FCC rules on 5G RF

Here is the SA post with a reference to WSJ – but you need a subscription, and I do not have one. So … here’s the FCC document

Here’s the quote from SA, quote:

“5G doesn’t pose new cellphone radiation threats, according to the FCC, which spent six years reviewing the issue and receiving public feedback. The regulator voted unanimously this week to keep in place standards for how much exposure to the radio-frequency energy cellphones and antennas emit is safe. The rules cover consumer devices, and the 5G infrastructure used on cell towers and rooftops, as the four major U.S. wireless carriers race to roll out the next-generation of wireless networks.”

Here’s an interesting quote from the FCC report – in the opening summary statements, quote (my bold):

“Specifically, we propose to formalize a an additional limit for localized RF exposure and the associated methodology for compliance for portable devices operating at high frequencies (gigahertz (GHz) frequencies). on top of our already existing limits that apply at these frequencies, and propose to extend this to terahertz (THz) frequencies as well. We also propose to allow wireless power transfer (WPT) equipment under Part 15 and 18 of the Commission’s rules and propose specific exposure limits for such operations. “

Jobs day – read BLS

https://www.bls.gov/news.release/empsit.nr0.htm

While one can hardly find fault in the job numbers released today, it’s important to read the report rather than listen to everybody’s spin …

Here’s my caution, quote: “Manufacturing employment rose by 54,000 in November, following a decline of 43,000 in the prior month. Within manufacturing, employment in motor vehicles and parts was up by 41,000 in November, reflecting the return of workers who were on strike in October. “

Roughly 40,000 of that BIG number were people coming back to work after strikes. Still a good report and will push yields and equity up. Enjoy the ride

5G usage models not yet defined

A SA post this morning, echoed my pespective that the 5G usage models are evolving and as they do will really influence the infrastructure build out, capabilities, products and services (and the resulting profitable companies). This corresponds to later phase 2 and phase 3 in my 5G narrative. Here is the key quote for me (my bold):

The reality is there will not be a dominant model of edge computing in the early stages of 5G network rollout. Right now, we have separate models for implementing 5G networks, most of which are layered over the top of existing 4G LTE systems. True, stand-alone 5G will not begin to be implemented widely until 2020, and even then they must remain interoperable with 4G networks for the foreseeable future due to the amount of investment and dependencies built upon those existing network models.

Some use cases for 5G edge computing include processing at the radio terminal for applications in which lowest latency and highest accessibility to the user are desired. Other models include mini, cloud-enabled data centers being implemented at wireless distribution points throughout the network. And others have 5G as a relatively dumb pipe connecting various regional virtual cloud data hubs in a mesh network that is virtualized up and down the service stack.

Each use case has different pros and cons in which the final look and feel of 5G network computing won’t be determined until the money flows from users is mapped out. It will be years before the structure of edge networks are determined and fully codified into new standards, protocols, and economic models.

This seems important but didn’t leave the lab

https://seekingalpha.com/pr/17710368-verizon-qualcomm-ericsson-demonstrate-dynamic-spectrum-sharing

About the trial
This latest 5G milestone in the US is an over-the-air, Dynamic Spectrum Sharing (DSS) 5G data call that was successfully carried out in Ericsson’s lab in Richardson, Texas, by Verizon, Ericsson, and Qualcomm Technologies.  Ericsson Spectrum Sharing, part of Ericsson Radio System, enables a quick, flexible, and cost-effective upgrade to 5G within existing 4G carriers. The solution will dynamically share spectrum between 4G and 5G carriers based on traffic demand. The switch between carriers happens within milliseconds, which minimizes spectrum waste and allows for best end-user performance. It is compatible with all 5G FDD capable smartphones and other devices based on the Snapdragon 5G Mobile Platform with the Snapdragon X55 5G Modem-RF System, supporting the standardized spectrum sharing functionality.

CSCO … i was going to post on it …

A SA author beat me to the punch as priorities kept me from posting something intelligent. I commented on the author and will be spending time between now and EOY fleshing out this thesis (not specific to CSCO but it will be included).

