Clearing Mid-range Spectrum

The FCC is in the process of trying to free up mid-range spectrum for 5G. They just opened a Notice of Proposed Rulemaking looking at 2.5 GHz spectrum, located in the contiguous block between 2495 and 2690 MHz. Overall this is the largest contiguous block of mid-range spectrum. Over half of the spectrum sits idle today, particularly in rural America. The history of this spectrum demonstrates the complications involved in trying to reposition spectrum for broadband and cellular use.

The frequency was first assigned by the FCC in 1963 when it was made available to school systems to transmit educational TV between multiple schools. The spectrum band was called Instructional Television Fixed Service (ITFS). The band was divided into twenty channels and could transmit a TV signal up to about 35 miles. I grew up in a school system that used the technology and from elementary school onward we had a number of classes taught on the TV. Implementing the technology was expensive and much of the spectrum was never claimed.

In 1972 the FCC recognized the underuse of the spectrum and allowed commercial operators to use the bands of 2150 to 2162 MHz on an unlicensed basis for pay-TV transmissions to rooftop antennas. The spectrum could only carry a few TV channels and in the 1970s was used in many markets to transmit the early version of HBO and Nickelodeon. This spectrum band was known as Multipoint Distribution Service (MDS) and also was good for about 35 miles.

Reacting to pressure from cellular companies, the FCC reallocated eight additional channels of the spectrum for commercial use. Added to the MDS spectrum this became known as Multichannel Multipoint Distribution Service (MMDS). At the time this displaced a few school systems and anybody using the spectrum had to pay to move a school system to another workable channel. This spectrum was granted upon request to operators for specific markets.

In 1991 the FCC changed the rules for MMDS and allowed the channels to be used to transmit commercial TV signals. In 1995 any unused MMDS spectrum was sold under one of the first FCC auctions, which was the first to divide service areas into the geographic areas known as Basic Trading Areas (or BTAs) that are still used today. Before this auction, the spectrum was awarded in 35-mile circles called Geographic Service Areas (GSAs). The existing GSAs were left in place and the spectrum sold at auction had to work around existing GSAs.

The FCC started getting pressure from wireless companies to allow for the two-way transmission of data in the frequency (up to now it had been all one-way delivery to a customer site). In 2005 the FCC changed the rules and renamed the block of spectrum as Broadband Radio Service (BRS). This added significant value to licenses since the spectrum could now be repositioned for cellular usage.

At this point, Clearwire entered the picture and saw the value of the spectrum. They offered to buy or lease the spectrum from school systems at prices far lower than market value and were able to amass the right to use a huge amount of the spectrum nationwide. Clearwire never activated much of the spectrum and was in danger of losing the rights to use it. In 2013 Sprint purchased Clearwire, and Sprint is the only cellular company using the spectrum band today.

Today the spectrum band has all sorts of users. There are still school districts using the spectrum to transmit cable TV. There are still license holders who never stopped using the 35-mile GSA areas. There are still MMDS license holders who found a commercial use for the spectrum. And Sprint holds much of the spectrum not held by these other parties.

The FCC is wrestling in the NPRM with how to undo the history of the spectrum to make it more valuable to the industry. Education advocates are still hoping to play in the space since much of the spectrum sits idle in rural America (as is true with a lot of cellular and other mid-range spectrum). The other cellular carriers would like to see chunks of the spectrum sold at auction. Other existing license holders are fighting to extract the biggest value out of any change of control of the spectrum.

The challenge for repositioning this spectrum is complicated because the deployment of the spectrum differs widely today by market. The FCC is struggling to find an easy set of rules to put the genie back in the bottle and start over again. In terms of value for 5G, this spectrum sits in a sweet spot in terms of coverage characteristics. Using the spectrum for cellular data is probably the best use of the spectrum, but the FCC has to step carefully to do this in such a way as to not end up in court cases for years disputing any order. Reallocating spectrum is probably the most difficult thing the FCC does and it’s not hard to see why when you look at the history of this particular block of spectrum and realize that every block of spectrum has a similar messy past.

AT&T and Augmented Reality

Lately it seems like I find a news article almost every week talking about new ways that people are using broadband. The latest news is an announcement that AT&T is selling Magic Leap augmented reality headsets in six cities plus online.

The AT&T launch is being coordinated with the release of an augmented reality immersive experience that will bring The Game of Thrones into people’s homes with a themed gaming experience called The Dead Must Die, with a teaser in this trailer.

Augmented reality differs from virtual reality in that augmented reality overlays images into the local environment. A user will see characters in their living room as opposed to being immersed in a total imaginary environment with virtual reality.

