Virtually certain: Almost no deployment of 5G highband to rural areas anytime soon. The CEO of AT&T personally came to D.C. to make an absurd argument for protecting very high pricing for rural backhaul, absolutely the right policy choice.
He told Commissioner Mignon Clyburn "the decision to regulate prices for business data services (“BDS”), particularly fiber-based BDS, will deter incentives for the rapid deployment of 5G wireless technology in rural America."
Everyone knows that AT&T is not going to deploy meaningful amounts of 5G wireless technology in rural America for at least a decade and probably longer. Millimeter wave has a very short reach. Verizon is hoping to get 500 feet. That means an enormous number of cells are required, literally millions for a wide U.S. rollout. It's a sure money loser for a very long time except in dense areas.
On Friday, August 19, 2016, Randall Stephenson, Chairman & CEO, AT&T, James Cicconi, Senior Executive Vice President, AT&T External & Legislative Affairs, and Robert Quinn, Senior Vice President, AT&T Federal Regulatory, met with Commissioner Mignon Clyburn. During that conversation, AT&T discussed how a decision to regulate prices for business data services (“BDS”), particularly fiber-based BDS, will deter incentives for the rapid deployment of 5G wireless technology in rural America. AT&T filing, pictured in full below.
Nick Del Deo of MoffettNathanson just did an excellent report on small cells and 5G, pointing out the financial issues in less dense areas. Lowell Mcadam of Verizon plans the fastest rollout of 5G anywhere in the world - all in urban areas. I've sat through about 60 hours of lectures on 5G, many from the top technical people in the industry. I've read at least hundreds of pages of technical and policy papers. I can't recall a single mention of substantial rural deployments. I bet if I found an AT&T executive discussing the subject they'd say the same thing.
Commissioner Clyburn probably was too polite to look Randall in the eyes and ask, "Exactly how much will you increase 5G in rural America, when?" As head of a $100B company, with an influence budget well over $100M, Randall is one of the most powerful men in the world. She knows to watch the Federal purse when lobbyists talk of "incentives," a euphemism for profits. She wants results.
The results over the last twelve years prove Randall and team - Ralph de la Vega, John Stankey, John Donovan and half a dozen rising stars - are perhaps the best managers in world telecom. They've made some very smart decisions, including canceling a deal to buy an Indian company that was budgeted for. He realized India, with 12 carriers, was inevitably a bad deal; Reliance's $7.40/10 gigabytes will put half of them out of business. They've made some very tough moves, including the current plan to shave 80,000 jobs in the next few years. Randall has taken an important moral stand at the Boy Scouts, where he now is President.
The U.S. Broadband Plan in 2010 recognized that high rural backhaul prices are a part of the rural high cost problem. Local monopolies and cartels often produced prices of $100/megabit or more compared to about $3 in almost any city. I ran some numbers for an FCC Workshop; in many parts of the country, backhaul is the biggest issue for decent rural broadband.
I remember virtually begging Blair Levin to do something about it in the plan. My suggestion was the FCC review the market if backhaul prices in an area were more than 4x the national average. He couldn't; the White House had essentially ordered the FCC not to go to war with the phone companies during the economic crisis. Ending that giveaway, largely going to the Bells, would have saved a chunk of the $30B or so we've spent since then out of the Universal Service Fund.
Lobbyists have the same relationship to truth as politicians, only more so.