Can Cable Fight 5G?

The big cable companies are clearly worried about 5G. They look at the recently introduced Verizon 5G product and they understand that they are going to see something similar over time in all of their metropolitan markets. Verizon is selling 5G broadband – currently at 300 Mbps second, but promised to get faster in the future – for $70 standalone or for $50 for those with Verizon cellular.

This is the nightmare scenario for them because they have finally grown to the point where they are approaching a near monopoly in most markets. They have successfully competed with DSL and quarter after quarter have been taking DSL customers from the telcos. In possibly the last death knell for DSL, both Comcast and Charter recently increased speeds of their base products to at least 200 Mbps. Those speeds makes it hard for anybody to justify buying DSL at 50 Mbps or slower.

The big cable companies have started to raise broadband rates to take advantage of their near-monopoly situation. Charter just recently raised bundled broadband prices by $5 per month – the biggest broadband price increase I can remember in a decade or more. Last year a major Wall Street analyst advised Comcast that their basic broadband price ought to be $90.

But now comes fixed 5G. It’s possible that Verizon has found a better bundle than the cable companies because of the number of households that already have cellphones. It’s got to be tempting to homes to buy fast broadband for only $50 per month in a bundle.

This fixed 5G competition won’t come over night. Verizon is launching 5G in urban markets where they already have fiber. Nobody knows how fast they will really implement the product, due mostly to distrust of a string of other Verizon hype about 5G. But over time the fixed 5G will hit markets. Assuming Verizon is successful, then others will follow them into the market. I’m already seeing some places where companies American Tower are building 5G ‘hotels’ at poles, which are vaults large enough to accommodate several 5G providers at the same location.

We got a clue recently about how the cable companies might fight back against 5G. A number of big cable companies like Comcast, Charter, Cox and Midco announced that they will be implementing the new 10 Gbps technology upgrade from CableLabs. These cable companies just recently introduced gigabit service using DOCSIS 3.1. It looks like the cable companies will fight against 5G with speed. It sounds like they will advertise speeds far faster than the 5G speeds and try to win the speed war.

But there is a problem with that strategy. Cable systems with the DOCSIS 3.1 upgrade can clearly offer gigabit speeds, but in reality cable company networks aren’t ready or able to deliver that much speed to everybody. Fiber networks can easily deliver a gigabit to every customer, and with an electronics upgrade can offer 10 Gbps to everybody, as is happening in parts of South Korea. But cable networks have an inherent weakness that makes gigabit speed problematical.

Cable networks are still shared networks and all of the customers in a node share the bandwidth. Most cable nodes are still large with 150 – 300 customers in each neighborhood node, and some with many more. If even a few customers start really use gigabit speeds then the speed for everybody else in the node will deteriorate. That’s the issue that caused cable networks to bog done in the evenings a decade ago. Cable companies fixed the problem then by ‘splitting’ the nodes, meaning that they build more fiber to reduce the number of homes in each node. If the cable companies want to really start pushing gigabit broadband, and even faster speeds, then they are faced with that same dilemma again and they will need another round, or even two rounds of node splits.

For now I have serious doubts about whether Comcast and Charter are even serious about their gigabit products. Comcast gigabit today costs $140 plus $10 for the modem. The prices are lower in markets where the company is competing against fiber, and customers can also negotiate contract deals to get the gigabit price closer to $100. Charter has similar pricing – in Oahu where there is competition they offer a gigabit for $105, and their price elsewhere seem to be around $125.

Both of these companies are setting gigabit prices far above Google’s Fiber’s $70 gigabit. The current cable company gigabit is not a serious competitor to Verizon’s $50 – $70 price for 300 Mbps. I have a hard time thinking the cable companies can compete on speed alone – it’s got to be a combination of speed and price. The cable companies can compete well against 5G if they are willing to price a gigabit at the $70 Verizon 5G price and then use their current $100+ price for 10 Gbps. That pricing strategy will cost them a lot of money in node upgrades, but they would be smart to consider it. The biggest cable companies have already admitted that their ultimate network needs to be fiber – but they’ve been hoping to milk the existing coaxial networks for another decade or two. Any work they do today to reduce node size would be one more step towards an eventual all-fiber network – and could help to stave off 5G.

It’s going to be an interesting battle to watch, because if we’ve learned anything in this industry it’s that it’s hard to win customers back after you lose them. The cable companies currently have most of the urban broadband customers and they need to act now to fight 5G – not wait until they have lost 30% of the market.

4 thoughts on “Can Cable Fight 5G?

  1. This seems a whole lot less important considering:

    1) Most end users don’t know what their throughput speed is. As long as they are able to run their apps and service the devices in their home, they’re good. The more critical choice factor is price.

    2) The higher frequencies used by 5G networks can’t penetrate objects, severely limiting their utility.

  2. 300Mbps is what I hear 5G will offer and the cost is absolutely worth it for existing Verizon wireless customers. In fact, it’s enough to convince me to switch to Verizon wireless. Living in the backyard of Comcast’s home area, I can tell you they are sadly mistaken thinking they will win this war because of Docsis 3.1. Those Docsis 3.1 speeds are meaningless in just about every residential household out there,. Not to mention it is a fact almost every cost conscious individual currently paying a cable provider, hates that provider with a passion. 5G
    internet at $50 for 300Mbps vs Comcast 250Mbps @ $94? Yeah, ok. And sling TV for $25 with HBO Go for $15 with Verizon comes to a monthly internet Tv bundle of $90 and currently I am paying Comcast $245, Rip…….Off! Insane. This isn’t a speed war. It’s a cost war. I mean, what resident needs 10Gb internet? Cable companies like Comcast winning a speed war is more of an ego trip

    Educating people to get local programming via antenna and using an online streaming service with affordable internet like 5G @ $50 is going to put a hurtin on cable. Local programming is costing homeowners local taxes that resemble mafia-like territorial demands for cash. Get an antenna if at all possible, and avoid those taxes, I chose to eliminate sports network but comcast says I still have to pay the $8.25 a month tax because the news stations like ABC and CBS and NBC have sports news for local sports teams. Thats just BS. But an antenna solves that.

    Until cable is scrutinized more heavily for unregulated fees, they will keep adding more fees and hiking rates whenever they feel like it or when they need to payoff local political ties. I should owe nothing to the local sports teams or the news that insists on talking about them.Just like I shouldn’t be giving the the same rate of property tax to school boards when I have no kids attending school. Childless households should not be paying the same rate as families who have kids and use the public schools system. These issues are part of an ongoing quest to bleed humanity of more and more money. We can’t trust local state and federal governments to use it wisely. History has proven that tax dollars are often wasted and used for hidden agendas, payoffs,and worst. They work for us, we are “their” boss!

    I have to assume Comcast used their political ties in the northeast to, let’s say,…. “deter” the installation of Fiber in ALOT of areas, making sure they didn’t have a competitor. I heard Verizon had to install fber to all municipalities and schools first or they were not allowed to install it to the residential areas. That would have delayed the availability of fiber to all those residential areas for several years so it was a definite C*** BlocK

    People are starting to hold on to their money tighter these days. Streaming services are common choices for millennials and younger generations who know how to make sensible cost conscious choices. Like going with the service that is fast enough for less money. Bye Bye Comcast

    • The technology you are talking about is best described as fiber-to-the-curb. Unless you are lucky enough to live in one of the handful of communities that Verizon is building, don’t hold your breath. It turns out that deploying this technology is at least as expensive as serving fiber-to-the-home, so there is not going to be a mad rush to bring the wireless loop technology to residential neighborhoods – with the impediment being building the fiber along the streets.

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