The aviation industry appears to be at a potential stalemate with the telecommunications industry, as two leading operators refuse to heed calls by U.S. officials to postpone their 5G expansion plans for about two weeks. Both Verizon Communications Inc. VZ and AT&T Inc. T remains firm on its decision to commercially launch its 5G C-band wireless service on January 5 in order to better compete with other countries like China. With the stalemate heading into a likely showdown in the legal arena, the New Year has apparently brought new challenges for the Biden administration.
The bone of contention is the likely interference of 5G waves in the C-band spectrum with certain flight operations. The Federal Aviation Administration (“FAA”) has raised concerns that the commercial launch of C-band wireless service in the 3.7-3.98 GHz frequency band could cause interference between radio waves. and radar or radio altimeter signals which measure the distance between aircraft. and ground. Data from these devices is transmitted to the flight deck safety system, which helps pilots assess aviation safety measures and prevent mid-air collisions, avoid accidents and ensure a safe landing.
In order to avoid any potential disruption of critical safety sensors, the FAA had previously issued certain flight restrictions that would prevent pilots from using the automatic landing option and other cockpit systems in inclement weather. The FAA followed it up with a “safety alert for operators” during the last week of December. The alert includes recommended action in the form of an âadvisory to air missionsâ, primarily based on previously issued restrictions. This, in turn, is likely to dramatically affect air cargo and commercial travel at many of the country’s largest airports and busiest destinations, with airlines warning that around 4% of daily flights are likely to drop. ” be delayed, canceled or diverted. .
While the guidelines are primarily aimed at making the expansion of 5G and aviation coexist without compromising passenger safety, various groups in the airline industry have raised concerns about flight safety. In an SOS, US Transportation Secretary Pete Buttigieg and FAA Administrator Steve Dickson asked AT&T and Verizon to postpone 5G expansion plans for about two weeks, in which a buffer zone was to be identified around airports for safe cohabitation.
Dismissing demands as “the irresponsible abdication of operational control required to deploy world-class, globally competitive communications networks,” AT&T and Verizon pledged to continue with their plans. Although they have rejected any broader restrictions on the use of C-band spectrum, they have pledged not to roll out 5G around airports for about six months. The companies argued that the proposed exclusion zones were identical to those followed by their counterparts in France and the FAA’s apprehensions lacked concrete evidence and were simply exaggerated.
The FAA denied these claims, pointing out that France uses a different 5G spectrum than the United States and that it would be further from the spectrum used for radio altimeters. Various airline business groups backed concerns expressed by the FAA and threatened to seek legal aid for passenger safety and to avoid the potential loss of billions if normal airline operations were affected.
Amid all the cacophony, AT&T and Verizon’s tough stance means the stakes are relatively high for operators as they aim to capitalize on the immense potential of 5G and generate a healthy return on investment. For the record, Verizon was the biggest bidder with $ 45.5 billion in auctions in the FCC-led C-band auction for mid-range airwaves that generated around $ 81.2 billion. in gross revenue, followed by AT&T at $ 23.4 billion. The auction offered 280 MHz of spectrum for potential 5G deployments over the next several years. While Verizon obtained 3,511 of the 5,684 licenses up for grabs, AT&T claimed 1,621.
Under its auction, Verizon secured an average of 161 MHz of C-band spectrum nationwide. C-band offers high bandwidth with better propagation characteristics for optimal coverage in rural and urban areas than mmWave, which has short range and requires high site density to achieve coverage. Hence, it is seen as a valuable asset for operators such as Verizon and AT&T who lack considerable resources in the mid-band spectrum.
It remains to be seen how the saga plays out in the coming weeks and whether it becomes one of the biggest slugfests in 2022.
Top 10 Zacks stocks for 2022
In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?
From its creation in 2012 until November, the Top 10 Zacks stocks gained an impressive + 962.5% vs. + 329.4% for the S&P 500. Now our research director combs through 4,000 companies covered by the Zacks rankings to select the top 10 tickers to buy and hold . Don’t miss your chance to participate in these actions when they release on January 3.
Be the first in the new Top 10 stocks >>
Click to get this free report
AT&T Inc. (T): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks investment research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.