grade equipment.

“In doing things like being a roaming service on the wholesale side doing private networks, you can scrape off a lot of the mom-and-pop operators,” Baker said. “They’re not going to have the sophistication or the capital, or have the kind of gear that’s capable and doing those things, when you talk about private networks.”

Oil companies in West Texas, the Dakotas and parts of Oklahoma bought many CBRS Private Access Licenses (PALs) just to have their own dedicated spectrum in the oil shale field for monitoring services on their equipment, rather than using unlicensed 5 GHz equipment, Baker said. He explained that CBRS has corporate and industrial uses, and it will depend on who wants to get into the roaming and the private network aspect. “We use carrier-grade gear, so that’s something we are looking at,” he said.

With CBRS, it is easier to achieve a roaming outcome than a private network, Baker said, because a private network might be extremely localized with a corporate partner or perhaps a municipality that wants to use it across their offices and a county area. The dynamics differ, he said, adding that Nextlink Internet is one of the largest CBRS frequency owners in the United States with a dominant footprint in the central United States.

“We believe that CBRS is an unbelievable tool in the toolkit when it comes to rural fixed wireless where you can have effectively licensed 100 by 20 service capable of penetrating tree canopy,” he said, referring to internet speeds of 100 Mbps download and 20 Mbps upload. “There’s a lot of different speed requirements bandied out there in various federal, state and local programs, but probably the most common is the 100 by 20 speed tier. That’s the required speed tier if you’re going to get Rural Digital Opportunity Fund (RDOF) funding on a broadband project, for instance.” RDOF is an FCC initiative designed to inject billions of dollars into the construction and operation of rural broadband networks.

“That’s where we see CBRS playing an important role,” Baker said, “especially getting away from some of the challenges of 5 GHz unlicensed operation in rural markets.”

Johnston said he hadn’t realized that it was such a leap for a smaller wireless internet service provider (WISP) that had been deploying unlicensed 5 GHz over Wi-Fi to change to a CBRS carrier-grade type of network implementation.

“Oh yeah, just the technical operational aspects, forget about the capital,” Baker said. “If you take one of the most common 5 GHz fixed wireless gear setups that most small WISPs use, to equip a tower is going to cost you $1,000 versus the likely price that same tower would be if you’re a non-volume buyer of CBRS carrier-grade equipment from one of the big boys — Nokia, Ericsson, Samsung — you’re talking about north of $50,000 to equip that tower. That’s not even remotely comparable. If you’re buying at scale, you can get that price down. But it’s still radically more expensive to operate CBRS than it is 5 GHz.”

Baker said that a typical list of WISPs will continue to operate at 5 GHz, and perhaps they will deploy some lower-end CBRS equipment. He said that 6 GHz availability probably will come out in 2022, and that 6 GHz would fundamentally replace the 5 GHz gear. “You’ll see a massive forklift in rural America, from the 5 GHz operators as they move to 6 GHz,” he said.

Elaborating on the subject of government-provided funding for rural broadband connectivity, Baker said, “All of these funds are a wonderful idea. However, the devil is in the details. Who decides how the funds are used and which underserved communities get the benefit?’

Baker said that Nextlink Internet is a Connect America Fund (CAF) Phase 2 grant recipient and a provisional Rural Digital Opportunity Fund grant recipient, a likely state recipient and almost certainly a county recipient of Appalachian Regional Commission (ARC) funds.

“There are so many programs flowing right now, and each program, whether it’s federal, state or local, has its own methodology determining what’s unserved, underserved, how they want, what do they want to see it served with,” Baker said. “It is really all over the board right now.”

Some programs do not want to stack, Baker said, for instance, state or county money on a federally funded project area. “Conversely, some programs want to stack money on top of a federal area and make that federal recipient — you may have a six-year deployment obligation — to do it in 18 months instead,” he said. “They’re paying that guy to go fast.”

