The editorial and opinion page of The Washington Post has always been an uneven experience, especially when it comes to their views on the telecommunications business.

For years, the Post’s editorial page has been suspiciously cable-friendly. It favored Comcast’s failed 2014 acquisition of Time Warner Cable — a thought so horrible, readers were likely to spit out their morning coffee after seeing it. At first, one might have attributed the editorial board’s friendliness to the fact its corporate parent at the time also owned Cable One, a cable operator serving small and medium cities in places Comcast, Charter, and Cox forgot. But Cable One is now long gone — spun off as an independent entity. So perhaps laziness explains why reporters and columnists are frequently suckered by well-worn talking points from a cable industry on the defensive — celebrating every article proclaiming the impact of cord-cutting is muted, at best.

This morning’s shallow column by “right-leaning blogger” Megan McArdle, “You think you hate your cable bundle. You’re wrong,” is an excellent case in point. It’s a combination of cable industry folderol and misunderstanding of the economics of today’s cable business.

McArdle argues that recent subscriber growth by Netflix, Hulu, and other streaming services should mean we can get rid of the hated cable television bundle. Only we don’t she says, because we “actually love bundles.”

Her argument runs into trouble almost immediately when attempting to conflate a-la-carte economics of the television business with the likely impact of that type of pricing on hotels, airlines, and restaurants:

When you book a hotel, you expect “complimentary” mattresses, sheets and towels, rather than renting each individually. When you go to a restaurant, you don’t pay extra to enjoy the use of a plate. And you get very testy indeed upon discovering that your bargain airline charges you to choose a seat or bring luggage.

Bundling, it turns out, is valuable. You aren’t willing to give up complimentary shampoo and towel service when you’re traveling, because that turns every shower into a financial decision. The hotel, meanwhile, would need more staff to field requests for trivia, raising the price of the room. Much better for everyone to sell you a bundle that we call a “hotel room” but that really includes a bunch of ancillary products you might like to use during your stay.

In 2014, the Washington Post editorial page endorsed the Comcast-Time Warner Cable merger that eventually fell apart.

Value is in the eye of the beholder, and hundreds of thousands of cable customers are doing what was once unthinkable for the cable industry (and Ms. McArdle) — they are cutting the cord to their cable television package for good. That is a fact many cable executives are now willing to acknowledge. It is why CEO’s complain about the inflation rate of cable programming costs and the fact subscribers are no longer amenable to annual budget-busting rate hikes for cable television. Some cable companies now attempt to hide those growing costs in fine print surcharges for broadcast TV stations and sports programming. Others are offering new slimmed-down cable package options for customers no longer willing to pay for dozens of channels they will never watch. It’s a story we’ve covered for nine years, but one Ms. McArdle obviously missed.

Her analogies about an a-la-carte world for hotels and airlines isn’t a good one because nobody staying in a motel or flying complains about getting too much from either. As with all things, there is a general consensus about what one can expect staying in a Holiday Inn or flying Delta. You can find outliers like the seedy motel with hourly rates that charges for clean sheets or the airline that is now contemplating new seating arrangements that cram people even tighter into an almost-standing position. But when you signed up for cable television, you did not expect or ask for hundreds of channels — many added not because subscribers valued them but because of corporate contract decisions or launch bonuses. But you didn’t have much of a choice with “take it or leave it” lineups. McArdle’s argument falls into the industry’s favorite talking point of all — the value proposition. ‘Yes, your cable bill is now headed for $200 a month, but look at all the value we give you by bundling dozens of networks you’ve never heard of with a phone line you don’t want and an internet connection that we now target for our annual rate hikes.’

Bundled pricing is designed to trap you into their business model, and any attempt to claim we “love” those pricing plans is extremely misguided.

Take Spectrum’s misleading promotion for a year of their triple play bundle, marketed as: TV+Internet+Voice with a price of $29.99/mo each. Not a bad deal. One can take internet service and television, for example, and expect to pay just under $60 a month for both. That’s a fine price. But then you missed the fine print. It actually says “from $29,99/mo each for 12 months when bundled.” To actually get those services for $29.99 a month each you have to take all three. If you just want the aforementioned bundle of television and internet service, the promotional price for that is $59.99 a month for television, plus $29.99 a month for internet — which adds up to one cent more than Spectrum’s triple play promotion, which also includes a phone line.

Do subscribers “love the bundle” or traditionally take it because it is the only package on offer from the cable company that makes economic sense, given the options?

