Citizens Broadband Radio Service Business Models

Shared spectrum represents more than a new way of enabling communications spectrum access rights. It also raises questions about the networks that will support its use, indoors. Consider the 3.5-GHz Citizens Broadband Radio Service (CBRS) being introduced in the U.S. market.

Consider the issue of who pays for building and operating the network. Will CBRS access networks (expected to be used "mostly" for indoors applications) be paid for by public network operators, like the mobile networks?

Or will it be more like venue Wi-Fi, mostly installed and operated by building owners or tenants? It is hard to say, right now, in part because we do not know how entities will decide to participate. Further complicating matters is that, right now, CBRS does not operate "like Wi-Fi" in one key respect. Where multiple Wi-Fi providers can contend, at any one venue, CBRS will allow venue owners sole rights to operate a CBRS network at a stadium or shopping center, for example.

That will include the right to block other CBRS networks inside the venues.

CBRS uses a three-tier access priority system, with existing licenses having interference protection rights from commercial users, while a a second tier offers priority access, while a third tier operates much as does Wi-Fi (best effort access).

The Priority Access Licenses (PAL), expected to be made available at auction, and with interference rights over the “best effort if capacity is available” General Authorized Access (GAA) tier of service, might be considered the preferred choice of mobile service providers, who have tended in the past to require quality-of-service protections.

The GAA spectrum would allow licensees the right to use 10 MHz channels for two three-year periods (3550–3650 MHz). And that is the issue: the six-year license duration limits the attractiveness of PAL for mobile operators who, in the U.S. market, are used to perpetual license terms, argues Senza Fili principal Monica Paolini.

As a result, she argues, the strongest interest might lie in use of the license-exempt GAA tier, which will effectively represent a new capacity option that is similar to Wi-Fi. That might have other repercussions as well.   

If GAA spectrum can be used by any entity without a license, then CBRS can be built out by property owners in the same way they use Wi-Fi. That might effectively limit use of CBRS capacity by mobile operators

Also, CBRS access using GAA will allow venues to block use of other temporary Wi-Fi access points (consumers using their own devices, for example).

That also increases the likelihood that neutral host approaches could develop on a fairly widespread basis, eventually. The advantage there is that each service provider could use CBRS facilities without building in-building infrastructure. The disadvantage is that mobile service providers and others using a neutral host network would not be able to control the facilities to the same extent as if each provider supplied their own radio infrastructure.

So much remains to be discovered, in terms of the ultimate pattern of CBRS license preferences by commercial users (such as mobile or cable operators), venue owners (building owners and managers) or third-party developers of CBRS indoor access facilities.

If the present Wi-Fi pattern develops, then venue owners will develop CBRS access services that resemble today’s Wi-Fi. In principle, new neutral host facilities could develop, with a property owner or third party operating the radio infrastructure, and offering access to all who wish to partake. Unclear is the amount of demand for priority access approaches that resemble today’s mobile licenses.

Potential regulatory changes that would extend PAL licenses for longer durations also could have an impact. If that were to happen, then CBRS using PAL would more closely resemble traditional mobile licensing.

If one had to make a guess today, it might be that most smaller locations eventually will have CBRS operating just as Wi-Fi does today, with a property owner or tenant making the decision to create a small cell running a CBRS network using the GAA access method, just like they would operate a Wi-Fi network.

Neutral host is going to make more sense at large venues, though it remains unclear how scale will become a factor, favoring larger service providers rather than individual venue owners.