A major battle between satellite owners, broadcasters, and the telecom industry has emerged over a proposal to repurpose a portion of C Band satellite spectrum for use by the wireless industry.

Multiple proposals from the wireless and cable industry to raid C Band satellite frequencies for the use of future 5G wireless networks suggest carving up a band that has been used for decades to distribute radio and television programming.

Before the advent of Dish Networks and DirecTV, homeowners placed 6-12′ large rotatable satellite dishes in backyards across rural America to access more than a dozen C Band satellites delivering radio and television programming. Although most consumers have switched to much smaller fixed satellite dishes associated with Dish or DirecTV, broadcasters and cable companies have mostly kept their C Band dishes to reliably receive programming for rebroadcast.

Now the wireless industry is hoping to poach a significant amount of frequencies in the C Band allocation of 3.7-4.2 GHz to use for 5G wireless service. Competing plans vary on exactly how much of the satellite band would be carved out. One plan proposed by Charter Communications and some independent cable companies would take 370 megahertz from the 500 megahertz now used by C Band satellites and sell it off in at least one FCC-managed auction to the wireless industry. A more modest plan by an alliance of satellite owners would give up 200 megahertz of the band, allowing wireless companies to acquire 180 megahertz of spectrum. To reduce the potential of interference, both major plans offer to set aside 20 megahertz to be used as a “guard band” to separate satellite signals from 5G wireless transmissions.

Satellite dish outside of KTVB-TV in Boise, Ida. (Image courtesy: KTVB-TV)

Much like the FCC’s repack of the UHF TV dial, which is forcing many stations to relocate to a much smaller number of available UHF TV channels, most proposals call on the FCC to subsidize dislocated satellite broadcasters and users with some of the auction proceeds to help pay the costs to switch to fiber optic terrestrial distribution instead.

Broadcasters and satellite companies claim the cable industry proposal would leave U.S. satellite users drastically short of the minimum 300 megahertz of satellite spectrum required to provide radio and television stations with network programming. Many rural broadcasters have complained that the cable industry plan calling for a shift to fiber optic distribution ignores the fact that there is no fiber service available in many areas. Other objectors claim fiber outages are much more common than disruptions to satellite signals, putting viewers at risk of a much greater chance of programming disruptions.

With spectrum valued at more than $8 billion at stake, various industry groups are organized into coalitions and alliances to either support or fight the proposals. The Trump Administration has made it known it is putting a high priority on facilitating the development of 5G services to beat the Chinese wireless industry, which is already moving forward on a major deployment of next generation wireless networks. The FCC, with a 3-2 Republican majority, has signaled it is open to reallocating spectrum to wireless carriers for the rollout of 5G service. Unfortunately, much of this spectrum is already in use, setting up battles between incumbent users threatened to be displaced and the wireless industry, which sees big profits from acquiring and deploying more spectrum.

With serious money at stake, strains are emerging among some individual members of the different industry groups. Late last week, Paris-based Eutelsat Communications quit the largest satellite owner coalition, the C-Band Alliance. The move fractured unity among the world’s satellite owners, just as the FCC seems ready to move on a reallocation plan. Eutelsat will now lobby the FCC directly, reportedly because of concerns among shareholders that splitting off significant amounts of C Band spectrum is inevitable and could drastically reduce the value of Eutelsat’s share price. Eutelsat reportedly wants to independently participate in the FCC’s proceeding, potentially securing a larger amount of compensation from the FCC for the spectrum it will give up as part of a final reallocation plan.

Whatever compensation plan emerges will run into the billions of dollars. Satellite dishes will probably require new equipment to shield signals from interference, may require re-pointing to a different satellite (which could prove problematic for some equipment originally installed in the 1980s), and may even require the launch of additional satellites to provide more capacity in the newly slimmed C Band.

The FCC is expected to decide on the reallocation proposals this fall, with a signal repack likely to take between 18-36 months before the frequencies can be cleared for use by wireless operators.

Satellite owners, mobile carriers, and cable operators discuss reallocating part of the satellite C Band for use by 5G wireless networks. Sponsored by the industry-funded Technology Policy Institute. Sept. 3, 2019 (44:10)

Jio founder Mukesh Ambani formally announces the launch of Jio Fiber.

Starting Thursday, the first 500,000 of over 15 million Indians pre-registered for service will begin receiving fiber to the home broadband at speeds starting at 100 Mbps, bundled with free unlimited voice calling for under $10 per month.