McArdle continues:

Bundling is especially valuable in businesses where fixed costs account for a disproportionate share of the total price. Once you’ve gone to the monstrous expense of building and staffing a hotel, providing extra amenities generates little additional cost while adding a great deal of value for the customer. And the same is true of cable. Much of the expense comes from laying and maintaining a wire to your house; adding another channel is relatively cheap.

Right now, cable companies sell you phone, Internet service and entertainment products, all of which share one wire, one maintenance operation and one customer service staff. Without those other services, the Internet division would have to cover all that overhead. So if you pay less for the entertainment, you’re probably going to have to pay more for connectivity.

The sunk costs of cable company infrastructure have been largely paid off for years. Today’s cable systems were largely designed and last significantly overhauled in the 1990s and early 2000s to make room for more television channels. Every service contemplated for sale by the cable industry, including broadband, was designed to work over a hybrid fiber-coax network design that has been in place for 20 years. Move analog television channels to digital, and one opens up room for more broadband. Need more bandwidth for broadband? Order a node split to further divide pools of users.

The cable industry itself rejects McArdle’s argument for the one-size-fits-all cable bundle. It is why companies have started to introduce slimmed down cable packages and sell new packages of over the top streaming cable TV channels to their broadband-only customers. The costs to deliver and support the broadband services cable companies now love to offer have been declining for years, even as rates increase. Ms. McArdle is obviously also unaware of the industry’s push to launch more self-service options for customers to cut down support calls and dramatically reduce the number of truck rolls to customer homes. She may also not realize the impetus to raise prices comes not out of necessity, but from Wall Street and investors’ revenue expectations.

As cable television programming prices increase, the profit margin on cable television goes further into decline. But the cable industry makes up the difference by raising broadband prices. That is one segment of its business that remains very strong. Losing video subscribers is not the disaster Ms. McArdle suggests it could be. In fact Moody’s recently noted that with broadband profit margins about three times more than for video, the economic loss from a departing video customer can be neutralized by growing broadband subscribers at a fraction of the video unit’s loss. The ratings agency estimates that a ratio of about two broadband subscribers added for every video customer loss should offset revenue losses, while a ratio of 0.67 times that takes care of profit declines as well. That is based on current prices. Therefore, as cable companies add broadband customers, they easily offset the financial impact of video customers departing with no actual need to raise rates.

McArdle finally falls into the trap of using today’s linear TV paradigm as the basis of her argument that if all cable television channels were sold a-la-carte, they would cost astronomically more than they do as part of a bundle. But if that were true, the slimmed down competitive offerings of DirecTV Now, Sling TV, and others would be substantially more expensive than they actually are. For many customers, the out-the-door price is what matters, even if they are paying more for each of the channels they are interested in watching. A $35 DirecTV Now bill is still a lot less than an $80 cable TV bill, which often does not include surcharges and equipment fees.

Wall Street analyst Richard Greenfield of BTIG Research is so skeptical of the future of today’s bloated bundles, he has a Twitter tag: #goodluckbundle that expresses his view that bundled, linear, live television itself is decreasing in importance as viewers turn to on-demand streaming services. Subscriber satisfaction with Netflix and Hulu is much higher than almost any cable company.

Snapshot of #cordcutting — more consumers are abandoning the “big” bundle #goodluckbundle https://t.co/Bp8Zz9LX2T pic.twitter.com/bTwUjKu0F5

— Rich Greenfield (@RichBTIG) August 11, 2016

One of Stop the Cap!’s readers understands subscribing to a lot of streaming services can also cost a lot, but customer satisfaction matters even more:

“It still adds up when you subscribe to a lot of services, but my satisfaction has never been higher because I am getting services with a lot of things I want to watch instead of hundreds of channels I don’t,” said Jack Codon. “When you flip through the channels and run into Sanford & Son, Law and Order, home shopping, and terrible reality show trash, you just get angry because I was paying for all of it. Now I pay Netflix and they spend the money on making more shows I will probably want to watch, as opposed to reruns I don’t.”

McArdle is correct about one thing — we should expect streaming and internet prices to increase, but not because of what she wrote. The real reason for broadband rate hikes is the lack of competition, which allows companies to implement “because we can” rate increases. Netflix itself hinted it may also increase prices incrementally down the road, but not with the intention of rewarding executives and shareholders with fat bonuses and dividend payouts. Netflix wants to pour all it can into additional content development to give customers even more reason to watch Netflix and little, if anything else.

