Tim Courtney: It just all comes down to adding more capacity – adding more capacity is adding more satellites. In the cellular world, it’s adding more cell sites. I think they’re going to show the government, “Hey, here’s our launch schedule. This is going to address the capacity situation.” I don’t think any of the satellite providers are saying, “Hey, what we have is all we’re going to have.” They’re going to keep launching. The cadence will be associated with the capacity.
Jeff Johnston: That was Tim Courtney, president of Wavsys, a professional services and consulting company for the telecom industry regarding the future scalability of satellite networks.
Hi, I’m Jeff Johnston. and welcome to the All Day Digital podcast where we talk to industry executives and thought leaders to get their perspective on a wide range of factors shaping the digital infrastructure market. This podcast is brought to you by CoBank’s Knowledge Exchange group.
Recent changes to the BEAD program have adopted a technology-agnostic approach for connecting underserved and unserved areas. These changes mean fixed wireless and satellite networks will likely play a larger role in rural America, which brings opportunities and threats to rural fixed line operators. Tim has worked in the telecom industry his entire career, and has a knack for being able to look around the corner to see what’s coming. So given these major changes, I was thrilled when Tim agreed to come on the podcast to discuss this important topic.
So, without any further ado, pitter patter, let’s see what Tim has to say.
Tim Courtney, it’s great to see you again. Welcome back to the podcast. How have you been?
Courtney: I’ve been doing well, Jeff. It’s great to be back with you. Looking forward to our conversation today.
Johnston: Me too. Always excited to talk to you, Tim. By the way, congratulations on your new job and your new opportunity. It sounds great, so I’m super happy for you.
Courtney: Now, a bunch of great people at Wavsys, W-A-V-S-Y-S, we’re doing staffing for the telecom industry, temp-to-perm type situations, as well as SOW, full scope of work type jobs on the design, build, and operate front. Anything from fiber, data centers, wireless, fixed wireless, you name it, anything related to telecom, testing, design, deploy, we’re helping out the industry. Thanks for bringing that up.
Johnston: Tim, I want to talk about the BEAD program today. Very recently, the Commerce Department announced the new rules, and new conditions around the BEAD program, I think we could probably spend a lot of time talking about all the different changes, but what I really wanted to focus on, Tim, was what I’ll call more of a technology-agnostic approach to BEAD.
Under the Biden administration, it was more of a fiber-first strategy, and only in instances where you’re in high cost or ultra-high cost areas would the NTIA and the states look at other technologies, specifically, fixed wireless, and satellite.
To start off, how do you think about this new BEAD program with this technology-agnostic approach from a satellite internet perspective? Because I think the knee-jerk reaction has been, “Oh, this is great for Elon Musk and Starlink and Jeff Bezos and Project Kuiper.”
Courtney: I think the hype is definitely warranted, right? It’s a great technology, what Starlink and Kuiper and Viasat, and others have done in the industry. It’s a proven technology. The downside is there’s going to be a physical dish associated with this. Now, these are small, but they’re going to have to have some line of sight, they’re going to have to be outdoor. This is no different than what the fixed wireless folks have come to deal with. They’ve had external mounted antennas, which obviously provide the best performance in terms of throughput, et cetera.
Being outdoors is definitely a positive, as you talk to an engineer, which I’m an engineer. Being outdoors makes a lot of sense. In terms of convenience, cost of install, we’re seeing other folks do window mount, Now we’re not going to see that type of progress in terms of bringing a satellite signal into the house right now. Those are the pros and cons of the solutions.
Johnston: Great. Let me get into some more specifics here, Tim. The minimum speed requirements for BEAD are 100 by 20. If you look at some of the recent Ookla numbers from Starlink, most of the time, they’re not hitting those numbers. I think I remember seeing, on average, 17% of existing Starlink customers in the U.S. would be getting that 100 by 20 speed today.
One of the things that NTIA and the states are looking at is confidence in the fact that these networks are going to be able to scale to meet future bandwidth needs beyond 100 by 20. If we’re only at south of 20% today getting that, how do you think Starlink might approach this to give regulators the confidence that, yes, we’re not there necessarily all the time today, but we will be there, we will be able to meet those future speed requirements. How do you think about that?