Many factors affect what projects receive funding and how the projects are funded, Baker said. “Everyone’s focused on the White House infrastructure bill, but right now, between the state funds to ARC funds to RDOF funds, you can’t help but be getting better internet, if you’re out in a rural area.”

For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.

Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.

_______________

Don Bishop is executive editor and associate publisher of AGL Magazine.

Rural Telecom: Fiber for Futureproofing, Microwave for Backhaul

By Don Bishop

Bill Baker (left), CEO of Nextlink Internet, and Jeff Johnston, lead economist for communications at CoBank.

Providing fixed wireless access and fiber-to-the-home telecommunications service in rural Texas, Oklahoma, Kansas, Nebraska, Iowa and Illinois makes Nextlink Internet what its CEO, Bill Baker, calls a hybrid provider. Baker spoke during an AGL Virtual Summit in June at the session, “Rural Coverage Opportunities and Challenges,” moderated by Jeff Johnston, a lead economist for communications at CoBank, a national cooperative bank that provides credit to the U.S. rural economy.

Johnston asked Baker what steps NextLink Internet takes to futureproof its telecommunications networks in the face of ever-increasing throughput speeds required by advances in applications and connected devices.

“It’s interesting in the usage patterns design, because I have gig fiber customers; I have gig wireless customers; I have 25-meg fixed wireless customers,” Baker said, referring to internet download speeds of 1 Gbps and 25 Mbps. “There’s no radical difference in use between a gig customer and a 25-meg customer. To me, what futureproofing means is bringing the fiber as close as possible to that last-mile connection.”

Baker explained that in highly rural markets, customers might be 30 to 75 miles away from the nearest fiber access point. He said that at such distances, latency becomes problematic for customers. Improvements in technology, even on the wireless side and the wireless backhaul side, have been massive in the past five years, he said. “It’s the old adage: double the capacity at half the price. That’s what you’re seeing in the wireless backhaul market,” Baker said.

“Ultimately, you’ll slowly get there, but I deal with highly rural areas, and the concept of getting fiber to the home — unless the federal government wants to throw hundreds and hundreds of billions of dollars for fiber to the home for every location — we’re just nowhere close to that kind of futureproof state. In an urban environment, houses may sit 50 to 100 feet from the road. In a rural environment, houses may sit 1,000 to 2,000 feet from the road. Even taking fiber from the highway, the farm-to-market road, to the farmhouse is a project unto itself. We don’t see futureproofing in that regard happening for quite a while.”

Backhaul

Johnston asked whether telecommunications service from low-Earth orbit (LEO) satellites has potential for wireless backhaul service.

“We’re tracking LEO,” Barker said. “I’ve never considered LEO to be a backhaul provider. I don’t believe there’s the capacity in the network for that. I have close to 2,000 towers in the central United States; thus, we’re intimately familiar with microwave backhaul. I have microwave backhaul links carrying up to 2.5 Gbps up to 15 miles. To us, microwave backhauls are the Swiss Army knife.”

Baker said that if backhaul demand begins to exceed installed capacity, Nextlink Internet could double up the radios or obtain newer models. “We have a huge presence in North Texas,” he said. “I can’t think of a more booming rural area than that. We have licensed microwave backhauls ranging from 300 Mbps to 2.5 Gbps. That’s where you get into the short-range millimeter-wave of 10 GHz hops.”

Nextlink Internet is a firm believer in using every available tool, Baker said, because not only can a microwave link go down, but also a fiber site can go down. “The magical backhoe always seems to find that fiber, no matter where it’s buried in a rural area,” he said. “When you’re not only moving traffic, but also building a network that’s redundant, it needs to be able to carry traffic in different directions.”

For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.

Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.

______________

Don Bishop is executive editor and associate publisher of AGL Magazine.

