Will T-Mobile/Sprint’s Merger Plan for 5G Home Broadband Work without Significantly Higher Capex?
The 3/6/19 FCC Filing by T-Mobile attempts to recharacterize how the merger “benefits” the consumer by expanding fixed or nomadic wireless broadband service. The filing suggests that T-Mobile will utilize the combined assets of the two companies to provide an alternative to home wired broadband in LTE in the near term and 5G in the future. This is a laudable goal; however, T-Mobile’s filing lacks a significant number of concrete details.
There are no shortage of claims about how wide and how fast the service will be, but barely any concrete details about how they technically intend to pull it off other than a single expert’s statement that the they reviewed the proposed concept and feels that T-Mobile and Sprint’s network is up to the task without detriment to the underlying wireless subscribers. However, there are no numbers or documentation supporting these conclusions in the filing.
The FCC has stopped the review period pending comments for 30 days. With T-Mobile providing nominal actual evidence of their claims, how can the average (or even intelligent) commenter question or comment the purported network’s benefits? It seems like this filing is an attempt to appeal to government officials who favor reducing the Digital Divide but may not know enough to question whether T-Mobile/Sprint’s merger will or will not significantly reduce the divide.
There is no doubt that adding Sprint’s 2.5Ghz spectrum to T-Mobile’s 600, PCS, AWS spectrum will enable additional capacity while expanding coverage. However, 2.5 GHz requires three to three-and-a-half cell sites to cover the same area as 600MHz. Conceptually, the 600MHz will be used for wide area coverage and 2.5 GHz for capacity. The issue is that T-Mobile’s rural cell sites weren’t designed for 2.5GHz, and Sprint virtually stopped building new rural sites years ago. While 600MHz will be suitable for LTE-A and other technologies, it also handles less capacity than 2.5GHz. Thus, our questions:
- What type of service will T-Mobile be able to support with its existing macrocell network?
- Will the higher speeds and capacity be reserved only for those users living within the 2.5GHz coverage areas (With or without HPUE)?
- Will the combined network support the additional burden of wireless broadband to the home? Or will it require a substantial amount of new macrocells in unserved and underserved areas to support broadband to the home, which, as T-Mobile claims, will be provided above and beyond what they have already agreed to provide to wireless consumers?
- While T-Mobile is promising not to impact their current service levels to existing wireless subscribers, will the addition of home broadband limit future service upgrades to wireless consumers? (Put another way, is T-Mobile trading future wireless expansion and improvement for better home broadband service?)
- How many people will use the service? And what caps will there be on the service? AT&T’s 5G service is limited to 15GB/month in urban areas, and their 4G LTE-based fixed wireless broadband in rural areas is capped at 215GB. However, they only provide it in specific areas.
- What assurances will T-Mobile be willing to give to the end user? With the number of users inversely impacting available capacity, will there be guaranteed uptime and speeds? Or will this be like satellite broadband, where it is either significantly more expensive to use in the day or just outright too slow?
- What good is the promise of rural broadband if only so many people can sign up for it and only if close enough to a macrocell? I would agree that something is better than nothing- but is this factor alone enough to justify approval of an otherwise anti-competitive merger?
- To further complicate the issue, how will rural sites be capable of handling the required backhaul to support service that is used at home and is four to five times faster than what T-Mobile currently provides under LTE? Even if we assume that ¾ of T-Mobile sites are connected to fiber, the majority that aren’t connected are assumedly in rural areas- i.e. the areas where the digital divide is most prevalent. Will the existing backhaul be enough? If not, will new fiber or microwave backhaul be needed?
- If they approve the merger, will the FCC mandate conditions on coverage, speed, caps, and availability? Will they limit future rate increases to prevent T-Mobile from setting arbitrary low rates now but ultimately increase the rates in areas where they have no competitors?
- If the FCC and Department of Justice allow the merger and place conditions on the combined company to meet minimal levels of service to consumers for fixed or nomadic broadband, will that reduce the 35,000 duplicative sites that T-Mobile claims they will be able to decommission (or increase the 10,000 new sites they say will be built) if the merger is approved?
The filing seems to raise more questions than it answers. While having additional broadband providers available to consumers is an admirable goal, especially in underserved areas, the filing seems short on details and technical specifications that would allow independent commenters to be able to evaluate the merits of T-Mobile’s claims.