Shared Spectrum Market Opportunity for Cable MSOs...Shared Spectrum Market Opportunity for Cable...

SharedSpectrumMarketOpportunityforCableMSOs

Preparedby

MarkLowensteinManagingDirector,MobileEcosystem

September2017

[email protected]@marklowenstein

©MobileEcosystem,2017 -1-

ExecutiveSummaryCableMSOshaveanewanduniqueopportunitytoenhancetheirnetworksandgeneratenewrevenuestreams.It’scalledspectrumsharing.In2016,theFCCreleaseditsSecondReportandOrdertocreatetheCitizensBroadbandRadioService(CBRS)inthe3550-3700MHzband,makingavailable150MHzofspectrumformobilebroadbandandothercommercialusers.The3.5GHzbandhashistoricallybeenusedbytheDepartmentofDefenseandfixedsatelliteserviceproviders.The3.5GHzbandrepresentsthefirstiterationofanambitiousspectrumsharingframework,whichtheFCCplanstoextendtootherbandsoverthenextseveralyears.3.5GHz-basedserviceswillbeprimarilyunlicensedor‘lightlylicensed’services,inthataCableMulti-ServiceOperator(MSO)willnotberequiredtobuyandpermanentlyownspectrum.Rather,thebandwillrelyonauniqueandinnovativesharedspectrumscheme.ThisallowsMSOstoaddLTEserviceswithoutthecostlyburdenofhavingtopurchasespectruminexpensiveFCCauctions.MSOscanenhancetheirindoorandoutdoorWi-FinetworkswithLTE,providingimprovedserviceforbusinessesandconsumers,plusthepotentialfornewrevenueopportunities.SpectrumsharinghastheadvantageofprovidingcoverageandcapacityaugmentationusingLTE,butemployingaWi-Filikebusinessframeworkandeconomicmodel.CableMSOshaveinvestedheavilyinrecentyearstoextendtheirbroadbandnetworks,bydeployingseveralhundredthousandaccesspoints(APs),undertheCableWi-Fibrand,andequippingmillionsofhouseholdAPswithdualSSIDs.Thepurposeistooffertheirresidentialandbusinesscustomersanextensionoftheirbroadbandservicebeyondthehomeoroffice;provideanalternativetoexpensivecellulardataplans;andlaythefoundationtopotentiallyofferinga‘Wi-Fi-centric’cellularservice.However,Wi-Fihasitslimits.DeployingsufficientdensityofAPsisexpensive.AndWi-Fi,asanunlicensedserviceusinglimitedchannelbandwidth,suffersfromlimitedcapacityandqualityofservicechallenges.SomecableMSOs,suchasComcast,havealsoenteredthewirelessbusinessthroughMVNOarrangements.Inthesesituations,theyareatthewhimofhostcellularprovidercontractsandwholesalepricing.SpectrumsharingcouldbeaviablenewmodelforcableMSOstocomplementtheirbroadbandandWi-Fibusiness,andevenMVNOarrangementwiththewide-area,capacity-rich,andQOSbenefitsofLTE.Itcanbeseenas“Wi-FiwithLTE”.Webelievespectrumsharingopportunitiessuchasthoseenabledbythe3.5GHzplanoffersMSOsthefollowingpotentialbenefits:• Lowerbarriertoofferingwirelessservices.Historically,theonlywayanMSOcouldofferwirelessserviceshasbeenthroughexpensivespectrumauctionsordoingan


MVNOdealwithawirelessoperator.Spectrumsharingrepresentsafaster,moreflexible,andmoreeconomicallyviablealternative.

• ComplementtoBroadbandandWi-Fi.MSOscancosteffectivelyaddLTEtotheirmillionsofinstalledAPs,offeringcoverageextensionandcapacityaugmentation.Thiscanbetranslatedintohigherqualityofserviceforexistingcustomers,orpotentiallyincrementalB2CandB2Brevenueopportunitiesthroughapremiumserviceoffering.

• CellularOffloadService.CableMSOshavereliedonexpensive“carrierWi-Fi”deploymentstoofferacellularoffloadservice.Sharedspectrumpresentsacost-effective,highercapacityalternative.

• PremiumEnterpriseServices.Offeringbroadband/Wi-Fiservicestoenterpriseshasbeenafast-growingbusinessforMSOs.ThecapacityandcoverageaugmentationcapabilitiesofferedbysharedspectrumcanbeusedbyMSOstoofferapremiumin-buildingservicetocustomers.

• WirelessMVNO.SharedspectrummakesthewirelessMVNObusinesscaseeminentlymoreviable,reducingcostanddependencyonthehostMVNO.AhybridmobilenetworkcombiningWi-Fi,sharedspectrum,anMVNOrelationship,andownedspectrumassetscouldbeacompellingopportunityforanMSO.