Public Funding Opens Opportunity for Wireless Internet Service Providers

By Don Bishop

With federal and state government initiatives to extend and improve rural broadband telecommunications service comes funding from the Connect America Fund, the Rural Digital Opportunity Fund, the Appalachian Regional Commission and a federal infrastructure bill. According to Jeff Johnston, a lead economist for communications at CoBank, a national cooperative bank that provides credit to the U.S. rural economy, the Biden Administration wants to prioritize nonprofits, local governments and cooperatives to receive funds from the infrastructure bill. Johnston served as the moderator for the session, “Rural Coverage Opportunities and Challenges,” during an AGL Virtual Summit in June.

Lori Sherwood (left), director of commercial and market development at Render Networks, and Jeff Johnston, lead economist for communications at CoBank.

Johnston asked Lori Sherwood how wireless internet service providers (WISPs), rural cable operators and rural local exchange carriers could play a role in partnering with nontraditional operators, with the assumption that they may not have the necessary engineering and operations experience to build and manage some of the rural broadband networks — presuming that eventually they would receive government money. Sherwood is director of commercial and market development at Render Networks. Render Networks streamlines large-scale network construction for network operators, ISPs and construction teams by using a geographic information system, mobile and automation technologies

“Many local governments and cooperatives are willing to invest in the infrastructure but don’t want to be an ISP,” Sherwood said. “Thus, there’s a huge opportunity for WISPs, for operators and others to step in and expand their customer base without having to invest 100 percent of the infrastructure cost.”

Recalling a project on which she worked a few years ago, Sherwood said a Texas community built the infrastructure and found a WISP already doing business in the community that wanted to expand into fiber. The WISP partnered with the community to become the ISP for its last-mile network, she said.

“The hardest part is finding the opportunities and forging the partnerships,” Sherwood said. “Many times, I hear from providers that they would love to partner with such a community, but they can’t seem to get any  traction because the procurement processes are too tedious. My advice for anybody seeking partnerships is to be persistent and dialogue.”

Take a step back and say to community leaders that technology can be your best friend in helping to reduce some of the costs, she advised. Starting with the geospatial design, and using cloud capabilities and technology is, according to Sherwood, the best way to evolve modern networks to modern architectures and help them to be sustainable.

“Sustainability is what we’re after long-term, not just what is the best technology or rolling out the infrastructure,” Sherwood said. “We need to examine how we partner to build these networks, and use the right tools to help defray some of the costs and make sure that these projects are successful.”

Johnston asked Sherwood for her thoughts about using point-to-point microwave backhaul versus fiber in remote parts of rural America. “What should consider with these two types of implementations?” He asked. “To what extent do you think low-Earth orbit (LEO) satellite networks could be a viable solution for providing backhaul in these more remote, high-cost areas in rural America?”

Microwave has a role in remote areas, Sherwood said. “You walk into some communities, and they say, ‘We’ve had this public safety point-to-point microwave link for 10 years that has served us well; it’s great.’ When you’re anticipating backhaul, the middle- mile infrastructure is one of the biggest challenges to bringing last-mile infrastructure. In a lot of these rural communities, it doesn’t exist.”

Questions to ask, Sherwood said, when considering backhaul, include: “What is the growth plan for this particular location now? Are you planning on building towers or other infrastructure, in the coming years? Is there going to be a proliferation in housing?”

Sherwood said that if the answer is yes, then microwave might not be the solution that you want to invest in, long-term. She said the last thing to do is to invest in technology that would not suit your needs in five years.

“If you’re going to be investing in something, you might as well invest for the future,” she said. “It doesn’t help you to build for speeds today, because you can have a pandemic, and everybody will be sent to work from home for a while.”

Sherwood said she is skeptical about using LEOs for backhaul.

“It’s flashy,” she said. “It’s the shiny bright object in the sky, literally. But on the residential side, I’ve talked with community folks before who spent $300 a month for connections to a copper line, a fixed wireless and a satellite, just in the hopes that any one of them works at any given time. It’s not practical in some areas, particularly in western Oregon or Vermont where you have geographical features and challenges. The best long-term solution is fiber.”

For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.

Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.

______________

Don Bishop is executive editor and associate publisher of AGL Magazine.