Jio Giga Fiber will eventually serve more than 20 million Indian homes and businesses in over 1,600 communities, charging a fraction of the prices charged by North American cable and phone companies, and expects to remain profitable by selling extra services, including unlimited global calling plans and television service, to Indian consumers. To sweeten the deal, customers that commit to a year of service will receive a 4K LED TV and set-top box for free.

Jio has already laid over 186,000 miles of optical fiber and has an existing base of 500,000 trial customers across India that have been testing the service.

Jio is India’s largest wireless provider, with over 323 million subscribers, making it the third largest mobile operator in the world. It is also one the newest, having launched wireless service in late 2015 over an expansive 4G LTE network. The company was founded by Mukesh Dhirubhai Ambani, one of Asia’s wealthiest men. His vision is to make telecommunications services affordable and available to the largest number of people possible, with an emphasis on making entry-level plans usable and affordable. His presence in the Indian telecom market has caused the same marketplace disruption T-Mobile has caused in the U.S.

Jio’s chief competitor, the state-owned BSNL telephone company, is rumored to be negotiating with several of India’s independent cable and internet providers to offer a competing joint bundle of TV, landline, and broadband services over optical fiber at prices under $9.75/month.

If both companies are successful, Indians will have access to some of the cheapest internet service in the world. 

Jio Fiber is designed to provide India with fiber broadband service as good or better than what is available in the United States and Canada, for a much cheaper price. Ambani noted the average broadband speed in the U.S. is now 90 Mbps, but Jio Fiber will beat that with plans starting at 100 Mbps. He has successfully navigated around skeptical investors by putting up more than $30 billion of his firm’s own money to back the telecom venture, instead of returning that money to shareholders in the form of dividend payouts and share buybacks. He can raise even more cash by selling and leasing back Jio’s extensive network of wireless cell sites.

Ambani sees Jio’s fiber network as a foundation for marketing additional products and services. Wealthier Indians will be invited to spend up to $139 a month on gigabit internet, a deluxe TV package with over 600 TV channels, a landline with unlimited international calling, and access to popular movies on the same day titles are released in Indian theaters. Customers with premium level service will also get free subscriptions to “most” popular video streaming services available in India (excluding Netflix and Amazon Prime Video). One downside to Jio’s plan — it comes with a 100 GB monthly data cap. Those exceeding it will see their speeds reduced to 1 Mbps for the rest of the current billing period. There is no word yet about the availability of unlimited use plans at an additional cost.

Jio has been strategically planning to introduce fiber service for several years and has purchased several Indian cable companies to help manage infrastructure, installation, and a network of retail stores that will act as a sales point for Jio’s wireless and fiber services.

Jio’s Mukesh Ambani introduces India to Jio’s new fiber to the home service, which will cost under $10 a month. (6:59)

CenturyLink’s stock is being pummeled after the company announced a cut in divided payouts to shareholders earlier this year, preferring to keep the money in-house to reduce debt and increase spending on necessary broadband upgrades.

Last fall, CenturyLink stock was trading for over $23 a share. By January, rumors that CenturyLink was going to cut its dividend put the stock on a downward trajectory, falling to an all-time-low below $11 this month. Company officials argued that with tightening credit opportunities and increasing interest rates, the company needed to devote money normally paid back to shareholders towards paying down its $35.5 billion long-term debt and provide better service to its customers.

A half billion dollars of that money will also be spent on upgrading CenturyLink’s broadband service, particularly in rural areas where the company is receiving Connect America Fund (CAF) dollars from the federal government.

“Our plan for 2019 includes investing to improve the trajectory of the business increasing CapEx by roughly $500 million,” Jeff Storey, president and CEO of CenturyLink said on a January analyst conference call. “As I mentioned earlier those investments include expanding the fiber network, adding new buildings throughout our footprint, enhancing our enterprise product portfolio, continuing our investments in CAF-II, and transforming our customer and employee experience.”

Investors were not impressed with those plans, and CenturyLink’s share price cratered.

