Carriers Unite Against Verizon's Spectrum Deal

Advertisement
Advertisement

While Verizon is in the process of acquiring XO Communications to bolster its plans of rolling out 5G by 2019, cellular carriers and some public interest groups are petitioning the FCC to review the acquisition. The Competitive Carriers association (CCA) which includes the likes of T-Mobile, Sprint and a hundred other carriers and groups like Public Knowledge and New America's Open Technology Institute have raised a number of concerns like potential harm to competition, complete control of Verizon over 5G services, increased prices smaller carriers have to pay for local number portability and for backhaul transport. Save for an intervention by the FCC, Verizon may complete the acquisition of XO Communications by the first half of 2017.

The acquisition of XO will give Verizon complete control over 28 GHz and 39 GHz millimeter wave bands which are essential for rolling out commercial 5G services. Until the FCC decides to make a part of such bands free of licence or decides or introduces spectrum-sharing rules, Verizon will have a major advantage over rival carriers in the coming years. Public Knowledge told the FCC that AT&T and Verizon shouldn't be allowed to own a bulk of the available 39 GHz spectrum like they do with the sub-1 GHz spectrum available today. The CCA has been equally vocal against the acquisition and has contended that post acquisition, Verizon will be able to deny local number portability to rival carriers or charge more for such services. At the same time, Verizon may also charge other carriers a lot more for backhaul services which are already a major burden on their finances. As of now, backhauling costs carriers as much as 30% of their operating costs and if such costs increase, smaller carriers will not be able to deploy 5G effectively across the country.

Advertisement

The millimeter wave spectrum which covers 28 GHz and 39 GHz frequency bands is currently owned by XO Communications and apart from having a wider reach, is capable of offering data transmission speeds up to 40 times faster than existing 4G bands. The unbelievable speed it offers has sparked a virtual rat race between carriers and cable operators to implement 5G networks even though the reach of 4G LTE across the country has still not matured. The thirst for 5G is such that even Dish, which owns up to 700 MHz of spectrum, has contended that the acquisition of XO by Verizon will put the latter in a position of great advantage at the cost of other carriers and will save Verizon the cost of paying fiber providers for services in over 40 major US markets. Offering high bandwidth, better throughput and faster than ever data speeds, 5G will truly be the next generation wireless technology that will change our understanding of the internet. Until then, it will be interesting to see if Verizon will go through with its plans to implement 5G or if the FCC will consider the points against the move and make 5G accessible to all carriers in future.