Availability, Affordability Factor Into Rural Broadband Telecommunications Network Deployment

By Don Bishop

Futureproofing rural broadband telecommunications networks depends on the extent to which fiber-optic connectivity can be extended to every user, according to John Nettles, president of Pine Belt Communications. Nettles spoke during an AGL Virtual Summit in June at the session, “Rural Coverage Opportunities and Challenges,” moderated by Jeff Johnston, a lead economist for communications at CoBank, a national cooperative bank that provides credit to the U.S. rural economy.

John Nettles (left), president of Pine Belt Communications, and Jeff Johnston, lead economist for communications at CoBank.

“We would all be kidding ourselves if any of us were to say that we knew exactly what futureproof really means,” Nettles said. “If I could tell you what the needs are going to be five to 10 years out, I would be a rich man, instead of sitting here in Arlington, Alabama, dodging the thunderstorm that’s right outside my window.”

Nettles said that, generally, as the word is used today in telecommunications, futureproofing refers to fiber. He said that is not to say that wireless networks are going away or would be deemed irrelevant. “Hardly not.” He said. “Nor is there a single answer to the question of what throughput needs ultimately will be.”

In Nettles view, throughput tends to be seen as what an individual or a family needs for a pleasant user experience. The needs of the pandemic aside, he said, often throughput is viewed in the context of entertainment, in contrast with what trade publications promote.

“It seems like we’re on the verge of meaningful advances, including remotely performing life-saving procedures closer to where individuals reside, through robotics,” Nettles said. “To do that with functional equivalents of being there would require rapid processing of data and virtually no latency of each packet in both directions. Higher and higher throughput requirements are going to be there.”

Einstein’s theory of relativity says nothing goes faster than the speed of light in a vacuum, Nettles said, and it is logical to conclude that pushing fiber optics as deep as possible into the network is going to be a fundamental, proper requirement, if there is any hope of achieving the ultimate goal of everything for everybody everywhere. He said it also is obvious that wireless networks will hold a place in the telecom ecosystem for as long as humans remain mobile creatures.

“I can’t get up and drag my fiber with me to the next room, to the next building or to the next town,” Nettles said. “It’s going to have to be a balance between it all; there’s going to be a place for it all.”

Johnston asked to what extent national operators could have a meaningful effect on serving underserved and unserved areas. He noted that T-Mobile has been talking about a massive expansion of rural coverage. He said that part of that expansion stems from the conditions to which T-Mobile agreed when it acquired Sprint — they had to roll out a certain amount of coverage in rural America.

“I’m a firm believer that local problems are best solved when local groups come together to overcome the issue,” Nettles said. “My dad, who was the founder of the company, had a saying that absentee ownership was one of the death knells in a small operation, especially a rural operator.”

Nevertheless, Nettles said that with respect to capabilities, the big national operators make a difference. Even so, he said, they have to be concerned with investor returns.

“It doesn’t matter whether you’re a nonprofit, a co-op or a government entity, you have to cover your costs and to set a little for the rainy day fund so that you can maintain the network,” Nettles said. “If it’s going to require public-private partnerships, whether it comes in the form of the old days when, before we had walked away from the notion of a fair rate of return for an operator and a natural monopoly type environment or . . . .”

The problem exists today because of the digital divide, especially for rural America, because the returns have not been sufficient to justify the investment,” Nettles said. “There has to be something else to make it work. It’s not all one or the other. We have to continue to look for that balance point and make the best out of it.”

Among sources of public funds for rural broadband telecommunications networks are the Connect America Fund, the Rural Digital Opportunity Fund and Appalachian Regional Commission funds. Nettles cited an addition source, the FCC’s Emergency Broadband Benefit program, which he said is starting as a temporary program, “but there’s a lot of talk that it could become a permanent program,” he said. “It’s not only the availability, but also the affordability question that needs to be in the forefront of all our plans and activities.”

For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.

Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.

_______________

Don Bishop is executive editor and associate publisher of AGL Magazine.