The head of a state-funded group with direct ties to the Massachusetts governor’s office told local officials in New Marlborough that the Massachusetts Broadband Institute (MBI) “believes in cable companies” and is favoring one — Charter Communications, with an exclusive offer to invest millions in taxpayer dollars to entice Charter to bring its Spectrum cable service to town, while telling would-be competitors the money is only available to Charter Communications.

MBI was created in 2008, originally tasked with investing $50 million in state funds to help resolve the digital divide between eastern and western Massachusetts. MBI also manages the publicly owned, middle mile fiber optic network that towns in western Massachusetts are depending on as part of their plans to connect local residents to the internet.

In 2015, MBI suddenly yanked support for WiredWest, the region’s most robust and credible player in connecting residential homes and businesses. The group had spent several years organizing and educating some two dozen largely rural communities, and was well on its way to constructing a public broadband network for the towns that agreed to sign on to the project. Since 2015, a series of political disputes, bureaucracy, and confusion has stalled broadband expansion.

Peter Larkin, MBI’s board chairman, has been roundly criticized in many western Massachusetts communities for continuing MBI’s slow and cumbersome bureaucracy, frequent policy shifts, and most recently playing favorites with cable companies. Ignoring his own organization’s systemic failures and bureaucratic roadblocks, Larkin has recently leveraged community frustration with the slow pace of progress as an excuse to hand two of the nation’s largest cable operators public taxpayer dollars to complete a project MBI was directly responsible for stalling.

Larkin

Under the latest proposal, outlined last Friday, Charter Communications would receive $3.1 million to expand Spectrum cable service to at least 96% of the community of New Marlborough. Originally, the town was responsible for $1.44 million in cost sharing with the state, a substantial sum for a community with a population just over 1,500 residents. Larkin last week offered to split the cost to the town, with the town’s share reduced to $720,000 — payable directly to Charter.

“The state is willing to cut the gap in half to make this project go,” Larkin said.

But that deal appears to be good only if the town selects Charter Communications. Over the last year, MBI has been allocating public taxpayer dollars towards private cable and phone companies, especially Comcast and Charter, to get the companies to agree to expand their cable systems in areas both have ignored for decades. WiredWest’s proposal made towns partners in the project. Larkin’s offer suggests taxpayers should pay up to 50% of the expansion costs, while Charter keeps 100% of the revenue and profits.

In the past, MBI’s financial carrots have been enough to get the two cable companies to expand using state matching funds alone, but as the town’s Broadband Committee Chairman Richard Long told the Berkshire Eagle after the meeting, he thinks this is the first time an unserved town in central or western Massachusetts will have to contribute local taxpayer funds as well just to get service from a cable company.

Larkin’s hard sell for Charter raised eyebrows among some in the town, especially after Larkin offered to use state funds to also finance their $720,000 portion of the deal over as much as a decade. Larkin claimed he wanted to get the project done and wanted to be helpful.

“The state may spend moneys or engage in other activities that benefit or incentivize private businesses in order to promote such [economic] development and it may authorize or partner with its cities and towns to do likewise,” Larkin recently wrote in a letter to towns offering to help them get negotiations going with the cable companies.

Town resident Dave Travis called Larkin’s offer something else.

“Call me a whistleblower, concerned citizen, activist for fairness, justice and democracy, but for Massachusetts Broadband Institute to show such blatant preferential treatment [to Charter] when there are qualified, experienced local options feels like corruption, and it needs some serious daylight,” Travis wrote.

WiredWest’s Tim Newman exposed just how far Larkin was willing to go to bat for Charter.

“Is the generosity you’re presenting to our town on behalf of Charter the same generosity if the town were to build its own network?” he asked Larkin.

“We do believe in the cable companies … we think it’s a value worth leaning in a little bit harder for,” he said, suggesting Charter has the financial ability to complete the project.

“So, the short answer is ‘no’ — the $720,000 would not be available?” Newman pressed.

“No,” Larkin answered.

Charter Communications is taking the city of El Centro, Calif., to federal court for interfering in a dispute between Spectrum and a local TV station owner that has resulted in two stations being blacked out on the local cable system for nearly three months.

Northwest Broadcasting, Inc., has been in a contract extension dispute with Charter Communications over multiple stations, including its two El Centro-area affiliates KYMA (NBC) and KWST (CBS). Charter accuses Northwest of gouging, claiming “Northwest demanded an 80 percent increase in carriage fees, more than double the rate Charter pays any other broadcaster anywhere else in the entire country.”