InadditiontobeinganimportantelementofanMSO’snetworkcapacityaugmentationanddensificationstrategy,webelievespectrumsharingoffersthepotentialforanentirelynewnetworkframework,basedontheideaof‘networkasaservice’.Networkcapacityorcoverageisacquiredonanas-neededbasis,similartocloud-basedservicesweareseeingacrossthebusinesslandscape.Thisisconsistentwiththeevolutiontowardvirtualized,software-definednetworkservices.WebelievethiscouldresultinpotentiallydramaticsavingsinCapEx.Spectrumsharinghasbroadregulatoryandindustrysupport.It’salynchpinoftheFCC’sefforttoreleasesubstantiallymorespectrumformobilebroadband,whilealsoencouragingasharedspectrumapproach.Allofthemajorradioequipmentvendorshavecommittedtomakingequipmentavailablefor3.5GHz,andweareencouragedbywhatwe’veseenfromthebroaderecosystem,suchasdeviceOEMs.InAugust2016,sixwirelesstechnologyleaders—AccessTechnologies(Alphabet),FederatedWireless,Intel,Nokia,QualcommandRuckusWireless(nowpartofArris)—announcedthelaunchoftheCBRSAlliance,topromoteLTE-basedsolutionsutilizingthesharedspectrumoftheU.S.3.5GHzband.TheAlliancenowboastssome70members.Webelievespectrumsharingisagame-changingapproachtosolvingnetworkcoverageandcapacitychallenges,providingMSOswithrevenueenhancement,costsavings,andcompetitiveadvantageopportunitiesinthecomingyears.ThisWhitePaperwilldiscussopportunitiesinspectrumsharing,withafocuson3.5GHz-relatedopportunitiesforcableMSOs.Webeginwithanoverviewofhowthe3.5GHzspectrumsharingstructurewillwork,andthetimelineformarketreadiness.Thebulkof


thisreportisfocusedontheadvantagesofspectrumsharing,usecases,thebusiness/economicframework,andourrecommendationsforasuccessfulgo-to-market.1. BriefOverviewofthe3.5GHzBandThe3.5GHzbandhashistoricallybeenusedbytheDepartmentofDefenseandfixedsatelliteserviceproviders.Therehasbeenamovementoverthepastseveralyearstoopenupthebandandmakeitavailableforsharedusebetweengovernmentandcommercialinterests,providedtheincumbentsaregiventheproperprotection.OnApril28,2016,theFCCreleaseditsSecondReportandOrdertocreatetheCitizensBroadbandRadioService(CBRS)inthe3550-3700MHzband,makingavailable150MHzofspectrumformobilebroadbandandothercommercialusers.The3.5GHzbandwillbeprimarilyunlicensedor‘lightlylicensed’,inthatanorganizationwillnotberequiredtobuyandpermanentlyownspectrum.Rather,theywillrelyonauniqueandinnovativesharedspectrumscheme(moredetailsbelow).SpectrumsharingallowsMSOstoaddLTEtotheirnetworks,eitherthemselvesorthroughanotherentitysuchasamobilenetworkoperator(MNO),enterprise,orsystemsintegrator(orsomecombinationthereof),usinganeutralhostmodel.ThiswouldprovidetheadvantageofcoverageandcapacityaugmentationusingLTE,butemployingaWi-Filikebusinessframeworkandeconomicmodel.TheFCC’sproposalisforathree-tieredaccesssystem,showninthediagrambelow.UsersineachtierwillbeprotectedbyanewandinnovativespectrumsharingstructurecalledtheSpectrumAccessSystem(SAS).


SpectrumAccessSystem(SAS)andEnvironmentalSensingCapability(ESC)ThemostuniqueandinnovativeelementofthespectrumsharingconceptisthedevelopmentoftheSpectrumAccessSystem(SAS).TheSASadministratorswillserveasadvanced,highlyautomatedfrequencycoordinatorsacrosstheband,protectinghighertierusers(i.e.incumbentandPALlayer)frominterferencefromlowertierusers(GAAlayer).Theywillcheck availability of spectrum resources, assign channel(s), provide a certificate, and coordinate and ensure interference-free operation. NotethattheFCCiscurrentlyreviewingpetitionstobothincreasethegeographicareascoveredbyaPALlicensebeyondcensustracts(i.e.maketheareaslarger)andtomakethePALlicensetermslonger.Decisionsontheserequestedchangesareexpectedbytheendof2017.

TherewillalsobeEnvironmentalSensingCapability(ESC)operators.TheESCswillconsistofnetworksofsensorsthatdetectthepresenceofsignalsfromfederalsystemsinthebandandcommunicatethatinformationtooneormoreSASstofacilitateprotectionoffederaloperationsintheband.TheESCswillalsoprotectincumbentuserswithinacertainradius,particularlyaround‘exclusionzones’,whichareprincipallywithin200kmofthecoast.

InDecember2016,theFCCconditionallyapprovedsevenentitiesthathavemettherulestobeSASadministrators:Google,FederatedWireless,Amdocs,Comsearch,CTIA,Keybridge,andSony.InMay2017,additionalapplicationsweresubmittedbyRivadaNetworks,Nokia,FairspectrumandREDTechnologies.WebelieveGoogleandFederatedWirelessarethetwomostseriouscandidatesatthistime.Itisgenerallybelievedtherewillbebetweentwoandfour(2-4)SASs.Overthenextfewmonths,theFCCwillcertifytheapprovedapplicantsthroughtesting,withfullcertificationexpectedinearly2018.AfewoftheorganizationswhosubmittedapplicationstobeaSASadministratorhavealsoappliedtobeESCadministrators,includingGoogleandFederatedWireless.HowSpectrumSharingMightBeUsedTheseserviceswillprimarilyemploysmallcells,orleverageWi-FiAPs,foroutdoorandindoornetworkdensification.Themajordifferenceisthatthesecellscouldsupportmultipleoperators,inawaythatneutralhostdistributedantennasystems(DAS)dotoday.Thecellsneedonlyoneantenna,anddonotneedtocoordinatewiththeoutdoor/macro


