Less than a month from today, the world will witness a modern David versus Goliath story play out.
On November 14th, David Beyerle, a communications engineer at Penn State University's IT department, will go toe to toe with a long list of major internet service providers (ISPs).
The ticket includes some of the most powerful carriers on the planet, namely Verizon Wireless, T-Mobile, and AT&T.
If you’re hoping for blood, you won’t find any in this fight. The battle will be overseen by the U.S. Federal Communications Commission (FCC) in an orderly fashion. No fists will be thrown and no stones will be flung. Nonetheless, it will be a fierce and hard-fought bout.
The prize won’t be anything you can touch or hold in your hands, yet it will be incredibly valuable to those who wish to wield it. Largely ignored by the mainstream media, the battle for something known as "millimeter waves" is one where investors will want a front-row seat.
Millimeter Waves: What Are They, and Why Are They So Valuable?
Millimeter waves, I have to admit, aren’t exactly a sexy topic. Most people have probably never even heard of millimeter waves before, but there’s a reason multibillion-dollar conglomerates are lining up to bid for them in a series of highly anticipated government auctions.
There’s a reason even underdogs like David Beyerle are hoping for a moonshot to get their hands on them...
Occupying the spectrum of frequencies between 24 GHz and 28 GHz, millimeter waves are much like any other form of wireless communication we’re already familiar with. Radio, cellular, and satellite all operate within specific ranges of wavelengths and frequencies.
Sending information through thin air may seem like magic to some, but the technology is based entirely in physics. Imperceptible to the human eye, electromagnetic waves of all shapes and sizes are constantly flowing through (or bouncing off) you at any given moment.
These waves all carry a set of physical properties that determine how they can be used for human benefit (or even harm). Frequency, wavelength, and photon energy ultimately determine what are known as propagation characteristics, or the way waves move through the atmosphere.
Again, this isn’t exactly enthralling information, but it absolutely matters. The point is that data doesn’t just travel through empty air; it rides physical waves, which are ultimately finite in supply.
This is why local television and radio broadcasters have unique “channel” assignments. Designating channels to specific broadcasters allows for multiple routes of communication without interference.
If we didn’t divvy up these channels, wireless communication would be as effective as a two-way highway with no lanes and no median. Hence the upcoming FCC auction for millimeter wave, a spectrum that will be crucial in the next generation of mobile communication, or 5G.
The Very Foundation of 5G
Without digging too deep into the details, millimeter waves operate within a range of relatively short wavelengths and high frequencies. This combination makes them incredibly effective at sending large amounts of data (high bandwidth) through the air to many different devices at once.
Now, high bandwidth on its own, of course, isn’t anything new. Infrared and optical wavelengths, in fact, can support higher data rates than millimeter waves can. These shorter wavelengths, however, are easily disrupted by the atmosphere. All it takes is a little bit of rain or fog to disrupt the signal, hence the use of optical fiber to prevent any interference.
Millimeter waves, though, are much more durable in the air. Not quite as durable as radio waves, mind you, but enough to get the job done.
In short, millimeter waves exist at the perfect intersection between distance and bandwidth. In the balancing act of the electromagnetic spectrum, they are essential to increasing the capacity of wireless communication as far as we need it today.
Needless to say, Verizon, AT&T, and T-Mobile have incredible incentive to control parts of the millimeter spectrum. Barring an act of God on behalf of David Beyerle, they’ll easily outbid the remaining competition when the FCC auctions kick off on November 14th.Why This All Matters to You
The millimeter wave spectrum may hold incredible value for ISPs, but it isn’t enough on its own. At the end of the day, these ISPs need access points to send and receive those signals.
Because millimeter waves can only travel so far, mobile carriers and their infrastructure partners have to tighten the net, so to speak. Instead of enormous cell towers every 20 miles or so, “small cell” towers are being deployed across the U.S. (and soon the entire world) in order to make full use of that millimeter spectrum.
In 2019 you’re going to start seeing these small cells popping up all over the place, if you haven’t already. They’ll be deployed on city sidewalks (perhaps disguised as lamp posts to conform to specific regulations), atop parking garages, and elsewhere.
All told, North American enterprises are expected to deploy a total of 400,000 small cells by the end of 2018, up from 292,000 in 2017. By 2020, that number is forecast to reach 552,000 small cells per year. By 2025, the number is expected to reach 849,000.
Needless to say this is going to be an explosive trend for the next half-decade and then some. For investors, it’s a potential gold mine, as the companies behind these small cell deployments have yet to reach the attention of the masses.
Frankly, we don’t expect that to last much longer, as 5G is less than a year away from becoming truly mainstream, so there’s a sense of urgency here I cannot stress enough.
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