Jeff Johnston: Hello there 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 communications industry. This podcast is brought to you by CoBank's knowledge exchange group and I am your host Jeff Johnston. On today's episode, we get to hear from Tim Courtney, vice president sales and strategy at Further Enterprise Solutions, to get his thoughts on the emergence of private wireless networks.
Thanks to the FCC's decision to make the CBRS spectrum band widely available, smaller organizations can now build their own carrier-grade wireless network. Think about a farmer co-op building their own high-speed wireless network to support precision ag applications, or a rural city who has no broadband options building their own network. Tim's company is in the middle of all this activity and his extensive expertise and industry knowledge makes him the perfect guest to cover this important topic.
Without any further ado, pitter patter, let's hear what Tim has to say. Tim Courtney, thank you so much for joining the podcast today. It's a pleasure to have you with us. How are you doing?
Tim Courtney: Good to chat with you.
Jeff: Great. Hey, let's just jump right into it. There's been a lot of talk about this notion of private wireless networks from the likes of the FCC, equipment manufacturers, wireless operators. Tim maybe you can help us understand, what exactly are private wireless networks and what makes them so special?
Tim: I would break that question into two parts or two answers from an industrial enterprise perspective, a factory floor, an office building. You can look at it as Wi-Fi on steroids, let's say. That's one aspect of a private LTE, a private 5G network. Then there's the community aspect of it. We're seeing homeowners’ associations all the way up to cities and school districts building out their own wireless network be it LTE/5G to cut the digital divide, IoT, smart cities, plenty of use cases once a city deploys in network.
You've got the in-building type situation. You've got campuses, colleges, schools and then you've got the outdoor community. A couple parts to answer that question for you Jeff.
Jeff: No, I appreciate that. Tim maybe help us understand why now are we talking about private wireless networks or private LTE? Why isn't this something that maybe we should've been doing this five years ago. Why all of a sudden now is this becoming so topical?
Tim: Well, you've got the equipment manufacturers always wanting to sell more gear. To keep the economy going, find use cases outside the major carriers to redeploy what they've spent a lot of money in terms of research and development and manufacturing. That's number one and probably the biggest and most important thing is availability of spectrum. Now the C-band auction went for $50-plus billion. No community, no city, no school's going to be able to afford that.
The first spectrum available at a low cost basis for normal-type enterprises, small businesses, small communities is CBRS Citizens Band Radio Service. Part of that was licensed as you know Jeff, and part of that is unlicensed and everyone can use all the spectrum until the licensed entities start turning on their channels. That's 150 megahertz of spectrum. To put that in perspective, just a few years ago the major carriers in the U.S. were probably all running their network on just 100 megahertz of spectrum. That's quite a bit of spectrum to offer capacity and coverage to these communities or factory floors.
Jeff: Let me just drill down a little bit on that. As I understand it, with this new CBRS spectrum, it really enables smaller organizations to build effectively our Verizon-like networks, like carrier grade networks at costs that are significantly less than before. Is that the right way to think about it?
Tim: I wouldn't say that the cost before, I would say it's probably more of a control issue, but the same equipment that the major carriers are buying - the same devices, the Samsung devices, the iPads, the iPhones - those devices can be brought into a private LTE environment on a campus in a community, on a factory floor, so identical hardware. There's no secret sauce that the carriers have that a private LTE operator, let's say, couldn't offer to their stakeholders.
Jeff: You now have communities and enterprises that can build really high-quality networks and replace their old Wi-Fi networks that maybe don't meet the needs that they're looking for I guess, is the right way to think about it, right?
Tim: On the Wi-Fi perspective you're probably looking at more coverage and security. If there's no signal, it brings signal to areas where you may need signal and never had it before, so that's something you can control, design. You don't have to wait for the carrier to decide when they're going to come into your community or into your office building to build out a wireless network. It puts the control really in the local entity, be it a building owner, a factory operator, the schools, the cities, the rural associations across America.
Jeff: Actually, you mentioned rural, so that's probably a good segue into the next area I wanted to talk about. So if you look at what's happening in Washington, we’ve got $65 billion in broadband funding from the recently signed Infrastructure and Job Act. Then there's another existing program out there called the rural digital opportunity fund where there's an additional $20 billion that's available to bridge the digital divide. Clearly, a lot of money is being thrown at this problem. Tim, maybe you can help us understand a little bit. How do you see private wireless networks playing a role in bridging the digital divide?