On March 7, 2018, the City of El Centro got involved and cited the cable operator, alleging Charter violated five provisions of Article X of the City Code, and began fining the cable company $100 a day for each violation, assessed each day the dispute continues.

El Centro accuses Charter of:

• Discriminating against subscribers based on specific protected classes;
• Failure to notify the city and subscribers 30 days in advance of any changes to cable service or rates;
• Failure to establish a time frame to respond to service interruptions;
• Failure to refund customers for service interruptions exceeding a stated period;
• Failure to notify the city and subscribers 30 days in advance of any changes to the cable television channel lineup.

El Centro Mayor Sheryl Viegas Walker: “I’m taking it to the streets. I’m so fed up with [Spectrum’s] disregard for this community,” KYMA in El Centro reports. (3:02)

Northwest Broadcasting CEO Brian W. Brady strongly disputes Charter’s claims, dismissing them as “lies,” particularly surrounding the removal of two El Centro stations from Charter’s lineup after the cable company claimed Northwest refused permission to continue carrying the stations while renewal talks continued.

“Charter accepted the first two extensions which were offered to them, however, they refused the third extension and took our stations off with 10 minutes notice,” Brady said.

Charter’s lawsuit argues El Centro officials have no right to intervene in the dispute, force Spectrum to put the stations back on the lineup, or require Charter to issue refunds to customers for channels that are no longer available to them.

“Northwest’s pulling its authorization for Charter to carry its broadcast signals is not a ‘service interruption’ within the meaning of the City Code provisions in question,” Charter argued in its lawsuit. “Even if it were, while El Centro demands that Charter ‘cure’ its alleged violations, the only means for Charter to do so is to finalize a retransmission agreement with Northwest. The City’s citations are thus intended to pressure Charter to accept Northwest’s unreasonable terms by imposing fines and intentionally damaging Charter’s reputation and harming its goodwill and relationships with its existing and prospective customers.”

Charter argued giving refunds to customers over the lost channels was “contrary to Charter’s terms of service, and in so doing improperly interfere [sic] with Charter’s contractual relationship with its customers.”

Charter is relying heavily on California’s statewide video franchise law — the 2006 Digital Infrastructure and Video Competition Act (DIVCA), heavily pushed by telecom lobbyists a decade ago, which stripped most local authority over cable systems and transferred it to the state government. Charter is using DIVCA’s light touch regulations to support its assertion El Centro officials cannot interfere in programming disputes and that their actions during the dispute have only made things worse.

“The effect of the City’s actions has been to harden Northwest’s negotiating position and make a deal on reasonable terms even more difficult,” the complaint says.

“I have never seen a corporate entity act with such disregard for our community,” said El Centro Mayor Sheryl Viegas Walker. “We have a contract with them that spells out certain steps that they’re required to take if those kinds of changes are going to be made. They didn’t do that. We wake up one morning and we’re suddenly without two major channels.”

“Rather than negotiating in good faith like all other parties would do and what the law requires, Charter has taken a ‘take it or leave it’ approach,” added Brady. “In an effort this week to get this back on track, Northwest submitted a new proposal to Spectrum. Spectrum’s representative communicated that they really wanted to get this resolved, but would not counter Northwest’s proposal and would not respond at all in writing. Odd behavior for a company that claims to be negotiating in good faith. It appears that Charter would rather bully a small municipality than to engage in a good faith negotiation.”

It appears other small cities are joining Brady’s cause, complaining to the Federal Communications Commission that Charter was unfairly profiting from station blackouts. In Crescent City, Calif., city officials accused Charter of charging a Broadcast TV surcharge of $7.50-8.85/month, but didn’t change or adjust rates after the Northwest Broadcasting blackout began.

“Despite the fact the fee is itemized and justified as a pass-through, Charter did not eliminate or reduce that fee, even though it was no longer incurring costs associated with carriage of … at least two network affiliates,” Crescent City officials told the FCC.

The two California cities have also been joined by officials in Yuma, Ariz. and Jackson, Wyo., where Charter has removed Northwest Broadcasting stations as well.

“We have learned that it is no different for numerous municipalities which have been forced to sue Charter to collect the fees that are contractually owed to them,” Brady said. “Most disputes are settled because Charter uses their army of lawyers to outspend the municipalities forcing the municipality to settle on Charter’s terms, regardless of their contractual obligations. It’s no different for their customers who have told us that Charter recently raised the broadcast surcharge fee in spite of the fact that the programs they want to watch are unavailable because Charter removed the programming. Many have asked for refunds only to be told no. What is the customer to do, sue Charter?”