Magic Leap is one of the most interesting tech start-ups. They started in 2014 with a $542 million investment, and since then have raised over $2.3 billion dollars. The company’s investors and advisors include people like Alibaba executive vice chair Joe Tsai and director Steven Spielberg. There have been rumors over the years of an impending product, but until now they’ve never brought a product to market. AT&T will be selling Magic Leap’s first headset, called the Magic Leap One Creator Edition for a price of $2,295. The mass-market headset will surely cost a lot less.

AT&T’s interest in the technology extends past selling the headsets. Magic Leap recently signed a deal with the NBA and its broadcast partner Turner which is now owned by AT&T and will obviously be looking at augmented reality broadcasts of basketball games.

AT&T’s interest goes even far beyond that and they are looking at the Magic Leap technology as the entry into the spatial Internet – moving today’s web experience to three dimensions. AT&T sees the Magic Leap headset as the entry into bringing virtual reality to industries like healthcare, retail and manufacturing. They envision people shopping in 3D, doctors getting 3D computer assistance for visualizing a patient during an operating, and manufacturer workers aided by overlaid 3D blueprints on the manufacturing floor.

While the Magic Leap headset will work on WiFi today, AT&T is promoting Magic Leap as part of their 5G Innovation Program. AT&T is touting this as a technology that will benefit greatly from 5G, which will allow users to go mobile and use the augmented reality technology anywhere.

I couldn’t find any references to the amount of bandwidth used by this first-generation headset, but it has to be significant. Looking at the Game of Thrones application, a user is immersed in a 3D environment and can move and interact with elements in the augmented reality. That means a constant transmission of the elements in the 3D environment. I have to think that is at least equivalent to several simultaneous video transmissions. Regardless of the bandwidth used today, you can bet that as augmented reality becomes mainstream that content makers will find ways to use greater bandwidth.

We are already facing a big increase in bandwidth that is needed to support gaming from the cloud – as is now being pushed by the major game vendors. Layering augmented reality on top of that big data stream will increase bandwidth needs by another major increment.

The Fastest and Slowest Internet in the US

The web site HighSpeedInternet.com has calculated and ranked the average Internet speeds by state. The site offers a speed test and then connects visitors to the web pages for the various ISPs in each zip code in the country. I have to imagine the site makes a commission for broadband customers that subscribe through their links.

Not surprisingly, the east coast states with Verizon FiOS ranked at the top of the list for Internet speeds since many customers in those states have the choice between a fiber network and a big cable company network.

For example, Maryland was top on the list with an average speed of 65 Mbps, as measured by the site’s speed tests. This was followed by New Jersey at 59.6 Mbps, Delaware at 59.1 Mbps, Rhode Island at 56.8 Mbps and Virginia at 56 Mbps.

Even though they are at the top of the list, Maryland is like most states and there are still rural areas of the state with slow or non-existent broadband. The average speed test results are the aggregation of all of the various kinds of broadband customers in the state:

  • Customers with fast Verizon FiOS products
  • Customers with fast broadband from Comcast, the largest ISP in the state
  • Customers that have elected slower, but less expensive DSL options
  • Rural customers with inferior broadband connections

Considering all of the types of customers in the state, an average speed test result of 65 Mbps is impressive. This means that a lot of households in the state have speeds of 65 Mbps or faster. That’s not a surprise considering that both Verizon FiOS and Comcast have base product speeds considerably faster than 65 Mbps. If I was a Maryland politician, I’d be more interested in the distribution curve making up this average. I’d want to know how many speed tests were done by households getting only a few Mbps speeds. I’d want to know how many gigabit homes were in the mix – gigabit is so much faster than the other broadband products that it pulls up the average speed.

I’d also be interested in speeds by zip code. I took a look at the FCC broadband data reported on the 477 forms just for the city of Baltimore and I see widely disparate neighborhoods in terms of broadband adoption. There are numerous neighborhoods just north of downtown Baltimore with broadband adoption rates as low as 30%, and numerous neighborhoods under 40%. Just south of downtown and in the northernmost extremes of the city, the broadband adoption rates are between 80% and 90%. I have to guess that the average broadband speeds are also quite different in these various neighborhoods.

I’ve always wondered about the accuracy of compiling the results of mass speed tests. Who takes these tests? Are people with broadband issues more likely to take the tests? I have a friend who has gigabit broadband and he tests his speed all of the time just to see that he’s still getting what’s he’s paying for (just FYI, he’s never measured a true gigabit, just readings in the high 900s Mbps). I take a speed test every time I read something about speeds. I took the speed test at this site from my office and got a download speed of 43 Mbps. My office happens to be in the most distant corner of the house from the incoming cable modem, and at the connection to the Charter modem we get 135 Mbps. My slower results on this test are due to WiFi and yet this website will log me as an underperforming Charter connection.