Tim: We don't have to talk theory. Just on the local simplest use case, we're seeing homeowners’ associations band together to provide their own internet access. They're building towers in a community, they're buying a fiber getting it to that tower and then having that tower send those signals to the owners’ rooftops or windows to bring that internet service into those rural homes.
It's going to be a combination of fiber and wireless. We want to get fiber as far as we can, but at some point it's not economical to run fiber to each and every home. That's where wireless solutions and the earliest one being CBRS is going to broach that digital divide, so to speak. To get that internet signal into the home. That's separate from a mobile network. Once you have a fixed network you can always do a mobile network or execute and turn on a mobile network. Right now, a lot of the activity between the homeowner's associations and all the way to the schools, CARES Act money was also used to build out these CBRS networks.
The schools want everyone to be able to go home and be able to get on the internet, Wikipedia, YouTube, to study and get their homework done. It shouldn't be an option of the folks that can afford the internet versus those that can't and the analogy is there's no library in America that charges entry fees. Why isn't the basic internet to every household at no cost?, is the theory there.
We're not talking about HBO Max, Netflix, et cetera. We're just talking about basic internet access. I think the government is really geared up to push that solution. Ideally fiber, but we're not going to be able as I said get fiber to every house, so it's going to be a hybrid network. Fiber to a tower or a building rooftop and then wireless to the individual homes or businesses.
Jeff: Certainly COVID exposed how vulnerable those are in rural America who don't have access to the internet. When you have to work from home or learn from home. We heard of stories of kids having to pull into a McDonald's parking lot just to get access to the internet so they could do their homework. It's great to hear that. Interesting it's not just cities, we're drilling down all the way to homeowners’ associations that are taking it upon themselves to make sure that their members are connected.
What do they do? Do they just factor the cost in to the homeowners’ association fee then? Is that the model that these folks are taking?
Tim: Absolutely. They'll see if there's any technical expertise in the community itself from a volunteer standpoint, they'll engineer the network, they'll provide all the internet connectivity via the fiber provider, they'll maintain it. They're going to design, build and maintain it.
Now they might sub-contract out bits and pieces of that, but they really want to control that and then they're building that into the cost of the homeowners’ association fees. There's probably dozens of different ways to monetize it, but really this is just a cost plus model. One it's to get the internet, two to the users that may not be able to get it and if you're doing it yourself, you're probably most likely to provide it at a lower cost than some of the other folks that are out there.
Jeff: That's really a brilliant approach, I think, not only to make sure people are connected, but over time, I would assume that homeowner's association would eventually own that network. You're going to get to a point where you pay for most of it and you just have some ongoing operational costs, but homeowners’ associations like they own the gates or the pools in their communities, they can now literally own their own broadband network.
Tim: Absolutely. The thing owning about a broadband network, it's not like your iPhone or Samsung phone where every year you want to switch it out to the newest thing. If the internet's working, the internet's working. To your point, after so many years, all the capex is going to be paid off. The fees are going to drop down to zero from that perspective. Think of it as a printer lease model of days gone by. You lease the printer for three years then you buy it for $1 at the end of the term. Now, you'll still have a little bit of operational expense, the electricity, the fiber, getting to the tower, et cetera. It's not going to go down to zero, but as soon as the capex is paid off, that's going to be a big chunk of the cost or a monthly, yearly fee that's going to be reduced.
Let's just take this one step further and think about private networks and cities and so forth to bridge the digital divide. If you look at the money that's being allocated today from the government, a lot of it pays for or helps pay for the initial cost of the network to build the network. But if it's a commercial network, so if somebody's trying to make a profit, over time as you mentioned, there's going to be ongoing operational expenses and upgrades and so forth to the network that wouldn't necessarily be supported by the government in some of these higher cost areas.
Are there things that private network owners can do like other new sources of revenues that they can look to or ways to reduce costs to help them deal with those ongoing operational expenses that again that typically aren't supported through any government programs. Do you know what I'm trying to say? Does that make sense?
