Complete! Fall 2016 Mobile Field Testing

Thank you to the field test drivers from Cal State University, Chico and Cal State University Northridge for finishing this 10th round of mobile field testing. Thanks also to CSU Chico's Geographical Information Center and CSU Monterey Bay's School of Computing and Design for their continued support for this innovative project.

As always, we will be posting summary data on the CPUC's website once it becomes available.

Hello Wireless Loops. Goodbye Fiber? (Part 2)

Last week, I posted three scenarios examining AT&T's mobile LTE coverage of high cost-eligible homes under the FCC's Connect America Fund Phase II program. That analysis assumed AT&T would be using their existing mobile network and licensed LTE spectrum...

Turns out, that was a rosy assumption.

Since last Friday, I received more information from Steve Blum about AT&T's plans to deploy wireless local loops (thanks, Steve!). Rather than revisit the issues, I want to make some corrections and comments to my previous post.

1. AT&T plans to deploy a new technology for wireless local loops whose "success in the marketplace is thus unproven." (paragraph 51 of their SEC 425 filing). For more, see #1 below.
2. Rather than use licensed LTE spectrum, which includes the incredibly valuable 700 MHz band, it appears AT&T will be using a higher frequency (2,300 MHz, or 2.3 GHz), which requires line of sight between cell tower and customer location. For more, see #2 below.
3. Other risks include spectrum constraints on the number of subscribers who can use the service simultaneously during peak usage, and this "reduce[s] the prospects for a successful rollout by AT&T of fixed WLL as a standalone product." For more, see #3 below.

1. Did AT&T Say They'll Need More Cell Sites? 

Group President and Chief Strategy Officer John Stankey's testimony, which is part of AT&T's Form 425 filing for the DIRECTV acquisition, states: "A fixed [wireless local loop] service requires substantial upfront investments. AT&T must install additional antennas and other equipment at each cell site in areas it seeks to serve." (paragraph 50). 

There's no mention of needing more cell sites. 

Modifying existing cell sites is one thing. Acquiring, permitting, and building new sites is completely different. As one El Dorado County supervisor says, new sites are very controversial because of their "aesthetic downside." Aside from having to find property and possibly develop it, there's the sticky problem of getting community buy-in for more cell towers. 

If AT&T plans to use a higher frequency like 2,300 MHz for wireless, they will need to add cell sites. That takes time. Finding additional sites, much less building new ones, will have a significant impact on AT&T's ability to deploy wireless local loop services in a timely manner. It also puts more pressure on local governments to expedite site approvals. 

How many new sites are needed? To get an idea, here is AT&T's presentation to the El Dorado County Board of Supervisors. AT&T estimates they'll need to modify 4 cell towers and add 34 new locations -- either collocated on existing buildings or newly constructed cell sites. 38 locations seems insufficient to serve all of El Dorado County’s high cost-eligible CAF II households, so maybe this is the first phase in AT&T’s five-year rollout. 

2. Frequency Matters 

There are solid engineering arguments why 700 MHz is more valuable than 2,300 MHz for delivering wireless broadband to homes. I’ll address only the line of sight argument. The larger-wavelength 700 MHz frequency penetrates buildings and foliage better than the shorter-wavelength 2,300 MHz frequency. For 2,300 MHz service to reliably deliver broadband, there needs to be line of sight, meaning you can physically see, without obstruction, between cell tower antenna and customer antenna. Without line of sight, service will be less reliable than with 700 MHz. Many parts of rural California are mountainous and have trees, which makes line of sight broadband difficult and expensive to deploy.

Home in El Dorado County with Trees Obstructing Line of Sight

  

Diagram showing line of sight wireless broadband. No obstructions allowed.

Diagram showing non-line of sight wireless broadband, e.g. 700 MHz

 

Credit: L-Com Connectivity, www.L-com.com 

3. Is Wireless Local Loop Service Viable Without Video? 

AT&T’s Form 425 testimony mentions the importance to their revenue stream of bundling broadband (through WLL, U-Verse, or their fiber product, GigaPower) with video (through DIRECTV), voice, and even mobile. As John Stankey stated, capacity constraints reduce the prospects of WLL as a viable standalone service. Put another way, WLL might be financially viable only if a subscriber opts to subscribe to video and/or mobile as well.

The prospect of adding new satellite and cable television subscriptions is dubious in today’s marketplace. One study claims that more than 40% of satellite and cable subscribers are planning on cutting back or dropping their pay TV service. Broadband data from the CPUC's 2013 annual report on the Digital Infrastructure and Video Competition Act indicates that California's state video franchise holders now provide more broadband service than video service.

That doesn’t bode well for AT&T’s DIRECTV subscribers, some of whom may be switching to over-the-top services like Netflix or Amazon Prime and require only a reliable internet connection to watch shows. To underscore that point, AT&T's Form 425 filing for the DIRECTV acquisition includes an economic assessment, which states "higher Internet access speeds will erode the traditional advantage that DIRECTV's satellite network has given it" over video on demand providers like Netflix. (page 54)

More on AT&T’s proposed WLL broadband service (from the El Dorado County video):

• Broadband speeds must meet or exceed 10 megabits per second down and 1 up
• Latency should not exceed 100 milliseconds
• Initial minimum usage allowance of 150 gigabytes per month
• Monthly rates must be comparable to fixed wireline urban rates for the same level of service in urban areas or at or below the FCC Annual National Rate Benchmark (approx. $72/month)
• AT&T must meet specified deployment milestone dates by state
• 40% built by year-end 2017
• 60% by year-end 2018
• 80% by year-end 2019
• 100% by year-end 2020-21