SA Post https://seekingalpha.com/article/4308030-real-story-behind-ciscos-weak-outlook

I agree w/ timelines, and I see 2021 as the beginning of a revenue upward cycle being driven by enterprise upgrades to meet 5G data and M2M usage demands. Between now and then, the macro winds will blow … a great buying opp in 2020 may surface, and if that happens, I will increase my % of CSCO to 7-10% from current 4.5% (long time kernel holding – cost basis <$15)

This 3 phase 5G implementation / roll out is the heart of the thesis mentioned.

Quite the table

Heisenberg pulled out this quote from the report:

The alarm bells are ringing loud and clear. Unless governments take decisive action to help boost investment, adapt their economies to the challenges of our time and build an open, fair and rules-based trading system, we are heading for a long-term future of low growth and declining living standards.

A new status quo for financial markets?

A Heisenberg post this morning has two elements in it – one BofA’s 2020 equity look-ahead, and two about the new status quo as a result of responses to 2008/09 crisis. The second is way more interesting imho. I found this piece brilliant.

He quotes often quoted Deutsche Bank’s analyst Kocic:

In its core, policy response to the crises was an extension of what in a political context is known as the state of exception: Market laws had to be suspended to restore normal functioning of the markets. The intrinsic contradiction of this maneuver is resolved only by understanding that suspension is temporary. Stimulus will have to be unwound. However, the accommodation has been in place for a very long time, during which traditional transmission mechanisms have atrophied and investors’ mindset has changed in a way that has altered irreversibly their behavior, the market functioning and its dynamics.

Engineering a state of exception comes with considerable risk. The Fed (and central banks in general) carries an implicit responsibility for orderly reemancipation of the markets, which makes stimulus unwind especially tricky. This highlights the deep dichotomy of power: While a state of exception is an exercise of power, there is a clear tendency to disown that power. And the only way to avoid facing the underlying dilemma is to never give up the power. This creates a new status quo — a permanent state of exception.

The question to be asked and answered over time and several different times is … are we now living in this permanent state of exception?

Not since 2000

Intel (INTC)

From Mott Capital Management: “Intel is testing a break out of its own around $59 with the potential for a push higher to prices not seen since September 2000 at $64.”

I have so much less than once upon a time and those funds did MUCH better elsewhere, but I’ll take this rise for time being.

5G & Cell Tower REITs

Hoya Capital posted a view on the big Cell Tower REITs. While their update is one of the best they’ve produced recently, I provided the following feedback.

@Hoya Capital Real Estate one of your better pieces imho. this is a complicated space and I would like to see a ‘usage’ view on the tower business contrasting 2 major usage models – a) consumer mobility (aka phones) and b) machine to machine communications. I believe that the latter in the 5G game will generate the majority of the data eventually (at least 5 years out). Have you all looked at that business driver vis-à-vis the tower REITs to determine if the usage models will change REIT pricing power?

I will update on their response if received. This is a very complicated space and investors are putting down big $ with little understanding. To follow up on my post yesterday … due diligence is required and can be hard work. Carry on!

Financial due diligence – reminder

A recent post at SA got me going … i own a small slice of this company and had missed this in my financial analysis due diligence. I made a mistake (was stupid), and now need to correct it. I will exit the postion quickly. Here is my comment to the author

Thank you for this analysis … I have a small portion of LAND and will discard quickly based on this as I had missed it. Seems way out of whack and with the games FPI management played back a bit, one would think the farm REITs would come to a ‘squeaky clean’ view. Not there.Also, I tried to reconcile this w/ www.investing.com/… … – no go even at the ‘roll up’ number unless the two sources are using different time periods (would be bizarre)Sad, as I too thought this was a plausible play on a real asset in limited supply … Good work on your part and reminder to all that financial due diligence takes effort.`

Hats off to the author for doing the needed grunt work, and ‘not to self’ do you due diligence better!

Heisenberg post today – corp. buybacks

Heisenberg report put out a great piece today on corporate buybacks using bank reports as is their practice. While there are political and economic arguments to be made about buybacks, that’s not their intent nor mine. Regardless of your opinion, buybacks are an element of stock selection and portfolio management. We need to understand their potential implications and risks.

Here are a couple of graphical apertifs

Source= Goldman