Tim: Yes. Once a wireless network is built out, people want to use it. You go into an office, you're a vendor coming into someone's office, "Oh, can I have your username and password for your Wi-Fi network?" If you're roaming into a community or you're a member of the community and want to use a new device on the network. There's really not a lot of appetite to build 5, 10, 15, 20 different wireless networks in rural America.
So why not these communities, these homeowners’ associations, these rural associations build a solid network and lease that back to the major carriers or give that to the major carriers at little to no cost. It could be a revenue stream and it could cut down on the infrastructure that's being built in the community. Do you want five cell sites in your backyard, let's say.
Jeff: Right. Kind of ugly, yes.
Tim: Whereas the city can facilitate that and share it. The city shares their tower at the police and fire stations you see. Why can't that type of model benefit that the local community as well as the wireless carriers. The wireless carriers are here to stay. They provide a great service, a large service, they maintain that network 24 by 7. Just because there's pockets of community wireless networks, we're not saying the major carriers, the cable TV folks that are offering wireless are going to go away, but is there a way to work together on sharing infrastructure or time of day sharing. If a school network build it for after school, clearly it's not going to be used 9:00 to 5:00 or 9:00 to 3:00 during the day. Why can't that asset be leased to someone else that could take advantage of it and use it is?
Jeff: We're talking of network sharing. Is that something that we've seen a lot of in the past with the national operators, or have there been technical issues that have precluded them from doing that and maybe now aren't as much of an issue. Just give us a little history perspective on that.
Tim: 20, 30 years ago, everyone said no one's going to share any assets and you'd see three towers built next to each other with one radio transmission system on it. Those days are gone. We're sharing towers now, We're sharing radio infrastructure with DAS networks within building-- Distributed Antenna System, sorry. DAS systems in conventions, in casinos, hotels, amusement parks, et cetera. We have that sharing in place and you can argue a lot of the carriers that just turned on Wi-Fi calling in the last five to six years. They're admitting, "Hey look every bit and byte doesn't have to be on my device."
Jeff: That's a good point.
Tim: It could be on your home network, it can be on your work network, it can be on the restaurant network. Some inside the carriers that get nervous say if there's quality issues associated with that, does that reflect poorly on our brand? We're getting smarter every day, every year on how to monitor that and communicate with the customer on what those issues may be.
Equipment sharing is probably more and more going to be discussed and implemented here in the coming years especially around CBRS. In some of the programs like Google Project Orion where they're trying to federate the Wi-Fi networks and share those. A school doesn't need to build a competing Wi-Fi network. They build one Wi-Fi network and they share that with all the stakeholders, the teachers, the students, the vendors et cetera.
I think we're going to see all those sharing morph into maybe one network in a campus in a rural area that can be shared out at little to no cost.
Jeff: Got it. Hopefully, that sharing approach really starts to take hold and we can get those folks connected that aren't connected. I have two more were areas I want to discuss with you Tim before we wrap up. Let's just stick on the network side for a little bit longer here. When I think about the history of wireless networks and who has historically built them, you had situations where you needed a lot of capital, you needed sophisticated engineers like yourself, you needed back office expertise, you needed extensive project management expertise.
It seemed like building and running one of these wireless networks was a massive, massive undertaking. Now with private networks we're talking about more of a fragmented environment, I think, where we're going to have lots of different types of network builders and managers. Maybe you can help us understand, is it still such a big lift to build these networks or have things gotten a little easier and maybe if so, why have they gotten a little easier?
Tim: They've definitely gotten easier. From a private standpoint they've definitely gotten easier. We're more software based, the hardware isn't proprietary. It's really off-the-shelf compute type boxes in terms of the core. Even the hyperscalers, the cloud providers, there's business models, you can sign up and put a CBRS note in your business, your factory floor and if you don't want to host the core network, you can have that hosted in a cloud environment.
It's really almost as simple as just pointing it to an IP address to turn on, manage, maintain and control. It's really coming down to almost plug and play in my opinion. Now you still--- Since I'm an RF engineer, I'm biased. You still need a good RF design. You want to make sure you put the RF in the right place, but that the back office as you said, has become a lot more streamlined.
We've got more players and we've got players that are really focused on the enterprise. The major OEMs of over the last decade or so, they weren't really focused on the enterprise, they were focused on the billion dollar contracts. Lots of new names in the space, lots of new radio players. We probably have a dozen or two dozen RF providers for the radio, where a few years ago before CBRS, really that was a short list of three to five major OEMs across the world.
