ChannelVision Magazine

Mobile & Wireless In written testimony presented to the U.S. House of Representatives Subcommittee on Communications and Technology last month, Claude Aiken, president and CEO of the Wireless Internet Service Providers Association (WISPA) explained how the economics of broadband fixed wireless are better than those for fiber-to-the-premises (FTTP). In turn, Aiken urged subcommittee members to support spectrum policy that was favorable to rural WISPs, arguing that WISP-friendly policy could help mini- mize the need for government subsi- dies to support broadband buildout. “WISPs boldly go where other technologies and companies do not go,” said Aiken’s testimony. According to WISPA’s latest mem- ber survey, more than 75 percent of its operator members serve primarily rural areas and have fewer than 2,000 customers. More than half serve fewer than 1,000 customers. Significantly, almost all members have fewer than 25 employees, and almost 70 percent have 10 or fewer full-time employees. “These are truly small, entrepreneur- ial companies with a local, rural, and small-town focus,” said Aiken. Aiken presented findings from a 2017 report by the Carmel Group, showing how WISPs can deploy fixed wireless service to residential con- sumers at about one-seventh the cost of FTTP and about one-fourth of the cost of cable. “These favorable economics en- able WISPs to serve smaller and more remote communities where it is not cost-effective for wireline technologies to be deployed,” said the testimony. He also put forth a case study from one member with operations in rural Illinois and Missouri that estimated the cost of fiber deployment to 100 custom- ers to be about $928,600. Based on an average customer service fee of $69 per month, it would take 11 years for a fiber deployment to deliver a return on investment. However, in the same area, to deliver broadband via fixed wireless technology, the member’s cost to de- ploy to 100 customers is approximately $37,500 – an almost $900,000 savings – and at an average service fee of $39 per month for speeds up to 150 Mbps, they are in the black in just 10 months. “The economics for both the provid- er and the consumer make much bet- ter sense,” argued Aiken’s testimony. A key concern for WISPA and its member is the ability to obtain li- censed spectrum. This ability could hinge largely on decisions by the Federal Communications Commission on two key upcoming auctions – the auction of Citizens Broadband Radio Service (CBRS) band spectrum at 3550-3700 MHz and the C-band auc- tion of adjacent spectrum in the 3700- 4200 MHz band. WISPA advocates small license areas for the CBRS auction, but large nationwide providers want to limit the auction to large license areas. Within the C-band auction, WISPA is pushing for a portion of the total spectrum to be reserved specifically for broadband fixed wireless use. WISPA President Testifies to Fixed Wireless Economics Residential Consumer Broadband Comparative Economics Fiber Cable Satellite Mobile BWA Capex/sub relative to BWA1 70 45 10.52 21 10 Speed3 1 Gbps 150 Mbps 12-35 Mbps4 10-12 Mbps 100 Mbps Upgrade costs MODEST Only fiber remains same HIGH Complete CPE & network change LOW/HIGH Incremental upgrades until satellite fails HIGH Complete device & network change MODEST Incremental upgrades in CPE and network Broadband ARPU $69 $42 $61 $59 $51 Payback period 60 months 38 months 12 months 21 months 11.5 months (1) This is a relative presentation comparing all of the technologies to BWA, which is set to an index value of 10. See above for explanation. (2) Does not include the cost of satellites. (3) Max speeds; most service providers are not yet offering max speed. For cable, the DOCSIS 3.0 standard is capable of 1 Gbps. For BWA, point-to-point links and millimeter-wave, point-to-multipoint connections can provide more than 1 Gbps to end users. (4) Anticipated typical speed. Sources: Wisper ISP; National Rural Telecommunications Cooperative; The Carmel Group Channel Vision | July - August, 2018 28

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