networkinthesamewayasatraditionalsmallcelldeployment.Thisovercomeswhathasbeenoneofthemajorinhibitorsoftheindoorsmallcellmarkettodate.TheFCCconstructedthe3.5GHzbandrulessuchthatwhoevercontrolsthevenuecancontrolthespectruminthatbuildingforthatband.Theequipmentbeingdevelopedusesthesameformfactorastoday’sindoorandoutdoorsmallcellsbutatanewfrequencyandwithnewsoftware.TheindoorversionswilllooklikeWi-FiaccesspointsbutwithLTEcapabilities,andsomevendorsaresimplyadding3.5GHzradiostoW-FiAPs.Weexpectthatmuchofthenetworkadministration,control,authentication,andsoon,willbemanagedinthecloud.NotethattheFCChasalsomodifieditsoriginalproposaltocreateanewcategoryofCBRSdevicesthatallowforincreasedoutputpowerof3.5GHzcells,extendingtheirradiustopotentiallyasmuchasonemile.Thismeansthattherearealsooutdoorapplicationsbeingplannedfor3.5GHzservices.Compellingopportunitiesherecouldincludeuniversitycampuses,businesscampuses,andvenuessuchasstadiums.Withthisnewframework,itislikelierthatanenterprise,abuildingowner,orasystemsintegratormightdeployequipment,usinganeutralhostmodel.Theywilldodealswithanyoneofanumberofserviceproviders,eitheratthePALorGAAtier.Privateenterprises,venues,andfixednetworkoperators,forexample,couldautonomouslydeployhigh-qualityin-buildingLTEnetworksintowhichallmobilenetworksubscriberscanroam.Thisbenefitsallnetworkoperators.AnMNOisabletoofferamoreconsistentoverallnetworkexperience,whileimprovingcoverageandcapacityforlesscost.AnMSOisabletocomplementtheirfixednetworkassetswithamobileoption,orcouldevenwholesaletheirservicestoanMNOorotherentity.StatusandTimingSpectrumsharinghasbeengatheringmomentum.MajorinfrastructureOEMsandchipsetmanufacturershaveindicatedsupportforspectrumsharingandthe3.5GHzband,includingcommittingtotimelinesforequipmentsupport.Ayearago,sixwirelesstechnologyleaders—AccessTechnologies(Alphabet),FederatedWireless,Intel,Nokia,QualcommandRuckusWireless(nowpartofArris)—announcedthelaunchoftheCBRSAlliance,topromoteLTE-basedsolutionsutilizingthesharedspectrumoftheU.S.3.5GHzband.TheCBRSAlliancehassinceballoonedto70members.


Exhibit1 UpdateonNetworkandDeviceReadinessfor3.5GHz

Category EquipmentOEMs&

Operators• Verizonleadingfirstend-to-endcarriergradeCBRStrial,partneringwithEricsson,Qualcomm,&FederatedWireless.VerizonhassaidthatallnewVerizonsmallcellswillbeequippedw/CBRScapability.

• Numerousdemonstrationsandtrials:Ericssondemonstrated3.5GHzsmallcellsatMWC2017;Alphabet,NokiaandQualcommcompletedalivetestof3.5GHztechnologyoveraprivate4GnetworkataLasVegasracetrackinFeb.2017.

• FederatedWirelessandAlphabetdemonstratedSAS-SASinteroperabilityinDec.2016.

• FederatedWirelesshasannouncedinteroperabilitywithallkey3.5GHzradiovendors,includingEricsson,Nokia,Ruckus,Samsung,andSpiderCloudWireless.

ChipsetOEMs • Qualcommannouncedsupportfor3.5GHzintheirSnapdragon™X20LTEchipset/modeminFeb.2017

• Intelannouncedsupportfor3.5GHzintheirXMM™7560modeminFeb.2017

IndustryOrganizations • CBRSAlliance.FormedAugust2016byAccessTechnologies(Alphabet),FederatedWireless,Intel,Nokia,QualcommandRuckusWireless(nowpartofArris),nowhasover70members,includingCharter,Comcast,andall4U.S.MobileOperators.Involvedincommercializing3.5GHzthroughcertificationprograms.HasconductedlivetrialsatCBRSevents.

• WirelessInnovationForum(WInnForum).Involvedinsettingstandardsfor3.5GHzbasedontherulessetbytheFCC.HaspublishedRelease1specs.

Therehasalsobeenasignificantamountoftrialactivity.Thisfall,Verizonwillbeleadingthefirstend-to-endcarriergradeCBRStrial,partneringwithEricsson,Qualcomm,&FederatedWireless.VerizonhassaidthatallnewVerizonsmallcellswillbeequippedwithCBRScapability.CharterandAmericanTowerarealsoengagedinCBRSfieldtrials.Webelievethefirstcommercialspectrumsharingservicesofthe3.5GHzbandcouldbelaunchedby2018,initiallyattheGAAlayer.ItislikelythattheMNOswillleadcommercialavailabilityofthemarket.Theprincipalmilestonesthatneedtobereachedare:

• FinalizingrulesfortheSASandselectingthevendors.TheFCCissettingtherulesofhowtheSASswilloperate.TheFCChasconditionallycertifiedsevenvendors,withfinalcertificationexpectedinearly2018.

• Determiningtheauctionprocessandschedulingtheauction.TherewillbeanauctionprocessfortemporaryspectrumatthePALlayer.TheFCChasissuedaframeworkforthisbutstillhastofinalizerulesandannounceaschedule.WeexpectaPALauctionduringthesecondhalfof2018.


• EquipmentAvailability.AsshowninExhibit1,equipmentandchipsetsupporthasfallenintoplace.Thereshouldbedevicesupportbytheendof2017andintoearly2018.