Courtney: No different than what you and I have dealt with since 1G. It just all comes down to adding more capacity – adding more capacity is adding more satellites. In the cellular world, it’s adding more cell sites. I think they’re going to show the government, “Hey, here’s our launch schedule. This is going to address the capacity situation.” I don’t think any of the satellite providers are saying, “Hey, what we have is all we’re going to have.” They’re going to keep launching. The cadence will be associated with the capacity.
Clearly, they don’t want to have a poor user experience that’ll be used against them in terms of marketing. Right now, I think you’ve got some of the richest people in the world building these networks. I don’t think they’re going to skip out on the capacity front, so to speak. I think there’s definitely a trajectory to add more capacity to the network in the months, quarters, and years to come. Again, as an engineer, I think that’s something that can be managed.
Johnston: Got you. No, that’s good to hear. I got to tell you a little personal anecdote. Last week, I was on a regional United plane. Those regional jets are now equipped with Starlink. I was streaming my Hulu. I was streaming Netflix, Apple TV, whatever, as if I was sitting in my home with my fiber-to-the-home connection. It was unbelievable. I’m excited for that service to get rolled out to the United’s entire fleet. It blew me away. I couldn’t believe how good it was.
Courtney: No, that’s great. It’s only going to improve. All the technologies are going to improve, and we’re going to see that connectivity everywhere, as you just referenced.
Johnston: Let’s move on, then, Tim, and talk about the new BEAD program and what it means to fixed wireless. I’m going to tell you how I think about it, and I’d love for you to respond. It feels like this is the fixed wireless technology opportunity to really shine in rural America. Obviously, Verizon and T-Mobile have done well with their fixed wireless service. It just feels like we’re going to see a lot more fixed wireless deployments in rural America given these changes. What say you?
Courtney: Oh, absolutely. Fixed wireless, don’t forget, still needs fiber. All the cell sites still need fiber. I’m a big believer in wireless first. Then, where it makes sense, where your fiber infrastructure is, expand that as best you can cost effectively. Then you might orphan off wireless that you’ve already built, but that could be a business in of itself. T-Mobile, Verizon, and AT&T are selling wireless backup.
Back to connectivity, your smart home, security systems, cameras, making sure the Amazon package got delivered, which my kids love to check out. Having that redundant link is nice, and that’s no different than what security systems at your home have been doing. They use your telephone line for the longest time, and they use cellular as backup. That’s what I see the life cycle of a fixed wireless provider. Fixed wireless first, fiber second, and then use that network as a backup to your fiber network is the ultimate solution.
Johnston: Then I saw too that the NTIA is open to or treating unlicensed spectrum-- I think I got this right, unlicensed spectrum, the same they would licensed spectrum. Can you talk a little bit about what you’re seeing there in terms of how do you think about CBRS unlicensed deployments in rural America as a result of all of this? How do you think about the 6 gigahertz band, where there’s an enormous amount of capacity playing a role in these rural deployments?
Courtney: Yes. CBRS doesn’t have a whole lot of bandwidth, but it does offer a quality of service a little bit above unlicensed. Then you’ve got 5 with a lot more spectrum than CBRS. Then the sweet spot is that 6 gigahertz spectrum, almost a gig of spectrum available for fixed wireless. There’s companies like Toronto Wireless out there that are taking advantage of that. That’s a great product, a proprietary product that’s tweaked in tune for fixed wireless, not offering any mobile phone capabilities. That’s how tuned up it is, so to speak.
Those spectrums and the data I’ve looked at in the 6 gig band is quite impressive. Now, one could argue the 6 gig band, as you go higher up, Jeff, as we’ve talked over the years, that limits the link budget, so to speak, how far you can get from the cell site. If you’re doing an external mount or a window mount, those could overcome some of the limitations of 6 gigahertz relative to the lower band spectrum that maybe the carriers have. I think that the Toronto-type solutions are going to be another tool in the toolbox for the engineers to exploit to make sure they can offer the SLAs that they’re promising the customer and the government here.
Johnston: I know one of the concerns with BEAD in general, I guess, was that, this was a great program. It helped operators from a capex perspective, build these networks, which is wonderful. But the ongoing opex and the profitability of the network, specifically as it really relates to some of these fiber deployments, I think that’s where it got a little bit tricky for some operators.