Week 4 Testing: 82% Complete

Our testers are nearly finished with the 10th round of statewide field testing with 82% complete as of last Friday. Here's a map of the completed locations in red, and those still needing to be tested in blue:

Hello Wireless Loops. Goodbye Fiber? (Part 1)

Wireless Loops As Copper Substitute
There have been reports that California's largest local exchange carrier and Connect America Fund Phase II recipient, AT&T California (maps of California's CAF II areas), plans to use wireless loops to deliver broadband to high cost-eligible households -- in other words, use mobile (i.e. "wireless loops") as a substitute for copper telephone lines to offer speeds of 10 megabits per second down and 1 megabit per second up or faster (10/1). How the FCC measures AT&T's progress in deploying wireless 10/1 could greatly influence the level of investment AT&T needs to make. This post analyzes several scenarios where AT&T uses mobile LTE spectrum to deliver wireless loops. Read Part 2 for corrections and comments to this analysis.
(photo credit: Owen Rochte)

Background
Last year, AT&T, Verizon, Frontier, and Consolidated agreed to receive from the FCC, collectively, $105 million annually for five years to upgrade California homes so they can get at least a 10/1 connection to the internet. The federal program that pays for this is called Connect America Fund Phase II (CAF II), and it is funded by surcharges on our telephone bills.

Fiber Optic Reality Check
As we enter the last quarter of 2016, it's time for a reality check. For those of you living in CAF II high cost areas (primarily rural California) who've been holding out hope for fiber optic broadband access to your home, you may be waiting in vain. That's because CAF II doesn't pay enough for fiber to the home, and carriers are not obligated to build fiber to the home. Furthermore, once the CPUC's California Advanced Services Fund runs out of money, there's arguably no funding mechanism, either federal or state, to bring fiber to rural California homes. 

Can Mobile Deliver?
If engineered as a wireline substitute, mobile can deliver 10 megabits per second downstream and 1 megabit per second upstream (10/1) to the home. The question is what will be used as proof that AT&T's 141,000 CAF II-eligible homes have been upgraded to receive that level of service? We know from mobile field tests that mobile speeds are highly variable from one moment to the next, so in order to deliver a reliable 10/1 service, AT&T may need to augment their network to deliver considerably faster speeds on average. Refer to the CPUC's comments to the FCC on GN Docket No. 15-191 regarding the highly variable nature of mobile broadband and the importance of accounting for reliability when measuring broadband speeds.

The "LTE" Indicator On Your Phone Doesn't Mean Fast Speeds
The FCC has made available to the public some of AT&T's mobile broadband deployment data. Unfortunately, speed data are missing. What remains is a file showing areas with access to LTE (4G "Long Term Evolution") service, as well as other, lower levels of service. We know from experience that mobile coverage shrinks as speeds increase, so it's impossible to tell how large a 10/1 service area extends across California.

Three CAF II Wireless Loop Scenarios 
If AT&T is going to use LTE wireless loops (i.e. home broadband access over the mobile network), here are three initial takes on how many CAF II-eligible households are theoretically covered today using various data sets. Based on these scenarios, AT&T has to make either very little investment to offer 10/1 service to their CAF II high cost households, or they have to make a significant investment. The answer hinges on what validation method the FCC uses to ensure AT&T has met its CAF II obligations to offer 10/1 or faster.

• Scenario 1: FCC 477 Deployment Data - Using the December 2015 deployment data AT&T filed with the FCC, 85% of AT&T's CAF II high cost households have LTE coverage. Note that "LTE" is not the same as 10/1 or faster. However, if the FCC were to use 477 data as proof of meeting CAF II obligations, AT&T could conceivably claim subsidies for most of the 141,000 high cost households without doing any network upgrades.
• Scenario 2: Interpolated Average Speed Data - Based on interpolated average speeds from Spring 2016 mobile field testing, over half of AT&T's CAF II high cost households appear to have access to speeds of 10/1 or faster.
• Scenario 3: Interpolated Mean Minus 2 Standard Deviations - Using this stricter standard, where we reduce the average speed at each of the 1,990 field test locations by two standard deviations and create an interpolated surface using those adjusted speeds, nearly all of the 141,000 households appear to remain CAF II eligible. This suggests that AT&T would need to make a significant investment in their mobile network to deliver a reliable 10/1 or faster service to their high cost households.

Conclusion
Of these three scenarios, the answer to how much additional coverage is necessary is likely to be somewhere between scenarios 2 and 3, because scenario 1 is does not rely on a speed threshold, but rather simply the presence of LTE service. "LTE" offers a wide range of speeds, including zero kilobits per second. For the sake of reliability, the FCC should implement a robust mobile measurement program, such as CalSPEED, to verify AT&T has met its CAF II obligations using wireless loops.

Scenario 1: FCC 477 Deployment Data: 85% LTE Coverage

  
Scenario 2: Interpolated Average Speed Data: 57% High Cost Households with 10/1 or Greater

Scenario 3: Interpolated Mean Minus 2 Standard Deviations: No Households with 10/1
 

Here is what AT&T's LTE coverage looks like based on Scenario 1 (no speeds indicated):

Here is what AT&T's LTE coverage looks like based on Scenario 3 (speeds indicated in legend):