Northwest Broadcasting Owned and/or Operated Television Stations

KPVI-TV in Pocatello, Ida. was widely seen in parts of Wyoming over Charter Communications until the station was blacked out in a contract dispute. Now viewers want to see Charter fined. (1:11)

Charter officials claim there was insufficient time to notify subscribers about the loss of Northwest Broadcasting stations from the TV lineup, but Jackson, Wyo., officials noted Charter bought a new domain name reflecting the contract dispute at least two weeks before stations like KPVI were blacked out. (1:02)

Jackson city officials question a Charter representative about refunds for customers paying surcharges for broadcast TV stations no longer on Charter’s lineup. (0:57)

How to File a Petition on this Issue with the Federal Communications Commission:

This petition allows for public comment until April 16, but the FCC requires some special steps for individuals wishing to file comment. Below is a list of the requirements to file a public comment with the FCC regarding Charter Communications:

• Members of the public who wish to comment should do so on or before April 16, 2018.
• Filing should be submitted to the FCC via the electronic comment filing system (ECFS).
  • That system is accessible at https://www.fcc.gov/ecfs/filings.
  • A member of the public should type his or her comments and save them.
  • At the top of the ECFS page, select standard filing and in the “proceedings” box, type 18-91 (the proceeding is MB Docket No. 18-91).
  • Fill out the remainder of the boxes with information that is required (some information is optional).
  • At the end of the form, there is a box where saved comments can be uploaded.
• Comments that contain statements of fact (for example, “Here is what happened to me”) should be supported by an affidavit.
• “Comments or oppositions shall be served on the petitioner and on all persons listed in petitioner’s certificate of service…” The petitioners here are the Cities, and the certificate of service is at the end of the communities’ filing, which can be downloaded from https://www.fcc.gov/ecfs/filing/1032236683943.

A company is testing a solution to video subscription password abuse that will register each device authorized to access streaming video, while giving customers a Forever Login, ending the need to regularly re-enter usernames and passwords to watch.

Synacor is responding to growing concerns from some in the cable industry that subscription television password sharing is allowing unauthorized access to content viewers did not pay to view. The new system is an attempt to upgrade the authenticated TV Everywhere experience to reduce subscriber inconvenience while locking down the number of concurrent devices allowed to view online content.

Currently, when a customer accesses subscription-required content online, they are asked to select their TV provider and then enter their assigned username and password to verify they are a current subscriber to a video package that includes that network. Once authenticated, the network’s website controls how long user credentials are kept before they must be re-entered, as well as how many concurrent viewing sessions from multiple family members are permitted.

TV Everywhere services were originally designed to allow the subscriber and anyone else living within the home to be able to access networks like CNN, HBO, ESPN, and others on portable devices in-home and while on the go. But many customers also share their user credentials with extended family members and friends who do not live at the same address. Unauthorized third parties also occasionally obtain user credentials through brute force hacking and sell them on the black market. The subscriber usually only discovers a security problem with their account when they reach the concurrent viewing limit, which displays as an on-screen message stating the maximum number of viewers are already watching content through a subscription and at least one must disconnect before a new stream can be viewed.

Cable company executives hold a variety of opinions about the seriousness of password sharing. Altice and Comcast, and programmers like Time Warner, Inc., which owns HBO and Cinemax, have not shown much concern about the practice, but Charter/Spectrum executives have, and are leading the charge to lock down subscriber authentication.

Synacor’s new system introduces a new layer of cable company-defined limits on streaming: registering each device allowed to view content as well as checking how many people are attempting to stream content simultaneously.

Under the new system, a customer will be permitted to register a limited number of “trusted devices” allowed access to streamed video content. A cable company, for example, could limit subscribers to two smartphones, one tablet, and one smart/internet-enabled TV or Roku box. Even if the subscriber has other devices, they would have to unregister an existing device before being allowed to register a new one. Additionally, a cable operator could limit concurrent streams to two or three, either per network or per account, regardless of what networks are being watched. That would mean, in one example, a family of four would designate a maximum of five “trusted devices” and be allowed to watch up to three concurrent streams per account. “Bill” could watch ESPN on the bedroom television, “Mary” could watch a murder-mystery on the Hallmark Channel on her tablet on the patio, and “Dylan” could watch a movie on HBO on his phone at the same time. But if “Sara” decided to watch a show on Lifetime on her phone, the system would block the request.