Definitely simpler and no different than people running CAT 5, CAT 6 cable, putting in their own switches and routers. Twenty years ago, you might turn that over to IBM. Today, every business, business owner has got IT somewhere in their title and providing that service to their employees, to their customers et cetera.
Jeff: I was telling my wife the other day, I was so proud of myself because I said, "Honey I built a wireless mesh network at home, so we can get much better access to the internet." She's like, "Wow that's great honey. You're kinda useless at that stuff. How did you do that?" I said, "Well, I basically plugged in an access point into the wall. I did that three times and now we have a wireless mesh network at home." She thought I was brilliant, so anyway.
I guess that also applies to these new wireless networks. Maybe not an apples-to-apples comparison, but point being is it's getting easier.
Tim: That's a direction we're going. Self-provisioning, plug and play, everyone's focused on that. If we're going to get all the schools, the communities the businesses on 5G, we just have to make it super simpler.
Jeff: For sure. Makes sense. Well, that's great to see that progress. The one last area, Tim and I wanted to bring us back to the farmers and ranchers, the agricultural side of things. Lots of talk recently about precision ag technologies, and how a lot of the pundits are saying. Hey, with the right kind of connectivity, farmers and ranchers can take advantage of these applications and realize a lot of efficiencies at the farm.
I'd like to get your thoughts on that and to what extent do you think these private networks that we're talking about could accelerate the adoption of these applications and really, how important do you think it is, from a connectivity standpoint to have a much higher speed connection that's available where it is today, than maybe what some of these private networks could offer farmers and ranchers?
Tim: If I was in their shoes, I'd take a hard look at doing it on my own. You really got three decisions in that decision matrix. One is the cost. If one of the major carriers covers your farm, and you're happy with it, can you provide a similar service at a lower cost? That's just economics 101. Another thing is control. If there's a disaster in the city, can you get your network up running faster than a "community network" or "national network?"
Where do you want your data going? Anything you put in the cloud, as you see all the security warnings, you've lost control of your data, so to speak. Do you want the data to leave the farm? Do you want your data to leave the community? You can have a lot more control. If control's important, that's another buying decision in favor of you owning your own private LTE, 5G network.
And then security. And that's more of Wi-Fi situation. Everyone gives out their username passwords, you can lock down Wi-Fi networks, I know that, but typically, that's what people say, "Hey, what's SSID? What's your password?" With these LTE and 5G networks, these are SIM based, e-SIM-based solutions. You know exactly-- You're typing in exactly who's getting on your network. It definitely cuts down on the security risk as it relates to Wi-Fi.
If any one of those three things is important to a business, a farmer in rural America, that's something they should consider and back to the homeowners’ association, it doesn't need to be an individual farmer, could it be a bunch of farmers that coordinate and build multiple cell sites and have a big county footprint, a city footprint for their operations and if there's excess capacity as your earlier point, hey, can they lease that capacity back to other parties? Could they lease it back to the city, the residents, could they lease it back to the major carriers that want to provide service in that area?
The lines are blurring, and the technology is there, the cost is there. It's just if you want to put the sweat equity into building your own network.
Jeff: Yes, that's a good comparison between the homeowners association and these farmer cooperatives, of which there are many, and they're large. For them banding together and working with a third party to help them build a private network may be in their best interest for the reasons you just laid out. I can't thank you enough for joining us today on the podcast. We certainly learned a lot and absolutely appreciate your time and hopefully, you'll come back and join us one day in the future.
Tim: I would love to Jeff, this is enjoyable. Thanks for all your questions.
Jeff: A special thanks to Tim for taking time out of his busy schedule to share his thoughts and insights with us. I think this whole private wireless network trend is a pretty big deal. It will certainly lead to a more fragmented network market, which is positive by itself, but it could also accelerate the adoption of edge computing and IoT applications. It also introduces new options for smaller organizations and cities to digitize their operations and connect the unserved and underserved.
I could go on and on, but the point is, the use cases for private wireless networks are numerous and over time, when more of these networks are built and the ecosystem matures, costs will come down making the whole private wireless network value proposition that much more attractive. Hey, thanks for joining us and please watch out for the next episode.