MobileEcosystembelievesMSOsarelikelytodeployspectrumsharingservicesoncea3.5GHzecosystemisinplace.Itislikelythatmobilenetworkoperatorswillleadtheearlydeployments,startingin2018.MNOswillalsoplayanimportantroleinpushingthedeviceecosystem.MSOsshouldbethinkingabouta2018timeframefortheirinitialsharedspectrumservices.2. SpectrumSharingBenefitstoCableMSOsSpectrumsharingservicesallowanMSOtoaddLTEtoitsnetwork,butwitheconomicsmoreakintoWi-Fi.Itislowercost,andeasiertoinstallandmaintainthantraditionalindoorcellularsolutions,andcanprovideacapacityandcoverageaugmentationtoWi-Fi.TheMSOgainstheoptionofmobile/wirelessontopoffixednetworkassets,andcancontrolhowtrafficmovesbetweenfixedandmobilenetworks.Exhibit2 SummaryofKeyBenefitsof3.5GHztoMSOs

Benefit NotesCapacityandCoverage

Augmentation• LTEmakesmoresenseincertainsituationsthanaddingmoreAPs• Wi-Fisuffersfrominterferencechallengesandlimitedcapacity• KeepssubscribersonMSOnetwork

LowerCosts • MightbelessexpensivethanaddingmoreWi-Ficapacity• IfMSOisofferingwirelessservicethroughanMVNO,thisisawayofkeepingtrafficoffthemoreexpensivecellularnetwork

• Onlyhavetousespectrumwhereandwhenneeded• Mightalsomakesensewherehavenotdeployedfixedassets

RevenueEnhancement • Potentialpremiumserviceforconsumersorenterprises• Chargeforcoverage/capacityboost• Keeptraffic“on-net”• Customeracquisitionpotential(3.5GHzadifferentiator)

SubscriberExperience • Moreseamlessexperienceforcustomers

2016 2017 2018

• FCCNPRM• GoogleK.C.trial• Trialsincoastalcities• FinalizerulesforSAS

• FCCconditionalcertificationoffirstSASvendors

• Somenetworkequipmentavail.• Chipsetavailability• DeviceOEMannouncements• Severalfieldtrialsunderway• SchedulePALauction•

• FinalcertificationofSASvendors

• GAofconsumerdevices• SelectGAAmarketlaunches1H,broaderlaunch2H

• PALauctions,likely2H


A. MoreCost-EffectiveWaytoAddLTEHistorically,therehavebeentwovehiclesforcableMSOstoaddamobileoptiontotheirnetworks:eitherspendbillionsinexpensiveFCCspectrumauctionsandthenspendbillionsmoretobuildoutanetwork,orputthemselvesatthemercyofanMVNOagreementwithamobilenetworkoperator.Sharedspectrumprovidesanadditionaloption.MSOscanaddLTEtotheirnetworksthroughanycombinationofthefollowing:

• AddLTEtofixednetworkassets,suchasindoorandoutdoorAPsthattheyalreadyownandmanage.ThisisaGAAlayeroption.

• AcquirespectrumthroughthePALauction,atlocationsorvenuesthatmakesenseforthebusiness.Thisaddedcoverage/capacitycouldbeavalue-addedserviceforexistingcustomersorawholesalenetworkrevenueopportunity.

• Buynetworkcoverageorcapacityonawholesalebasisfromanotherentity,suchasasystemsintegrator,towercompany,MNO,etc.

Theseoptionsrepresentanadd-ontoWi-Finetworkassets,orareanalternativewhendeployingmoreAPsistooexpensiveordoesnotsolvecoverageorcapacityrequirements.Thestructureproposedforthe3.5GHzbandpresentsanadded,andimportanttoolforMSOstoimprovecoverageandcapacity,atfarlowercostthantraditionalspectrumauctions,orexpensivealternativessuchasDASandcarrierWi-Fi.TheFCC’srulesallowingforincreasedpoweroutputfor3.5GHzdevicesisimportantforMSOsaswell,astheycannowconsideraddingsharedspectrumtotheiroutdoorAPs.B. ImprovedIn-BuildingCoverageandCapacityImprovingcoverageandcapacityforindoorwirelessisoneofthekeystrategicprioritiesofMSOnetworkexecutives.Providinggoodin-buildingwirelesscoverageandadequatecapacitycontinuetobeachallengeinmanysituations.Despitetheneedtoimprovein-buildingcoverage,therehavebeenfewsolutionsthathavefoundsignificantscale.They’reeithertooexpensive,complextodeploy,orthebusinessmodelisnotworkableinlargenumbers.TherearelimitstosimplyaddingmoreWi-FiAPs.Addingindoorsmallcellsdon’tmakesenseforanMSOwithoutamacronetwork.DASsolutionsalsodon’tmakesenseforanMSOlackingamacronetwork,andcanbeanoverkillsolutionincertaincontexts,bothintermsofcostandtimetodeploy,satanenterpriselevel.SharedspectrumisanopportunitytoaddcoverageorcapacitywheredoingsowithWi-Fiistooexpensiveorlogisticallychallenging.ItcanalsobeanaugmentationtoWi-Fi,given


theknownissueswithWi-Ficoverageandcapacity.Consider,forexample,ahospitalorhotel,whichhaveahighamountof‘guest’traffic.OnecouldviewspectrumsharingasopeningupanewmarketopportunityforthetraditionalDAS/neutralhostmodel.Itismorecosteffective,andcanbedeployedmorequicklythantraditionalDAS.Additionally,theon-demandnatureofsharedspectrummeansthatMSOscanacquirewhatevernetworkcapacitytheyneed.C. KeepingSubscriber/QualityofExperienceWi-Fimakessenseforin-homebroadbandusersandofficeworkerssittingattheirdesks.ButWi-Fialsosuffersfromsomechallenges:

• Limitedcapacity.2.4and5GHzWi-Fichannelshavebecomecongestedinmanyin-buildingenvironments.MobileEcosystemresearchindicatesthatinpublicorquasi-publicvenuessuchashotels,conventioncenters,stadiums,andrestaurants/cafes,theaverageLTEspeedsexperiencedbytheuserexceedthatofWi-Fi50%ofthetime.ThisisahugechangefromseveralyearsagowhereWi-Fiwasthedefaultforin-building.