In the past, it was likely all four family members could watch concurrent streams of their shows on virtually any device they like, and they could also share login credentials with “Jeff” — a family member at college, who in turn shared his username and password with the other people living in his dorm room — exactly the kind of thing Charter CEO Thomas Rutledge would like to stop.

Synacor claims its new system is still a positive for consumers because it allows user credentials to be stored in perpetuity, ending the need for frequent logins to re-verify and re-authenticate one’s account, regardless of where they are. Synacor’s executive director of identity services, John Kavanagh, suggests it is a win-win for companies and consumers.

“They wanted to deliver the same user experience benefit…and we brought the trust along with it with device registration,” Kavanagh said. “The end-user experience of home-based authentication really set a high bar. They wanted to take that high bar and extend it elsewhere.”

But many subscribers, especially those with larger families, are likely to balk at the new restrictions, especially if cable operators offer to ease them in return for additional fees. The process of registering devices is also likely to be seen as cumbersome by those not technically proficient, as well as those who own a large assortment of electronic devices.

Multichannel News reports a recent study from Hub Research and CTAM that monitors the TV Everywhere market surveyed 3,491 TV subscribers who watch at least five hours of television a week and discovered 28% claimed that password sharing with friends and family members was okay and permitted by their provider, although generally it is not. Another 33% believed password sharing was allowed for family members who have since moved out of the family home and live elsewhere. No provider authorizes such viewing.

The cable industry generally does not mind password sharing for family members who are traveling or attending school and live outside of the home in a dorm, or watching on a device that belongs to a friend. They do mind if that friend keeps the user credentials and watches programming without their own subscription.

Kavanagh claims the biggest concern is “commercial-level” black market sales of user credentials to third parties who have no relationship to the account owner.

“Once we’re able to register that device securely as part of the sign-in flow, we then connect that with a complete list of devices that have been used with a given subscription,” Kavanagh said. “We not only expose that master list to the end user for their own benefit on things that might be suspicious, but on the operator side, it gives them a depth of awareness they haven’t had before. It allows them to have a fine instrument to enforce their business rules and security policies.”

Both customers and cable operators can see who is currently accessing content using their account and cancel authorization for device(s) they no longer own, lost, or are being used by those who do not have an association with the account holder at all.

The new system is being introduced on an experimental basis to some current customers, starting with Service Electric Cablevision. It is likely similar rollouts will happen with Synacor’s other clients, which include:

• Streaming Services: Sling TV, PlayStation Vue, HBO
• Telco TV: AT&T, Cincinnati Bell, Verizon, Windstream, CenturyLink
• Fiber/Cable TV: WOW!, Armstrong Cable, Atlantic Broadband, Cable One, Mediacom, GCI, Hotwire Communications, Charter/Spectrum, Grande Communications

The Federal Communications Commission is pushing hard to free up additional spectrum in some unlikely extremely high frequency ranges — some at 95 GHz or higher, for the next generation of wireless services.

Just a year ago in 2017, the FCC wrapped up its latest spectrum auction for the higher end of the UHF TV band, to be repurposed for mobile service use. But now the agency is seeking to find and reassign underused spectrum in much higher frequency bands that could be used for services like 5G wireless, machine-to-machine communications, intelligent road and vehicle networks, and other uses yet to be invented or envisioned.

FCC Commissioner Jessica Rosenworcel made it clear that smart spectrum allocation was critical for next generation wireless services.

“The point is the list is long — and we are looking at midband and millimeter wave to power the 5G future,” Rosenworcel said. “The propagation challenges are real, but so is the potential for capacity with network densification. Of course, what we need to do next is get these airwaves to market and unconditionally hold an auction this year.”

The FCC is contemplating auctions covering these frequencies in 2018:

3.5 GHz

Widely expected to draw the most interest, the Citizens Broadband Radio Service band was originally intended primarily for unlicensed users, but the wireless industry has lobbied heavily to get much of this spectrum reassigned for traditional long-term licensed use. Although very high frequency, the 3550-3700 MHz “innovation band” will have plenty of wide range of frequencies open for wireless data and mobile services. The wireless industry wants to deploy LTE service on this band, but they will likely compete with cable operators that are seeking their own stake of frequencies to launch their own wireless services.

This band will likely support last mile wireless connections at gigabit speed, fixed wireless broadband, and even in-home Wi-Fi that is significantly better than what you have now.

Because the band is so attractive, several different users are competing over who will be portioned what spectrum. The cable and phone companies want more for themselves, but other users, including consumers, want to reserve enough spectrum for unlicensed applications. The concern is deep pocketed companies may crowd out innovators and start-ups.

