What do FAA C-band delays mean for AT&T, Verizon?

AT&T and Verizon this week agreed to delay their respective C-band spectrum rollouts by one month after the Federal Aviation Administration (FAA) issued safety concerns – a situation that has somewhat surprised analysts and raised the question of impact for carriers.

On Tuesday the FAA issued a special bulletin to pilots, airlines and others, although the aviation industry had brought up warnings before that C-band frequencies auctioned (3.7-3.98 GHz) earlier this year could interfere with plane safety equipment, related to take offs and landings, that operates in nearby 4.2-4.4 GHz band.

RELATED: FAA issues warning on potential safety risks from 5G C-band

It’s not the first time the issue has been raised, with concerns going back to at least 2018. Recently in August aviation stakeholders told the FCC that short-term measures were still needed before December 5, which is when the first 100 MHz batch of C-band spectrum is expected to be ready for initial deployments. On Thursday AT&T and Verizon said they will now voluntarily wait until January 5 to start activating the so-called "A-block" portion of spectrum, which sits at 3.7-3.8 GHz, to allow the FAA to assess any impact on safety.

On the carrier side of things, putting C-band to use has been highly anticipated since the blockbuster FCC auction that raised more than $81 billion for licenses – including about $45 billion from Verizon and $23 billion from AT&T (not including billions doled out for incentive payments and clearing costs).

RELATED: AT&T, Verizon postpone C-Band rollouts until air safety review

The mid-band frequencies are a way to bolster capacity and improve the 5G experience while also catching up to T-Mobile – which has been deploying mid-band 2.5 GHz ahead of when rivals could get their hands on new mid-band spectrum for 5G.

Financial and industry analysts were surprised at the FAA’s seemingly last-minute swoop in as well as carriers’ agreement to delay deployment.

The FAA had said it’s collaborating with the FCC and NTIA to evaluate the need for mitigation beyond recommendations in this week’s bulletin.

One month not a big deal

So how much of an impact might a one-month delay have, and what happens if it goes longer? A general takeaway is that delaying until January 5 won’t make that big of a difference for Verizon or AT&T.

Roger Entner, founder of Recon Analytics, said in reality the delay will be more like two or three weeks, as he doesn't expect much work would’ve been done deployment-wise for part of the holiday season.

He pointed out that other countries around the globe are operating in these frequencies with 5G and haven’t had issues, saying the problem is with older planes that don’t have upgraded or retrofitted radio altimeters.

RELATED: Aviation, wireless industries clash over C-band interference

It’s an argument the wireless industry has brought up itself in responses critical of aviation industry studies, citing 5G deployments in Japan, South Korea and Europe, that haven’t seen problems.

The FAA’s own announcement this week stated that there haven’t been proven reports of harmful interference internationally.

“The solution is to upgrade these altimeters,” Entner said of the airplane equipment that’s at the center of the concerns. “Here [the aviation industry] got another month to fix their problem.”

David Heger, equity research analyst at Edward Jones, told Fierce that while the one-month delay was a bit of a surprise, from a financial point of view it doesn’t have much impact on Verizon or AT&T near-term. He cited decent subscriber growth by both carriers which are each selling 5G phones, even without C-band. Right now, the 5G angle isn’t moving the needle much for consumers in terms of choosing between carriers, he added.

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