• Wi-FiCoverageIssues.EvenwhereenterpriseWi-Fiisdeployed,wefindthatthereareoftensituationswhereWi-Ficoverageinthebuildingisinadequate.TheverylimitedrangeofWi-Fimakesitlogisticallyandeconomicallychallengingtoprovideubiquitousin-buildingcoverage.

• Qualityofexperience.Fortheuser,Wi-Ficertainlycomeswitha‘hasslefactor’.EverytimeonewantstouseaWi-Finetworkatanewlocationitrequiresanelaboratesign-onprocedure,withmultiplenetworknamestochoosefromandpasswords.ManyvenuesofferingfreeWi-Finowrequireuserstoviewanadvertisementbeforetheycangetjointhenetwork.WheretheMSOdoesn’tcontroltheWi-Fiassets,therecanbecoverage,capacity,andQOSchallenges.OfferingLTEallowsMSOstoofferenhancedcoverageandcapacitytotheirfixednetworkassetswhereitmakessensesituationally,orasanadd-onwheretheymightnothavefacilities.HavinganLTEoptiongivestheMSOtheopportunitytoofferamuchmoreseamlessandconsistentqualityofexperience,savingcustomersfromsomeofthehasslesandinconsistenciesassociatedwithWi-Fi.

• AsanalternativetodeployingmoreWi-FiAPs.DeployingadditionalAPstoimprovecoverageandcapacityisacumbersomeandexpensiveapproach,notwithstandingcongestionissues.Weareseeingenterprisesandvenueownersinparticularverticals(suchashospitalsandhospitality)pushingbackonthesedeploymentsorpassingthecostontousers.


D. CompetitiveAsset

MSOsmightneedtoconsiderasharedspectrummodelforcompetitivereasons.Mobilenetworkoperatorswantingtoimprovecoverageandcapacityhaveanincreasingarrayofalternativestojustaddingmoremacros.Theyaredeployingoutdoorsmallcellsinlargenumbersaspartofacomprehensivenetworkdensificationstrategy.Theyareimprovingin-buildingcoveragebyacquiringmoremid-andlower-bandspectrumanddeployingindoorLTEsmallcells,whicharebecomingcheaperandmorecapable.MNOsarealsodeployingLTE-UandsoonLAAservicesinordertoimprovecoverageandcapacity.Andtheyarestartingtoinvestin5G...startingwithtrialsforfixedwirelessservices.TheupshotisthatifMNOsareabletoimprovenetworkcoverageandcapacity,atafavorableeconomiccost,theywillkeepmoretrafficontheirLTEnetworks.TheywillbelessinterestedincarrierWi-Fioroffloadsolutions.TheymightbecomelesshospitabletohostingcableMVNOs.ThereisalsothespecterofInternetcompaniessuchasGoogleandFacebookprovidingsomeformofconnectivitysolutiontocompetewiththeMSOs.Thelongertermimplicationisthatifcellularnetworkscontinuetoimproveandpricesfordataservicescontinuetocomedown,budget-conscioususersmightnotbepreparedtospendsome$300-500permonthforbothfixedandmobileservices.Mobilebroadbandcouldstarttocannibalizefixedbroadband,ashashappenedinsomecountriesinEurope.CableMSOs,whosebusinessisbecomingincreasinglydependentonbroadband,willneedmobileassetsinsomeshapeorform.E. ComplementtoOtherUnlicensedServicesSuchasLWA/MulteFire

Therearenumerousoptionsemerginginunlicensedservicesasacomplementtotraditionallicensedspectrum.MNOsarelookingatLAAasawayofexpandingcapacity,usingchannelaggregationwiththeirlicensedspectrum.TherearealsooptionsemergingforWi-Ficentriccompaniesthatdonotrequirealicensedanchor,suchasLWAandMulteFire.TheindustryismovingforwardonwaystobetterleverageWLANinfrastructure.SharedspectrumcouldbeasuitablecomplementtootherMSOLWA/MulteFireinitiatives.3. BusinessUseCasesMobileEcosystembelievesthereareseveralprimaryusecasesforsharedspectrumforMSOs,asoutlinedbelow.A. PremiumServicesWebelievecableMSOscanusesharedspectrumtoofferpremiumservicesontopoftheirbroadbandandWi-Ficapabilities.Formsthiscantakeinclude:


• Coverageboost.InareashardtoreachwithWi-Fi.

• Capacityaugmentation.InsituationswhereWi-Fihotspotsarecongested,havelimitedcapacity,orsufferfrominterference.

• Value-addedservices.WithLTE,cableMSOscanoffersomepremiumvoiceservices,oftenreferredtoas‘RichCommunicationsCervices”(RCS).ExamplesincludeVoLTE,HDVoice,andpremiummessagingandvideoservices.

