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US Aviation on Collision Course With AT&T (T), Verizon (VZ)?
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The aviation industry appears to be in a potential stalemate with the telecom sector as two leading operators refuse to pay heed to the pleas from U.S. officials for the deferment of their 5G expansion plans by about two weeks. Both Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) remain firm on their decision to commercially launch their C-band 5G wireless service on Jan 5 in order to better compete with other countries like China. With the impasse heading for a likely showdown in the legal arena, the new year has apparently brought with it fresh challenges for the Biden administration.
The bone of contention relates to the likely interference of 5G waves within the C-Band spectrum with certain flight operations. The Federal Aviation Administration (“FAA”) has raised concerns that the commercial launch of the C-band wireless service in the 3.7-3.98 GHz frequency band could cause the airwaves to interfere with radar or radio altimeter signals that measure the distance between the aircraft and ground. Data from these devices are fed to the cockpit safety system that helps pilots gauge the air safety metrics and prevent mid-air collision, avoid crashes and ensure a safe landing.
In order to avert any potential disruption in essential safety sensors, the FAA had earlier issued certain flight restrictions that would prevent pilots from operating the automatic landing option and other cockpit systems during inclement weather conditions. The FAA followed it up with a ‘Safety Alert for Operators’ in the last week of December. The alert includes recommended action in the form of ”Notice To Air Missions,” primarily based on previously issued restrictions. This, in turn, is likely to significantly affect air cargo and commercial air travel at most of the biggest airports and highest traffic destinations across the country, with airlines warning that about 4% of daily flights are likely to be delayed, canceled, or diverted.
Although the directives are primarily intended to make 5G expansion and aviation coexist without compromising passenger safety, various airline industry groups have raised concerns about the safety of flights. In an SOS, U.S. Transportation Secretary Pete Buttigieg and FAA Administrator Steve Dickson requested AT&T and Verizon to defer the proposed 5G expansion plans by about two weeks, within which a buffer zone was expected to be identified around airports for safe cohabitation.
Rebuffing the requests as “irresponsible abdication of the operating control required to deploy world-class and globally competitive communications networks,” both AT&T and Verizon vowed to go ahead with their plans. Although they rejected any broader restrictions on the usage of the C-Band spectrum, they pledged not to deploy 5G around airports for about six months. The firms argued that the proposed exclusion zones were identical to those followed by their counterparts in France and FAA’s apprehensions lacked concrete evidence and were merely blown out of proportion.
The FAA has countered these claims by pointing out that France uses a different 5G spectrum compared to that of the United States and it is reportedly further away from the spectrum used for radio altimeters. Various airline trade groups have backed the concerns echoed by FAA and have threatened to seek legal help for the safety of passengers and avert the potential loss of billions if normal flight operations are affected.
Amid all the cacophony, the firm stance by AT&T and Verizon signify that the stakes are relatively high for the carriers as they aim to capitalize on the immense 5G potential and generate healthy ROI. For the record, Verizon was the largest bidder with $45.5 billion worth of bids in the FCC-led C-Band auction for mid-band airwaves that generated about $81.2 billion in gross proceeds, followed by AT&T at $23.4 billion. The auction offered 280 MHz of spectrum for potential 5G deployments over the next few years. While Verizon secured 3,511 of the 5,684 licenses up for grabs, AT&T claimed 1,621.
By virtue of its auction bids, Verizon has secured an average of 161 MHz of C-band nationwide spectrum. The C-Band offers significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas than mmWave, which has a short range and requires a high density of sites to achieve coverage. Consequently, it is deemed a prized asset for carriers like Verizon and AT&T that lack considerable mid-band spectrum holdings.
It remains to be seen how the saga unfolds in the coming weeks and whether it goes on to be one of the biggest slugfests in 2022.
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US Aviation on Collision Course With AT&T (T), Verizon (VZ)?
The aviation industry appears to be in a potential stalemate with the telecom sector as two leading operators refuse to pay heed to the pleas from U.S. officials for the deferment of their 5G expansion plans by about two weeks. Both Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) remain firm on their decision to commercially launch their C-band 5G wireless service on Jan 5 in order to better compete with other countries like China. With the impasse heading for a likely showdown in the legal arena, the new year has apparently brought with it fresh challenges for the Biden administration.
The bone of contention relates to the likely interference of 5G waves within the C-Band spectrum with certain flight operations. The Federal Aviation Administration (“FAA”) has raised concerns that the commercial launch of the C-band wireless service in the 3.7-3.98 GHz frequency band could cause the airwaves to interfere with radar or radio altimeter signals that measure the distance between the aircraft and ground. Data from these devices are fed to the cockpit safety system that helps pilots gauge the air safety metrics and prevent mid-air collision, avoid crashes and ensure a safe landing.
In order to avert any potential disruption in essential safety sensors, the FAA had earlier issued certain flight restrictions that would prevent pilots from operating the automatic landing option and other cockpit systems during inclement weather conditions. The FAA followed it up with a ‘Safety Alert for Operators’ in the last week of December. The alert includes recommended action in the form of ”Notice To Air Missions,” primarily based on previously issued restrictions. This, in turn, is likely to significantly affect air cargo and commercial air travel at most of the biggest airports and highest traffic destinations across the country, with airlines warning that about 4% of daily flights are likely to be delayed, canceled, or diverted.
Although the directives are primarily intended to make 5G expansion and aviation coexist without compromising passenger safety, various airline industry groups have raised concerns about the safety of flights. In an SOS, U.S. Transportation Secretary Pete Buttigieg and FAA Administrator Steve Dickson requested AT&T and Verizon to defer the proposed 5G expansion plans by about two weeks, within which a buffer zone was expected to be identified around airports for safe cohabitation.
Rebuffing the requests as “irresponsible abdication of the operating control required to deploy world-class and globally competitive communications networks,” both AT&T and Verizon vowed to go ahead with their plans. Although they rejected any broader restrictions on the usage of the C-Band spectrum, they pledged not to deploy 5G around airports for about six months. The firms argued that the proposed exclusion zones were identical to those followed by their counterparts in France and FAA’s apprehensions lacked concrete evidence and were merely blown out of proportion.
The FAA has countered these claims by pointing out that France uses a different 5G spectrum compared to that of the United States and it is reportedly further away from the spectrum used for radio altimeters. Various airline trade groups have backed the concerns echoed by FAA and have threatened to seek legal help for the safety of passengers and avert the potential loss of billions if normal flight operations are affected.
Amid all the cacophony, the firm stance by AT&T and Verizon signify that the stakes are relatively high for the carriers as they aim to capitalize on the immense 5G potential and generate healthy ROI. For the record, Verizon was the largest bidder with $45.5 billion worth of bids in the FCC-led C-Band auction for mid-band airwaves that generated about $81.2 billion in gross proceeds, followed by AT&T at $23.4 billion. The auction offered 280 MHz of spectrum for potential 5G deployments over the next few years. While Verizon secured 3,511 of the 5,684 licenses up for grabs, AT&T claimed 1,621.
By virtue of its auction bids, Verizon has secured an average of 161 MHz of C-band nationwide spectrum. The C-Band offers significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas than mmWave, which has a short range and requires a high density of sites to achieve coverage. Consequently, it is deemed a prized asset for carriers like Verizon and AT&T that lack considerable mid-band spectrum holdings.
It remains to be seen how the saga unfolds in the coming weeks and whether it goes on to be one of the biggest slugfests in 2022.