It’s great that you can get the capital to build, but if you can’t cash flow the network, then you just can’t really move forward with it because you’re burning cash every month. What are some of the ongoing opex elements of this network that operators might need to consider if they were looking at taking advantage of BEAD money and building fixed wireless in unserved or underserved areas?
Courtney: The two biggest ones, and there are no difference between fixed wireless and mobile, in my opinion, are the tower lease or the real estate lease to put the transmitter and the backhaul from the transmitter to the network operation center, let’s say, the core network. Typically, you’d like to go fiber first, and in some cases, you can do microwave and free space optics on top of that if fiber is not available.
Those are your two biggest expenses, clearly, the cell site maintenance, technicians checking on the equipment, the insurance, the electricity, checking the batteries for battery backup, generator maintenance if you have a generator at the site, for example. Those type of tasks that need to be done, regardless of what the technology is.
Johnston: I guess you’d want to use as much as possible existing infrastructure, if you can put an access point on top of a grain silo or something like that. That would be a key thing for folks to consider.
Courtney: Absolutely. The tallest building, a mountaintop, let’s say, that has some infrastructure, some roads up to it, let’s say, grain elevators, those type of high locations would be ideal solutions for a fixed wireless system.
Johnston: Great. Then one more question on fixed wireless, Tim. If we think about the scalability of fixed wireless versus satellite, being able to add additional capacity as that network gets loaded up, and then convincing the NTIA and state broadband offices that a fixed wireless network will be able to do that, how do you compare those two networks from a scalability standpoint?
Courtney: I would say the fixed wireless network would be quicker. Apples to apples. You can get on the ground, you can build steel, you can get things done. Obviously, we’ve heard horror stories with local zoning communities, but putting that aside, the real construction is pretty straightforward these days. We’ve perfected that over the last few decades to drive the cost, efficiency, the time needed to get those things built.
Now, if you compare that to a satellite, obviously, satellites have to be built, you have to schedule a launch, they have to get up there, they have to get to the right orbit, et cetera. Both have their own challenges, but on the ground, I think would have a little bit more of an advantage, especially if you’re planning these out in advance, looking at your capacity, your growth plan, et cetera. I think the fixed wireless probably has a little more advantage over the satellite in terms of scaling.
Johnston: Would you also agree that-- There’s a history here. Wireless networks are a known entity, we’ve gone from 1 to 2 to 3 to 4G, et cetera, and 5G. I think the industry has been able to demonstrate that as we move to next-generation technology, we have more spectrum-efficient technology, we have faster speeds, greater capacity, all that kind of stuff. Right?
Courtney: Wi-Fi started off at 2 megabits per second, roughly, and now we’re 10, 20 gigabytes, it seems like, with Wi-Fi 7. Even Wi-Fi has been growing in leaps and bounds. Cellular is growing in leaps and bounds. Fiber, coax, satellite, they’re all growing. I would say to the regulators, there’s already a track record of these technologies improving to satisfy the customers. I don’t see that stopping anytime soon.
Johnston: All right. Tim, let’s shift here a little bit and talk about fixed-line rural broadband operators and how they should think about the changes that were made to the BEAD program. Should these folks be really leaning into this and looking for opportunities to deploy fixed wireless with BEAD money that, maybe, they weren’t thinking about before? If you were in their shoes, how would you be thinking about these changes and how it might impact your business, and what you were going to do about it?
Courtney: I think it’s going to be a lot quicker now since satellite, you can get that installed in days, really from an order. Now the competition could be immediate in terms of internet to internet in terms of competitive foe, let’s say. If I was in their shoes and taking a look at what the cellular folks have done, as well as the cable TV folks have done, is the bundle. It’s a bundle of the landline or mobile internet along with a mobile phone. Having those two things together really cuts down the churn and keeps that customer sticky. If you have a great customer base, you got to ask yourself, is there any way to provide a phone service?