B. EnterpriseMarketCableMSOshavebeenexpandingtheirpresenceinthebusinesssegmentinrecentyears.MostinstallationsintheenterpriseinvolveabroadbandconnectionandthensomesortWi-Ficonfiguration.WebelievethereisasignificantopportunityforMSOstousesharedspectrumservicestoexpandconnectivityoptionsintheenterprise.Sharedspectrumcanbeusedtohelpdeliveranoptimized3.5GHz/Wi-Fiintegratednetwork.Thereareafewdifferentscenariospossiblehere:

• AsacomplementtoWi-Fi.EveryWi-Fisetupisdifferent.ButthereareoftensituationswheretherearepartsofabuildingorcampusthataredifficulttoreachwithWi-Fi,socableLTEcouldbeanoptionthere.Inothercases,Wi-Finetworkscanbeeasilyoverburdened,soLTEcouldbeusedforadditionalcapacity.

• Forcapacityboosts.Thinkofhotelsatnight,orwhenthereareconferences.ItmightbeeasiertotemporarilyboostcapacitythandeployexpensiveWi-Fiinfrastructure.

• AsanalternativetoWi-Fi.Therearecertaintypesofbusinessesorvenueswhereitmightmakesensetokeepcertaintrafficoncellular.Considerhospitals,bars,andothertypesofenterprisesthatcatertolargenumbersofguests.Giventhecapacitypotentialof3.5GHz,itmightmakebusinesssenseandalsobeabetteruserexperiencetoofferguestsanextensionoftheircellularservice,ratherthanhavingthemmuckaroundwithWi-Fipasswordsandthelike.

• Asanalternativetocellular.CableMSOsmightusesharedspectrumservicestooffercustomersanalternativetocellular,socustomersdon’thavetousedataofftheircellularplan.ThesituationhereissimilartohowCableWi-Fihasbeenmarketed,exceptthatLTEcoverageandperformancemightbebetterthanWi-Fiincertaincontexts.Thiscouldbeanimportantofferingtoenterprisecustomersandsmallbusinessesconcernedabouttheircellularservicespend.


• Backhaulsolution.Therearesufficientchannelsbeingmadeavailableat3.5GHzthatLTEsharedspectrumcouldbeusedforbackhaulincertainlocations—especiallyasasupplementtoEthernet/fiber,asatemporarysolution,orforredundancy.

Therearemyriadbusinessmodeloptionshere,aswell.TherecouldbecostsharingbetweentheMSOandtheenterpriseintermsofpayingfortheinfrastructureortheservice.Incertaincontexts,theenterpriseorvenuemightchargeend-usersfortheservice.Incertainlocationsandcontexts,itmightbeeasierfortheMSOtoguaranteeQOSoverLTEthanoverWi-Fi.Buildingandvenueownerswouldviewprovidingsuperiorwirelesscoverageandsignificantnetworkcapacityoverabuildingenvelopeasoneofthefeatures/benefitsofthatvenueinordertoattracttenants—muchlikeutilities,LEED/greeninitiatives,andsoon.ThiscouldalsotaketheloadoffenterpriseshavingtodeployWi-Fiasextensively.C. ParticularVerticalsMobileEcosystembelievesthattherearecertaintypesofbuildingsorvenuesforwhichsharedspectrumisparticularlysuited.Someexamplesareinthetablebelow.Exhibit2 TargetVenues/LocationsforSharedSpectrum

Vertical BenefitsofSharedSpectrumHospitals • ComplementWi-Finetwork

• Secure,dedicatednetworktomanagecompetinginterferingdevices• Largenumberofoutsideusers/visitors

UniversityCampuses

• Largenumberofusersmovinginandoutofbuildings• Wi-Ficoveragecanbeachallengeforeverybuilding• Extracapacityneededformultimedia• DiversityofMNOrelationshipsspeakstoneedforhostedsolution

Hospitality/Hotel • Improveindoorwirelesscoverageandcapacity• BalancetrafficbetweenWi-Fiandcellular,andpossiblychargeforpremiumservice

• KeepingcustomersonLTEmightbepreferabletosomebuilding/venueowners

SportingVenues • ComplementWi-Finetwork• HighcapacityLTEservicesmorecost-effectivethanDAS• Elastic,event-drivennetwork(addcapacityasneeded)• Premiumfanservicessuchasin-gamehighlights,statistics,andotherfeaturedcontent

Retail • Subscribercontinuityofcellular• TraditionalDASsolutionsnotsuitableformostretaillocations


