Image may be NSFW.
Clik here to view.
Mike Dano recently wrote an article for LightReading that talks about the plummeting value of 5G millimeter wave spectrum. The FCC started the process of auctioning this spectrum in 2018, and Verizon, T-Mobile, Echostar, AT&T, and smaller carriers paid almost $10 billion for the 24 GHz millimeter wave spectrum. The unique aspect of the auction was the huge size of the channels and the first auction offered two blocks of 425 MHz, while the second auction offered seven blocks of 100 MHz.
At the time, this was touted as the spectrum that was going to supercharge 5G. Verizon launched a public trial using the spectrum in 2019 in downtown Chicago and Minneapolis. Customers with special phones enabled for the new spectrum were able to get speeds of 500 Mbps. Soon after, there were more trials in more cities by multiple carriers. You may remember the TV commercials at the time showing gigabit speed tests on cellphones.
Unfortunately, the trials showed the real-world limitations of the millimeter wave spectrum. The signal didn’t carry far, and small cell sites were needed every few thousand feet to provide coverage. While the spectrum could bounce off buildings to extend coverage, any object in the direct path of a cell tower blocked the signal, even the human body and glass windows. It also became quickly clear that, other than the novelty of being superfast, cell customers had no real need for gigabit speeds which greatly exceeded the computing capacity of cellphones. The real issue that made this unfeasible was the cost of a network. In this same time frame, carriers were all collectively touting they would deploy a half million small cell sites, but that effort died quickly when it became clear that there wasn’t any new revenue stream to pay for the new networks.
Interestingly, the rest of the world never put much faith in millimeter wave spectrum. Currently, many phones in the U.S. can still receive this spectrum band, but it’s not included in phones sold in the rest of the world.
Carriers have started the process of walking away or devaluing the millimeter wave spectrum. In July, T-Mobile walked away from 520 licenses for the spectrum, something that is almost unheard of in the carrier world. UScellular recently cut the value of the spectrum by half in its books.
This is not to say that there is no value in the millimeter wave spectrum. Verizon thinks this is the right spectrum to use in places like stadiums and other crowded outdoor venues. This is also a powerful spectrum to use indoors to carry gigabit speeds. The need of the millimeter wave spectrum became obsolete for cellular when the FCC auctioned C-Band spectrum in 2021, which behaves much better outdoors.
This is not the first spectrum sold at auction to be a bust. For example, the FCC auctioned Multipoint/Multichannel Distribution Service (MMDS) spectrum in 1995 and 1996. This was spectrum between 2.3 – 2.5 GHz that was touted as wireless cable TV. In the U.S. this was auctioned in 31 separate 6 MHz channels, each intended to carry one channel of cable TV. A handful of small cable companies made this work, but the idea quickly lost interest when channel lineups grew to hundreds of channels. The most memorable thing about this spectrum was a number of scams where license holders resold the spectrum to unsophisticated buyers.
The FCC also auctioned Local Multipoint Distribution Service (LMDS) spectrum in 1998. This was spectrum in the 27.5 – 31.3 GHz range that was touted as the future of point-to-multipoint wireless. The first gear was promoted as theoretically being able to deliver up to 100 Mbps for 1.5 miles, a remarkable speed at the time. However, the spectrum quickly fell out of favor when only a few vendors tried to market the radios – and all of the radios had been rushed to market and had big problems when deployed to customers.
