Fixed Wireless Broadband Could Help Reach More Rural Consumers

Fixed wireless service is becoming a viable option for the provision of residential and even small business broadband, particularly in rural areas where consumers have few broadband choices. Recent studies predict rapid growth of fixed wireless broadband as a technology that has the potential to reach more areas that are not presently being reached by other modes of Internet access.

But that growth requires that more licensed spectrum be made available for fixed wireless use.  The FCC’s recent actions to allocate additional licensed spectrum will help fixed wireless providers expand deployment throughout rural America. But continued efforts by Congress and the FCC to allocate spectrum are necessary in order to meet FCC Chairman Ajit Pai’s goal of closing the rural-urban digital divide.

Fixed wireless providers, sometimes referred to as wireless Internet service providers, deliver broadband access to consumers at fixed locations through wireless transmitters on towers interconnected by unlicensed or licensed spectrum. Like mobile wireless, these towers are connected to fiber backhaul networks. Consumers generally receive access at their locations through a Wi-Fi router, creating a fixed connection with download speeds up to 100 Mbps.

A recent report by the Carmel Group titled “Ready for Takeoff: Broadband Wireless Access Providers Prepare to Soar with Fixed Wireless” forecasts robust growth for the U.S. fixed wireless broadband market. The number of subscribers is projected to increase from just over 4 million in 2016 to 8 million by 2021. Additionally, market revenue is projected to increase from $2.3 billion in 2016 to $5.2 billion in 2021. The Carmel report also suggests that fixed wireless services are the most cost-effective solution for deploying broadband in rural areas.

One advantage of deploying fixed wireless over other broadband technologies is its relatively low fixed costs. Fiber and cable networks require a lot of capital for deployment in residential areas. For residents in areas with low population densities, these capital costs may be sufficiently high to deter deployment, which is why these areas often have limited choices for wireline broadband access. But for many of these rural residents, fixed wireless broadband may be a sufficient low-cost solution to a high-cost problem. Compared to other broadband technologies, fixed wireless providers pay back their investments more than twice as fast and they spend the least amount of capital per subscriber, while still offering download speeds competitive with other modes of broadband.

One important disadvantage of fixed wireless is that its use of unlicensed spectrum can make connections unreliable due to congestion. In order for fixed wireless providers to market themselves as reliable residential or business broadband providers, they will need to acquire more licensed spectrum.

The implementation of 5G wireless technology will advance the capabilities of fixed wireless networks. An August 2017 report from SNS Research entitled “5G for FWA (Fixed Wireless Access): 2017 – 2030 – Opportunities, Challenges, Strategies & Forecasts” predicted early commercial rollouts from AT&T and Verizon would drive fixed wireless 5G revenue to $1 billion by the end of 2019. SNS Research indicated the fixed wireless 5G market will grow at a compound annual growth rate of 84% from 2019 to 2025, with service revenue increasing to more than $40 billion by the end of 2025. But before the marketplace can take off, the federal government must continue to allocate spectrum to facilitate broadband deployment.

To their credit, the current FCC and the 115^th Congress have introduced a number of bills and proposals which would implement pro-consumer spectrum initiatives. In a September 2017 Perspectives from FSF Scholars, FSF Visiting Fellow Gregory Vogt discussed these initiatives in detail. The Senate’s bipartisan passage of the MOBILE NOW Act is a step towards advancing the reallocation and assignment of licensed spectrum for wireless (fixed and mobile) broadband use. Moreover, the Senate’s introduction of the AIRWAVES Act would identify specific mid- and high-band spectrum and establish deadlines for reallocations and auctioning of these spectrum bands.

Also, the FCC recently adopted a Notice of Proposed Rulemaking to promote investment in the 3.5 GHz band, which is one of the more common frequency bands used by fixed broadband providers. If adopted, this proposal would create longer license terms, license renewability, and larger geographic license areas – all of which would help accelerate the deployment of fixed wireless. In November 2017, the Commission adopted a Second Report and Order to allocate an additional 1700 megahertz of high band spectrum for flexible wireless use. Specifically, the Order preserves the 70 and 80 GHz bands for traditional and innovative fixed wireless uses, which will be explored in an upcoming proceeding.

As technology continues to improve, fixed wireless is becoming a viable option for residential or small business broadband access. For many rural Americans, fixed wireless is already more than sufficient. As 5G becomes the new norm for wireless services, additional licensed spectrum could enable fixed wireless to become even more competitive as a next-generation broadband alternative, while helping to close the rural-urban digital divide.