D. MSOsasNeutralHostProviderHistorically,DAS,orneutralhostsystemshavebeendeployedbymobilenetworkoperatorsasawayofsignificantlyexpandingcoverageandcapacityatavenue.Stadiums,conventioncenters,andcorporatecampuseshavebeenthetargetforDAS.Thecostismainlybornebytheoperator.SharedspectrumservicesprovidetheopportunitytoofferaneutralhostsolutionsimilartoDAS,butforfarlesscostthantraditionalDAS.Assuch,MSOscouldplayaroleinaneutralhostsolution–potentiallyinpartnershipwithenterprisesorbuilding/venueowners.Asbroadbandortelephonyproviderstobusinesses,MSOscouldactasanintegratororneutralhost,offeringLTEserviceinthesamewaytheydobroadband.Incertaincontexts,itcouldbesubstitutiveofthefixednetwork;inothercases,itmightcomplementbroadband.Clearlytherearebusinessmodelissuestobesortedouthere.ButwebelievethereisaninterestingopportunityforMSOstoaddcellulartotheirsuiteofenterprisesolutions...withouthavingtobuildamacronetwork.E. AsPartofanMVNOServiceSomemajorMSOs,namelyComcastandCharter,haveannouncedplanstooffercellularservicesasMVNOs,invokinganMVNOagreementtheyhavewithVerizon.ComcasthaslaunchedXfinityMobile,leveragingWi-FihotspotsandusingVerizonasacellularprovider.Webelievesharedspectrumcanplayanimportantroleaspartofafuturecablewirelessservice—insteadof,orasacomplementto,anMVNOoffering.ThetermsoftheMVNOdealarenotespeciallyfavorableforhighlevelsofdatausage.Thesignificantamountofspectrumavailableaspartofthe3.5GHzproceedingcouldoffercableMSOsanadditionaloptionforcellularcoverageorcapacity,perhapsatmorefavorableeconomicsthanwhattheyarepayingVerizononawholesalebasis.Wecanalsoenvisionasortofhybridcable-Wi-Fi-cellularservice.Forexample,Comcast,whichhasacquired600MHzlicensesinseveralmarkets,couldthenbuildacompellingpropositionmixingandmatchingitsassets:Wi-Fi,MVNO,their600MHzspectrum,sharedspectrum,andperhapsevenservicesbasedonMulteFireorotherunlicensedservice.Theycouldalsoadd3.5GHzcapabilitiestooutdoorAPs,wheretherehavebeenQOSissuesassociatedwithWi-Fi.F. OutdoorCoverage/CapacityBoostWewereencouragedbytheFCCrulingallowinghigheroutputpowerfor3.5GHzsmallcells.Webelievethatthisdevelopmentaddsanopportunitytoprovidecoverageandcapacityaugmentationincertainoutdoorlocations.Historically,thesesituationshavebeen


addressedbyDAS,orcarrierWi-Fisolutions.Now,wehaveanewandpotentiallysuperioroptionincertaincontexts:neutralhost,lessexpensive,andfastertodeploy.Additionally,trafficdemandinthesesortsofscenariosisdynamicandchangeable,whichlendsitselftoamoreflexiblespectrumsharingframework.G. LastMileAccessWealsoseethepotentialforlast-mileaccess.ThiscouldbeusedforbackhaulpurposesinNon-Line-of-Sight(NLOS)situations,orasalessexpensivealternativeforshortrangebackhaul.ForMSOs,thisprovidesalessexpensivewaytoincreasecapacity,andopensuprevenueopportunitiesforfixedwirelesstypeservices.4. Framework/EconomicsTheapproachbeingtakenforthe3.5GHzbandplacestheUnitedStatesattheforefrontofhownetworkserviceswillevolve.Relyingonaspectrumsharingschemeandacloud-basedhostingmodel,MSOswillacquirenetworkresourcesonanas-neededbasis.SharedspectrumprovidesthebenefitsofaQOSLTEserviceforonlyaslightpricepremiumoverWi-Fi.ThebusinessframeworkbeingproposedbycertainpotentialSASvendorsisforacloud-basedsubscriptionmodel.TheenterpriseorMSOacquiresthespectrumonanas-neededbasis,asacomplementtobroadband,Wi-Fi,andeventheircellularMVNOofferings.

AdvantagesofaNeutralHostModel• Allowsformulti-operatorframeworktobeused,muchlikeDAS,forindoorand

enterprisemarket• ImprovesthecustomerexperiencecomparedtoWi-FibymaintainingQoSofLTE

andreducingissuesassociatedwithWi-Fi,suchasinterference• Increasesopportunitiesforcostsharing–enterprises,building/venueowners• Greaterlikelihoodthatotherpartieswilldeployaccesspoints:systemsintegrators,towercompanies,buildingowners,enterprises

• SignificantlylowercostofservicethaninasingleoperatorenvironmentThecloud-basedapproachisnecessaryforeffectivenationwideoperationofthesharedspectrumnetwork,providingscale(upordown),elasticity,processingpoweranddatastorage–alldynamically.Fortheoperators,itallowsforasubscription-basedpricingmodel,alaAWS,sotheMSOcanbuyonlywhattheyneedonahighlyflexiblebasis.Asaresult,MSOscanincreasethevarietyoftheirserviceofferingsbyputtingtogetherefficientpricingstructures,suchasa“payforwhatyouuse”model,fortheircustomers.


5. Go-to-MarketWebelievetherearetwocomponentsofanMSOgo-to-marketforsharedspectrum.Thefirstcomponentisdevelopingthebusinesscaseandfinancialsfordifferentsharedspectrumscenarios.ThedirectionheredependsonwhattheoverallstrategicdirectionisfortheMSO.Dotheyplantobeinthecellularbusiness(viaMVNOorownedlicensedspectrum),oraresharedspectrumservicesprincipallyanadd-ontotheirbroadband/Wi-Fibusiness?IftheMSOplanstobeinthecellularbusinessviaanMVNOorhybridowned/leased/sharedspectrummodel,akeynextstepistodeterminehowsharedspectrumfitsintothestrategy.Forexample,sharedspectrumcouldhaveafairlysignificanteffectonhownetworktrafficisapportionedbetween“on-net”(MSOWi-Fiandowned/sharedspectrum)and“off-net”(MVNOpartner).Ifsharedspectrumfitsintothestrategy,theMSOwillneedfewerresourcestoacquirelicensesaspartofthecompany’soverallapproachtomobile.ThesecondcomponentisrelatedtotheMSO’ssharedspectrumbusinessthatleveragesitsbroadband/Wi-Fiassets.Here,theMSOisadding3.5GHztoWi-FiAPsandistalkingwithenterprisecustomersaboutcoverage/capacity/premiumservicebenefitsofsharedspectrum.TheMSOwillneedto:

• Developthebusinesscaseandfinancialsfordifferentsharedspectrumscenarios.Thedirectionheredepends,inpart,onwhethertheMSOplanstobeinthecellularbusiness(viaMVNOorownedlicensedspectrum),orwhethersharedspectrumservicesareprincipallyanadd-ontotheirbroadband/Wi-Fibusiness.

