On the heels of its decision last month to issue a national framework for 5G wireless deployment, the Federal Communications Commission (FCC) is poised to take another positive step to spur the deployment of next-generation wireless technology.
Next week, the FCC will vote on proposed regulatory changes to the 3.5 GHz spectrum band, which many see as the key to 5G’s success. The crux of the FCC’s plan is to free up more spectrum to hasten the deployment of 5G networks across the country.
The buildout of 5G networks in the U.S. is expected to add $533 billion to gross domestic product (GDP) and $1.2 trillion in long-run consumer benefits, according to an analysis by the American Consumer Institute.
Our international competitors — including Japan, South Korea, China, Spain, Finland, and the United Kingdom — are moving aggressively to free up mid-band spectrum for wireless use, but the U.S. simply hasn’t kept up. If approved, the FCC’s reforms would unleash innovation and investment in 5G that has been hampered by outdated restrictions.
In particular, the FCC will consider revising the rules governing the 70 MHz of licensed spectrum in the 3.5 GHz band to pave the way for 5G. One of the proposed changes would be to issue spectrum licenses based on county-sized areas instead of census tracts, which often cover only a few city blocks. The FCC’s current approach based on census tracts — which amount to 74,000 separate license areas in the U.S. — would be unworkable in the context of 5G, deterring investment and adding needless administrative complexity.
Unlike its 4G predecessors, 5G networks don’t rely on large cell towers. Instead, 5G is based on millions of small cells — each roughly the size of a shoe box — located on street poles and neighborhoods throughout the country.
In dense urban areas, using a census tract-based licensing scheme would be a nightmare for 5G providers who would be required to obtain a separate license for each census tract they served. For example, in Washington, DC, a provider would need to acquire licenses in 179 separate census tracts to cover the entire city. Using county-based license sizes — similar to the area that most of the rest of the world has already adopted — would be a vast improvement.
The FCC’s plan also improves the license renewal process, giving providers more confidence that their licenses will be renewed and greater incentive to enter the 5G market. This is particularly important to promote rural buildouts that require long-term commitments. In the absence of an expectation that licenses will be renewed, investors will be reluctant to devote the resources needed to bring 5G to rural populations.
Under the plan, providers would also be granted longer license terms, giving additional confidence to investors, and rural providers would benefit from a special bidding credit at auction to help them acquire the spectrum they need to serve rural residents.
Together, these reforms to the 3.5 GHz band will accelerate the pace of 5G deployment and position the U.S. once again to lead in the global race for a nationwide network. The FCC’s swift action couldn’t come at more urgent time.