Independent phone companies have traditionally attracted investors with handsome dividend payouts, but the realities of their aging infrastructure and the inability to compete effectively with cable companies on lucrative broadband services have left companies like CenturyLink, Windstream, and Frontier Communications in a quandary. Shareholders do not perceive value investing in fiber optic network upgrades and punish companies that announce dramatic increases in network investments. Customers left on slow-speed ADSL networks are increasingly dissatisfied with their internet experience and seek alternative providers — usually the local cable company. As Frontier Communications has discovered, attempting to win back ex-customers has been exceedingly difficult, often only possible with lucrative promotional offers that undercut the cable company. But such offers attract customers with above-average price sensitivity, making it difficult to extract increased revenue from them going forward.

CenturyLink’s stock price has dropped to an all-time low over the last six months.

Investors are also increasingly concerned about the financial viability of investor-owned phone companies that are stuck between leveraging their old networks and facing down shareholders when upgrades become essential. AT&T and Verizon have wireless units responsible for much of the revenue earned by those two Baby Bells. Traditional phone companies have had less luck trying to sell ancillary support services like Frontier’s “Peace of Mind” technical support service, or bundling satellite TV service into packages.

CenturyLink’s Local Service Territory (Source: CenturyLink)

CenturyLink is increasingly depending on its enterprise and wholesale businesses to earn revenue. That fact has prompted some shareholders to ask why the company hasn’t spun off or sold off its traditional landline network and consumer businesses, which currently account for only 25% of its revenue. In May, CenturyLink seemed determined to placate those investors with an announcement it was exploring “strategic options” for its consumer business. Investors theorize that CenturyLink could “unlock value” from its legacy landline networks in such a sale or spinoff that would benefit shareholder value. It would also be much cheaper than investing in that network to upgrade it.

The chorus for a sale increased after Frontier Communications announced it was spinning off its landline territories in the Pacific Northwest to a company specializing in upgrading legacy networks to support better broadband. Frontier, mired in debt and facing a concerning due date for some of its bonds, made the sale to give a boost to its balance sheet. Frontier had also been facing increasing scrutiny about a potential Chapter 11 bankruptcy filing. Windstream declared bankruptcy earlier this year, reminding investors that a trip to bankruptcy court could quickly wipe out all shareholder value.

MoffettNathanson, a Wall Street analyst firm that specializes in telecommunications, finds little to like about CenturyLink shedding its own landline operations. Frontier’s sale benefited from the fact a significant part of its Pacific Northwest territory was built from an acquisition from Verizon, which had already installed its FiOS fiber to the home network in parts of Washington and Oregon. About 30% of the territory Frontier is selling is fiber-enabled. In comparison, CenturyLink has installed fiber to the home service in only about 10% of its territory, dramatically reducing any potential sale price. Much of CenturyLink’s core fiber network powers its enterprise and wholesale operations — businesses CenturyLink would likely keep for itself.

MoffettNathanson also sees little value from the proposition a buyer could leverage CenturyLink’s network to provide backhaul fiber capacity for future 5G services, because CenturyLink provides service mostly in smaller communities likely to be bypassed by 5G, at least for the near term.

Wall Street’s idea of a win-win strategy for CenturyLink is to keep its consumer business and expand its broadband service footprint and capability, if the federal government offers to cover much of the cost through more rounds of CAF subsidies. Taxpayers would subsidize broadband expansion while CenturyLink and shareholders share all the profits.

The next standard for cable broadband is now due by 2020.

CableLabs is working on the next generation of broadband over existing Hybrid Fiber-Coax (HFC) networks, finally achieving identical upload and download speed and supporting more spectrum on existing cable lines, which could mean another leap in broadband speed.

DOCSIS 4.0 is still evolving, but according to Light Reading, the next upgrade will fully support Full Duplex DOCSIS, allowing customers to get the same upload speed as their download speed, and will fully implement Low Latency DOCSIS which could reduce traffic delays to under 1 ms. The new standard will also introduce Extended Spectrum DOCSIS, which will open up broadband traffic on frequencies up to 1.8 GHz — 600 Mhz more bandwidth than available today. That additional spectrum will allow for speed increases in excess of 1 Gbps, support IP video traffic, and backhaul for wireless applications like small cells. 

According to Light Reading, people familiar with the development of the cable broadband specification believe much of the work will be complete by the end of 2019, with the spectrum expansion specification expected before mid-2020. This would allow the introduction of DOCSIS 4.0 modems for purchase beginning in 2021.