• Equipthesalesorganizationtohavesharedspectrumdiscussionswithenterprises.Therewillbeopportunitiestoexpandcoverageandcapacity,and/oroffloadtrafficfromcellularservices.Thediscussionsmightalsoincludeenterprises/venuessharinginsomeofthecostofdeployment,ormakingtheirfacilitiesavailablefordeploymentofAPs.

MSOsaregoingtohavetogetcomfortablewiththreegame-changingelementsenabledbyspectrumsharing:theideaofaneutralhostsolution(whichtheyhavealreadydoneforDAS);anexpandedecosystemofpotentialpartners,suchasSIsandbuildingowners;andnew/alternativebusinessmodelscombiningfixedandmobileservices(cloud/subscriptionbased).Theywillneedtotakeintoconsiderationthefollowing:

• Test/Trialspectrumsharingin2H2017/1H2018.ThefirstSASshavebecomeoperational.Test-readyvendorequipmentandearlydevicesequippedwith3.5GHzcapabilitiesarealreadyavailable.WebelieveMSOsshouldconsidertestingsomesharedspectrumservicesinthelatterpartof2017and2018,keepinganeyeonMNOactivities.Testingwouldbe:


o Withenterprisecustomers,and/orbuildingorvenueowners.Pickakeytargetvertical,suchashospitalorhospitality

o PossiblyincooperationwithotherMSOs,ifsharedspectrumistobepartofthe“cableWi-Fi”regime

o PossiblywithMNOs,especiallyifsharedspectrumisgoingtofitintoanMVNOtyperelationship

• Determineprimaryusecaseonaperopportunitybasis.Whatisthemixofcoveragevs.capacity,andhowistrafficshiftedbetweenWi-FiandLTEonanAP?

• Buildasalesandbusinessdevelopmentorganization.Determinewhichtypesofcustomerswillbeacquiredviadirectsalesandwhichwillbethroughpartners,suchastowercompaniesandsystemsintegrators.ThepartnerdevelopmentorganizationwillforgerelationshipswithSIs,venueowners,andsoon.Thisorganizationwillneedtobeknowledgeableabouttheeconomicsandhavebusinessmodelsattheready.

• Buildbusinesscases,todeterminewhichtypesofopportunitiesareappropriateforsharedspectrumvs.alternatives,suchasWi-Fi,MVNO,andotheremergingopportunities,suchasMulteFire.

• Businesscasesandmodelsshouldalsodelineatehowcostresponsibilities

shallbeshared,dependingontheopportunity,betweenMSO/enterprise/venueowner.

• Developbusinessmodels/casestoclassifytypeofopportunity(internal)

o Customerretention?o Revenueenhancement?

• Developapricingmodelfordifferentsituations/customers/contexts

o Asanextensionofbroadband/Wi-Fi—noextrachargeo Premiumchargeforenhancedcapacity/coverage,wherecustomerssharein

thecostofdeploymento Areanychargesforhardwarepassedon,orarechargesonlyforservices?

ItwillalsotakesometimeandexperiencewithspectrumsharingtodeterminewhattypesofopportunitiesarePALvs.GAA,andhowtovaluethespectrumandtemporarylicenses.ConclusionWeareparticularlyexcitedaboutthesharedspectrumand3.5GHzbandopportunity,forthreereasons.First,itunleashesagame-changingamountofspectrum,allowingforanewwayofthinkingaboutcapacityandcoverage.Second,itprovidesapotentiallyviablesolutiontowhathasheretoforebeenanintractableproblem:in-buildingwirelesscoverage.


Third,thisrepresentstruebusinessmodelinnovation,vauntingtheU.S.toagloballeadershipposition.ThenetworkofthefuturewillhaveamixofWi-Fi(fixed)andmobileassets,combininglicensedandunlicensedservices.Traditionalboundariesbetweenfixedandmobileoperators,betweenlicensedandunlicensedservices,andbetweenWi-Fiandmobile,willbeeroded.MSOshavetheopportunitytoconsidersharedspectrumasanoptionforgreatercoverageandcapacity,aswellasforpremiumservices,leveragingtheirbroadband/Wi-Fiassets.Overtime,thiscanbeanimportantelementoftheirbroadermobile/cellularstrategy.Sharedspectrumcouldprovetobeanimportantcustomerretentionandrevenueenhancementtool,openingupnewopportunitiesintheenterprisesegmentandpotentiallyotherpartnersinthecommunicationsanddigitalmediaecosystem.Disclaimer:ThisWhitePaperisauthoredbyMobileEcosystem,withtheobjectiveofpromotingthoughtleadershipwithregardtosharedspectrumopportunities.TheWhitePaperisunderwrittenbyFederatedWireless,Inc.Innowaydoesthis

WhitePaperrepresentanendorsementofanyparticularvendor'sproductsorsolutions.

PleasecontactMarkLowenstein,ManagingDirector,MobileEcosystem,[email protected]@marklowenstein

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