I know there’s partnerships out there with some of the major carriers that the rural ISPs can tap into, but I’m a big believer, the short to medium term that these folks need to be equipped to offer both services. If not, then they could be bundled against, let’s say. Now, you could argue Starlink doesn’t have much to bundle there. I get that. A Kuiper with Amazon, Amazon Prime, and all the other services, there could be a powerful bundle there in the future. I would say, maintain your customers, keep them happy, offer them more value, and can you bring that mobile phone play to the table?
Johnston: Yes, I think about Amazon Kuiper, which is, for those who aren’t familiar with that name, it’s their satellite internet service that I think we’re going to see launch later this year. Amazon’s got a lot of bats and balls to play with, so to speak, to your point. They can bundle in Prime and make it look really attractive. Then I think they announced on a previous earnings call this year that Amazon’s going to spend, I think it was $4 billion.
They’re going to invest $4 billion into rural infrastructure so they can improve Prime delivery, improve that rural experience. It feels like rural America is becoming a bigger focus for Amazon from a Prime perspective and that might have to do with this upcoming Kuiper launch, too, right?
Courtney: Yes, 100% agree with the thought process there. There’s typically less competition in rural America. The internet service in the city and suburban areas is pretty strong. You might have multiple operators already today to offer that 100/20 megabit per second service. Having those rural folks on your network, spending more money with you, is definitely key.
Johnston: Right. I get the bundling aspect of it, more of a defensive play to protect your existing customer base from competitive threats. Should these operators also be thinking about going in the offense? Looking at taking BEAD money, maybe building out fixed wireless, some of these folks have never built out a wireless network before. Maybe you could talk, Tim, a little bit about what’s that like? How far out of the comfort zone are we talking about here for fixed line operators to build wireless networks in adjacent markets, how do you think about that?
Courtney: Yes, I definitely would advise folks to take a look at that. Look at where your plant is today. Figure out if there’s any tall structures around that plant, or creating or partnering with some tower companies to get those towers put in place to offer fixed wireless. I’m pretty confident, based on the density, that there are still places where fixed wireless is a great technology and can be a lower-cost technology to satellite. Satellite’s a premium service still today in most cases. You’re paying a pretty penny for that service compared to what a fixed wireless carrier can provide or a traditional mobile phone operator could provide in terms of a bundle. I think there’s some competitive space where you can fit yourself in and come in lower on the pricing and still cash flow a fixed wireless network on top of your terrestrial network. In terms of fringe, focus on your fiber network as the core, and then the spurs off that build out the fixed wireless network.
Johnston:. Hey, listen, wonderful insight as always. Anything I didn’t ask you about, Tim, that you wanted to cover? The stage is yours for any closing comments.
Courtney: Again, still the biggest thing I would say is the bundle. I’ve seen what the bundle’s done to our industry as it relates to mobile and the cable TV side of things, and it’s successful, and customers resonate. Customers like the value equation. You have T-Mobile, it has T-Mobile Tuesdays. It’s a great marketing program. There’s always these little niche things that offer value to keep a customer sticky. Whatever you can do above and beyond your basic service to make that customer happy and exceed their expectations is going to go a long, long way.
The bundle is the key thing. There’s going to be more competition. Start thinking about how you can go on offense and defense, so to speak, as Jeff just said. A lot of opportunity out there. The country deserves everyone to be covered with internet here, and I think we’re going the right direction as the technology is an agnostic solution and let the business folks figure out what’s the right way to do this. Again, it’s not going to be static. As I said, fixed wireless today, fiber tomorrow, fixed wireless backup as the third leg of the stool. That’s what I would say, Jeff, and I appreciate your time today to brainstorm with you on the state of the industry here.
Johnston: Great thoughts, a great summary, and again, thank you for coming on today. I really appreciate it.
A special thanks goes out to Tim for being on the podcast today. I think it’s important for rural fixed-line operators to make sure they take a close look at the BEAD program given the recent changes. I know there is still a lot of red tape and reporting requirements. But I’m guessing the economics look better now that there is greater flexibility on the network side. And one of my concerns is the risk of a new operator entering an underserved market with a government funded fixed wireless network, then edging out into adjacent competitive markets with a broadband-smartphone bundle.
Hey thanks for joining me today and a special thanks to my CoBank associates Christina Pope and Tyler Heron because without them there wouldn’t be an All Day Digital podcast. Watch out for our next episode.
