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Why utilities need to have a broadband strategy?

Updated: Nov 16




Earlier this year the FCC cleared the way for utilities to secure 900MHz spectrum for broadband applications. This came after a ruling on unlicensing the 6GHz spectrum which many utilities use for microwave services. This is a fundamental shift from the LTE /4G communications we have so gotten used to.


Utilities have traditionally relied on corporate IT to decide on telecom infrastructure. What technologies to invest in? What kind of a communication infrastructure to develop? How much bandwidth is enough? Such questions are reviewed as part of ongoing use cases in the capital plan. Telecom has been treated as a support infrastructure much like servers and IT data networks. Going forward, however, the growing importance of data communication in utility operations and in light of the FCC rulings, a more strategic approach to utility telecommunications and broadband is required.

Here are a few questions that utility industry leaders, the C-suite for example, should be examining. This is critical to actively drive companies’ future telecom positioning that aligns with business operations and value aspirations for its customers and shareholders. The Covid-19 situation has only elevated the importance of telecom and communication infrastructure.

  1. Should we invest in public or private telecom carriers for broadband? Utilities approach to communication networks has largely been a patchwork of different carriers, private, public, licensed, unlicensed, wired and wireless - of various vintages to serve specific functional requirements. In the broadband category, due to limited service options, utilities have heavily relied on public carriers. Applications such as, video, AR/VR transmission grow in usage, the need for broadband becomes pronounced. The business case to invest in its own private broadband network may become attractive. There are a few utilities that have already made such investments. Indeed, many utilities have been holding and utilizing private spectrum for business operations linked to business/industrial/land transportation (B/ILT) and specialized mobile radio (SMR), for which 900MHz was allocated. With the existing licenses open for reallocation, the real question is how much a utility need to vie for its own private 3/3 MHz broadband segment. The window for allocation may not be long as utilities are not exclusive in this hunt. Manufacturers, transportation and delivery companies like FedEx and UPS can also acquire these licenses. Hence an informed strategy is necessary to determine utility’s next move.

  2. Is the 900MHz spectrum broadband the right choice? Utilities will require a detailed examination of the needs, requirements and the business case for broadband. While our daily lives heavily depend on broadband mainly because for our voice and data needs - e.g, calls over internet, video conferencing, streaming entertainment, etc. utility applications are quite diverse. Traditional SCADA and many control applications require very limited throughput for data transmission - maybe a few times a day, but they need high reliability, low latency and in most cases low power consumption. On the other hand, video surveillance, augmented and virtual reality, and image and video analyses for sensing, monitoring, and control require a lot of data throughput, lower latency and hence a broadband network makes more sense. As business operations and power delivery model changes and trigger new data needs that can revise enterprise risk profile concerning cybersecurity and resiliency, choices made now will have long standing impacts on the business.

  3. What optionality and forwarding value streams will it serve? Many utilities have drawn up grid modernization plans to chart their transition journey. Many utilities are focusing on building and consolidating their operational data and processes on a digital backbone. Many are targeting new set of value pools targeting distributed energy resources and new customer products and services, such as electric vehicle charging network and demand response services. The 900MHz offers present and future commercial opportunities in applications Voice over LTE, Narrowband-IoT, and Mission Critical Push-To-Talk over LTE. As NRECA has championed, broadband can also serve rural and underserved areas that are not attractive to traditional commercial providers due to poor economics of scale.

Utility ambitions vary, hence the revenue opportunities unlocked by the FCC order provides a chance to examine such options, value them and then make a choice.

Participation in the 900MHz spectrum licensing is based on a reallocation mechanism from incumbent license holders using a market-based negotiation mechanism on a county-by-county basis. To work through this utilities, would have to grasp the current and future needs and necessities, costs and benefits, reasonableness and prudence, headroom and concessions, and conditions to walk-away from. Utility’s broadband strategy will require some rapid analyses and understanding of the options and tradeoffs. It will require sharpening the utilities’ grid modernization plans and be intentional deliberate about their telecom choice.

The current Covid-19 crisis has exemplified the importance of resilience, of virtual work, of remote sensing and intelligence. The FCC has created a policy that interests two critical infrastructure - power and telecom and hence has far reaching impacts. It is about time that the utility leaders start examining their broadband agenda.

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