Wireless Network Sharing Offers Opportunity to Bridge the Digital Divide
Network sharing could bring greater broadband coverage across rural America has potential to reduce costs and operating expenses, but obstacles exist
DENVER (April 13, 2020) — Bridging the urban-rural digital divide will take a multi-pronged approach with creative business models. Existing federal broadband programs are not sufficiently funded and relying on federal support alone will not be enough. Wireless network sharing is one solution-based business model that would allow operators to reduce their cost of service, enabling them to provide more wireless broadband coverage in high-cost areas throughout rural America.
A new report from CoBank’s Knowledge Exchange division explores the strategic opportunities and logistical challenges associated with wireless network sharing to address underserved areas across rural America.
“The primary challenge to bridging the digital divide is cost,” said Jeff Johnston, communications economist with CoBank. “In many rural markets there simply aren’t enough residents to justify the capital and operating expenditures needed for a single operator to run a profitable network.”
Traditionally, each wireless network operator maintains its own radio infrastructure on a tower to service their customers exclusively. Network sharing, or more specifically Radio Access Network (RAN) sharing, means multiple wireless operators share the radio equipment on a wireless tower to provide connectivity to their respective customers. These radio network elements are all integrated back to each participating operator’s core.
The emergence of spectrum available for sharing, specifically within the Citizens Broadband Radio Service (CBRS) band, removes one of the major hurdles for network sharing in the US—the patchwork of spectrum holdings across wireless networks.
“CBRS band spectrum is nationwide and accessible to all operators,” said Johnston. “It appears that all national wireless operators will acquire some licensed CBRS spectrum, so eventually all phones in their portfolios will support the CBRS band. This is critically important for network sharing.”
Obstacles and Incentives
Network sharing is a way for national wireless operators to reduce their network cost structure in rural America. These cost savings would enable operators to expand coverage to rural markets they would have otherwise avoided. However, the approach does present challenges.
“First, large tower owners usually don’t allow network sharing because less equipment on a tower means less revenue for operators,” said Johnston. “Second, network operators are fiercely competitive and getting independent-minded operators to agree on network configurations will be a challenge.”
Johnston points to a few key factors that could motivate operators to engage in this type of network sharing, perhaps most importantly is the influence from investors focused on corporate social responsibility.
“More investors are adopting responsible principles, specifically Environmental, Social, and Governance (ESG) investing and are seeking out companies that employ these principles. Leading a creative solution to help bridge the digital divide while reducing costs could be a prudent strategy for operators that’s also viewed favorably by regulators.”
Watch a video synopsis and read the report, Network Sharing Could be the Creative Way to Bridge the Digital Divide, at cobank.com.
CoBank is a $145 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.