3.7 to 4.2 GHz

Some consumers may have accessed services on these frequencies without ever realizing it. This is the home of the “C-Band,” recognizable to any home satellite dishowner of the 1980s and 1990s. This range of frequencies is set aside for line-of-sight, very low powered satellite television — the kind that used to require a 10-12 foot wide satellite dish in the backyard to receive. FCC Chairman Ajit Pai wants to open the band up to be shared with 5G wireless broadband, which has caused considerable controversy among satellite users who fear devastating interference.

There are proposals and counter proposals from the satellite industry and wireless companies over how to manage sharing this band. Most are coalescing around the idea of sequestering 100 MHz of spectrum at the low-end of the band and using 3700-3800 MHz for high-speed wireless broadband. Some want satellite operators to clear out of this section of frequencies voluntarily, others propose compensation similar to what was given to television stations to relocate their channel positions. Google is pushing for a plan that would offer mobile 5G service in large urban areas and 25 Mbps – 1 Gbps fixed wireless broadband in rural and residential areas.

But satellite companies and many satellite users are fearful of the impact of interference. Because satellite signals use very low power transponders on the satellite, ground based wireless broadband interference could wipe out satellite reception.

Tom Taggart, who owns several radio stations in West Virginia, says sharing spectrum was tried before and did not work well.

“This band, years ago, was shared with AT&T and other telcos for point-to-point long-distance links. Fixed, licensed paths that could be plotted and protected against for satellite installations,” Taggart told Radio World. “Our studios are 1,500 feet from an old MCI tower, at one time we had a metal screen behind our satellite dish to protect against ‘back-scatter’ from a path aimed away from us. Still, we had to convince MCI to shut down one channel so we could pick up a program from Premiere [a radio network distributing programming on satellite].”

Some industry plans propose registering C-Band satellite dishes, at a cost of $600-$1,600 per site, which would allegedly protect them from interference by requiring wireless broadband services to steer clear of the area.

“But I am not even sure what kind of broadband services are proposed,” Taggart said. “One might assume these would be omnidirectional sites, like a typical cell site. Even with some clever computer-engineered directional patterns, reflections off hillsides, billboards, buildings would be enough to overwhelm the tiny satellite signal. However, other articles described these services as ‘mobile.’ Even if my dish is registered, how can I resolve interference problems from a mobile device?”

The debate rages on because the frequencies involved, next to the even more popular CBRS band, are highly coveted.

4.9 GHz

After the events of 9/11 in 2001, the FCC has prioritized public safety communications, in hopes of improving the interoperability of different first responders’ portable radios. At that time, fire agencies could not easily talk to police, ambulance crews, or in some cases other fire crews arriving from different departments miles away.

Many agencies contemplating use of this band discovered equipment that supported 4.9 GHz was hard to find and extremely expensive. Most public safety agencies seeking grants or other funding to improve their communications equipment opted to transition to digital P25 networks that operate on much lower frequencies and use equipment that is now widely available and, in comparison, much cheaper. Many agencies are conservative about using new technology as well, concerned a communications failure could cost the life of a fire or police responder. As a result, of the 90,000 organizations certified for licenses in this band, only 3,174 have been granted. That represents a take rate of just 3.5%. The band, as one might expect, is effectively dead in most areas, underutilized in others.

“As the demand for wireless services continues to grow, it is imperative that the FCC takes steps to ensure underutilized spectrum bands are used efficiently,” said FCC Commissioner Mignon Clyburn. “This is as true for spectrum allocated to public safety as it is for the bands used to support commercial wireless broadband services.”

FCC Commissioner Michael O’Rielly is convinced wireless companies like AT&T and Verizon could use the frequencies more efficiently.

“It has been 16 years since the 4.9 GHz band was allocated to the public safety community, and it is still woefully underutilized,” said O’Rielly. “That is not sustainable in an environment in which every megahertz of spectrum, especially below 6 GHz, needs to be fully scrutinized and maximized in quick order. While the Commission’s original allocation was more than likely well-intentioned, it is way past time to take a fresh look at this 50 megahertz of spectrum.”

Although higher than 3.5 GHz, engineers believe there is a very credible case to be made to use the available spectrum for 5G fixed wireless services, delivering broadband at speeds up to 1 GHz from a small cell located nearby. It would have to be. At these frequencies, virtually anything blocking the line-of-sight between the antenna and the user will block the signal as well. With almost no constituency defending the 4.9 GHz turf, it is expected it will be repurposed for wireless broadband in areas where it isn’t in use for public safety communications.