Cable operators are largely taking a break on large investments this year, with few planning major infrastructure changes beyond some projects underway at Comcast and Altice-Cablevision’s ongoing replacement of its HFC network with fiber to the home service. In 2020, operators will make crucial decisions about their next upgrade commitments. Comcast and Altice will have the easiest time delivering symmetrical broadband because Comcast will support the “Node+0” design that eliminates amplifiers between the nearest node and the customer’s home. This will facilitate the introduction of symmetrical speeds. Altice is dropping the DOCSIS standard as it moves to fiber service, which already supports symmetrical speeds.

Other cable operators are not currently committed to removing amplifiers from their networks, supporting alternate designs like “Node+1,” “Node+2,” etc., which are similar to today’s cable system designs. Instead, they are hoping to leverage Extended Spectrum DOCSIS to boost their speeds. Most will likely offer significant speed bumps for uploading, but those speeds won’t match download speed. For example, Charter Spectrum or Cox might upgrade customers to 500/100 Mbps service, on the theory that 100 Mbps upload speed will still be a welcome change for customers, and not noticeably slower for most current applications, such as uploading videos or file storage in the cloud.

Industry trade association NCTA reports that Comcast, Charter, Cox, Mediacom, Midco, Rogers (Canada), Shaw Communications (Canada), Vodafone (Europe), Taiwan Broadband Communications, Telecom Argentina, Liberty Global (Europe/Latin America) are all implementing the industry’s 10G initiative, with lab trials already underway, and field trials beginning in 2020. DOCSIS 4.0 will ultimately be a part of that project.

CableLabs is already making plans for DOCSIS 4.1 (our name, not theirs), that will further extend DOCSIS spectrum up to 3 GHz — a massive upgrade in usable spectrum. Whether that will be technically plausible on aging cable systems last rebuilt in the 1990s isn’t known, and probably won’t be for two or more years. But if it proves technically feasible, DOCSIS 4.1 could be one of the last DOCSIS standards before cable systems consider abandoning HFC in favor of all-fiber networks.

CableLabs has proved itself to be adept at squeezing every bit of performance out of a network that was originally built with simple coaxial copper cable and designed to distribute analog TV signals. DOCSIS 4.1 would support speeds potentially as high as 25 Gbps downstream and 10 Gbps upstream. Customers would require new cable modems and cable systems would have to tighten standards to take aging infrastructure out of service more frequently. Upload traffic would likely be assigned spectrum below 1 GHz, with 1-3 GHz reserved for downloads. By then, television, phone, and internet services would likely all be a part of a single broadband pipe.

Cable systems have enjoyed enormous cost savings over the last 20 years deploying DOCSIS upgrades instead of scrapping their existing HFC networks in favor of all-fiber. Charter Spectrum admitted the cost to upgrade from DOCSIS 3.0 to DOCSIS 3.1 was just $9 per subscriber.

Third party contractors hired to install fiber optic infrastructure that will deliver Google Fiber internet service in parts of North Carolina are getting an increasing number of complaints from frustrated residents upset with the pace of the work, the mess it creates, and disruptions caused when crews accidentally damage existing utilities.

In Cary, construction crews are testing the patience of residents on Kilarney Drive, who have endured multiple power outages caused by Google’s contractors digging up the streets in the area.

In one neighborhood, crews removed a section of a sidewalk and installed a utility cabinet in its path. In others, cabinets were installed on the wrong side of the street. In some areas, Google’s contractors are still experimenting with shallow dug fiber installations. Some residents reported they unearthed their underground Google Fiber connection after raking their lawns. Others claimed their home’s water service line was cut by construction crews. Last winter brought multiple outages when snowplows dragged up fiber lines buried just an inch or two into the pavement and held in place with foam.

This summer’s service disruptions are coming at inopportune times, Cary residents complain. Recently, crews mistakenly cut through cables providing power, phone, and cable service, knocking out power for four hours and cutting off air conditioning on a 92 degree day.

Watching the crews slowly move through the neighborhood also has some residents concerned.

“It took them a week or two to do a couple hundred yards,” Cary resident Ed Fillback told WRAL-TV. “How long is it going to take to do the town?”

Google Fiber officials shared a response to the disruptive work in a prepared statement.

“Building a brand new fiber network is a big and complex project, and we’re sensitive to the impact construction has on a community. We want to be good neighbors, and do everything we can to minimize disruption, respond to residents, and resolve issues quickly.”

WRAL in Raleigh reports neighborhood frustration with Google Fiber’s buildout in North Carolina is growing. (2:56)