24/28 GHz

Although the 28 GHz band has many licensed users already, the 24 GHz band does not, and the wireless industry is interested in grabbing vast swaths of spectrum in this band for 5G home broadband. Known as “millimeter wave spectrum,” these two bands are expected to be a big part of the 5G fixed wireless services being planned by some carriers. Verizon acquired Straight Path late in 2017, which had collected a large number of licenses for this frequency range. Today, Verizon holds almost 30% of all currently licensed millimeter wave spectrum, an untenable situation if you are AT&T, T-Mobile, or Sprint. T-Mobile has been the most aggressive seeking more spectrum to compete with Verizon in this frequency range, and has purchased almost 1,150 MHz covering Ohio for use with a 5G project the company is working on.

39 GHz

FiberTower, now owned by AT&T

This band might as well be called “the controversial band” because AT&T made moves on these frequencies even before the FCC got around to discussing an auction for this band, likely also to be used for 5G fixed wireless. FiberTower originally held hundreds of licenses for wireless spectrum for several years, but did little with them, leading to suggestions the company was either hoarding the spectrum to resell to someone else or was incapable of deploying a network that used the frequencies. The company declared bankruptcy in 2012, eventually emerging in the spring of 2014 just in time to watch the FCC uphold the decision of its Telecommunications Bureau to cancel 689 of FiberTower’s licenses for failure to use them.

In February 2018, AT&T completed its acquisition of FiberTower for $207 million. According to AllNet Insights & Analytics, AT&T acquired more than 475 of FiberTower’s 39 GHz spectrum licenses, raising eyebrows among shareholders who lost their investments in FiberTower after it declared bankruptcy. Hundreds of the spectrum licenses that came with the AT&T deal were given a value of $0.00, allowing AT&T a sweetheart deal and shareholders hoping to recover more money from the bankruptcy liquidation extremely upset. In fact, had FiberTower remained in bankruptcy, it would eventually have surrendered all of its licenses, which would then be put up for auction by the FCC and would likely command much higher value among bidders. Verizon effectively paid triple the price for what AT&T got for a song in the FiberTower acquisition. Even more remarkable, the FCC approved the acquisition by AT&T despite the obvious fire sale price, and has ignored the consequences of what could come from an AT&T/Verizon duopoly across large swaths of 5G frequencies.

Eshoo

That brought a rebuke from Rep. Anna Eshoo (D-Calif.) who accused both Verizon and AT&T of flipping public property for private gain.

“The FCC’s policies unambiguously required Straight Path and FiberTower to forfeit their unbuilt spectrum licenses,” Eshoo wrote. “But rather than auction the reclaimed spectrum and promote timely deployment, the FCC’s Wireless Telecommunications Bureau reached ‘resolutions’ with Straight Path and FiberTower than allowed them to profit handsomely from their wrongdoing. Following the ‘resolution,’ Straight Path sold its assets to Verizon for nearly $3.1 billion, and FiberTower is estimated to have sold its assets to AT&T for roughly $2 billion.”

In reality, AT&T acquired FiberTower for $207 million — a fraction of the amount of the estimated value of the spectrum Eshoo used in her estimate.

“The Bureau’s decisions also further concentrated critical input resources in the hands of the two dominant wireless incumbents,” Eshoo continued. “The purchasers of the public assets that Straight Path and FiberTower once held, Verizon and AT&T, already control a disproportionate amount of other critical spectrum available for immediate deployment. Up until recently, the industry had an imbalance in favor of these companies in low-band spectrum that lasted for decades. The FCC now risks going down the same wrong path with high-band spectrum should the Commission continue down this course. Allowing Straight Path and FiberTower to ‘flip’ public assets for private gain does nothing for taxpayers, but does much to further entrench the dominant incumbents’ longstanding spectrum advantage over their rivals.”

95+ GHz

The FCC has not regulated frequencies above 95 GHz, but as technology advances, there is growing interest in utilizing spectrum that many believed would be essentially unusable for communications services. Right now, most frequencies in this range are used by environmental satellites and radio astronomy. At these frequencies, signals would be absorbed by the skin and attenuated significantly by things like high humidity’s haze or fog. Still, there are proposals under consideration to open up a small portion of spectrum for unlicensed home users for things like indoor wireless routers.

The key policy priority here will be to protect existing users from any hint of interference. But with vast amounts of unused frequencies in this range, it shouldn’t be difficult to keep competing users apart.