There were five states at the bottom of the ranking. Last was Alaska at 17 Mbps, Mississippi at 24.8 Mbps, Idaho at 25.3 Mbps, Montana at 25.7 Mbps and Maine at 26 Mbps. That’s five states where the average internet speed is at or below the FCC’s definition of broadband.

The speeds in Alaska are understandable due to the remoteness of many of the communities. There are still numerous towns and villages that receive Internet backhaul through satellite links. I recently read that the first fiber connection between the US mainland and Alaska is just now being built. That might help speeds some, but there is a long way to go to string fiber backhaul to the remote parts of the state.

Mostly what the bottom of the scale shows is that states that are both rural and somewhat poor end up at the bottom of the list. Interestingly, the states with the lowest household densities such as Wyoming and South Dakota are not in the bottom five due to the widespread presence of rural fiber built by small telcos.

What most matters about this kind of headline is that even in the states with fast broadband there are still plenty of customers with lousy broadband. I would hope that Maryland politicians don’t look at this headline and think that their job is done – by square miles of geography the majority of the state still lacks good broadband.

Broadband and Food Safety

I recently saw a presentation that showed how food safety is starting to rely on good rural broadband. I’ve already witnessed many other ways that farmers use broadband like precision farming, herd monitoring, and drone surveillance, but food safety was a new concept for me.

The presentation centered around the romaine lettuce scare of a few months ago. The food industry was unable to quickly identify the source of the contaminated produce and the result was a recall of all romaine nationwide. It turns out the problem came from one farm in California with E. Coli contamination, bur farmers everywhere paid a steep price as all romaine was yanked from store shelves and restaurants, also resulting in cancellations of upcoming orders.

Parts of the food industry have already implemented the needed solution. You might have noticed that the meat industry is usually able to identify the source of problems relatively quickly and can ususally track problems back to an individual rancher or packing house. Cattle farmer are probably the most advanced at tracking the history of herd animals, but all meat producers track products to some extent.

The ideal solution to the romaine lettuce problem is to document every step of the farming process and to make that information available to retailers and eventually to consumers. In the case of romaine that might mean tracking and recording the basic facts of each crop at each farm. That would mean recording the strain of seeds used. It would mean logging the kinds of fertilizer and insecticide applied to a given field. It would mean recording the date when the romaine was picked. The packing and shipping process would then be tracked so that everything from the tracking number on the box or crate, and the dates and identity of every immediate shipper between farm to grocery store would be recorded.

Inititally this would be used to avoid the large blanket recalls like happened with romaine. Ultimately, this kind of information could be made available to consumers. We could wave our smartphone at produce and find out where it was grown, when it was picked and how long it’s been sitting in the store. There are a whole lot of steps that have to happen before the industry can reach that ultimate goal.

The process needs to start with rural broadband. The farmer needs to be able to log the needed information in the field. The day may come when robots can automatically log everything about the growing process, and that will require even more intensive and powerful broadband. The farmer today needs an easy data entry system that allows data to be scanned into the cloud as they work during the growing, harvesting, and packing process.

There also needs to be some sort of federal standards so that every farmer is collecting the same data, and in a format that can be used by every grocery store and restaurant. There is certainly a big opportunity for any company that can develop the scanners and the software involved in such a system.

In many places this can probably be handled with robust cellular data service that extends into the fields. However, there is a lot of rural America that doesn’t have decent, or even any cell service out in the fields. Any farm tracking data is also going to need adequate broadband to upload data into the cloud. Farms with good broadband are going to have a big advantage over those without. We already know this is true today for cattle and dairy farming where detailed records are kept on each animal. I’ve talked to farmers who have to drive every day to find a place to upload their data into the cloud.

In the many counties where I work today the farmers are among those leading the charge for better broadband. If selling produce or animals requires broadband we are going to see farmers move from impatience to insistence when lack of connectivity means loss of profits.

I know as a consumer that I would feel better knowing more about the produce I buy. I’d love to buy more produce that was grown locally or regionally, but it’s often nearly impossible to identify in the store. I’d feel a lot safer knowing that the batch of food I’m buying has been tracked and certified as safe. Just in the last year there’s been recalls on things like romaine, avocados, spring onions, and packaged greens mixes. I don’t understand why any politician that serves a farming district is not screaming loudly for a national solution for rural broadband.

Access to Low-Price Broadband

The consumer advocate BroadbandNow recently made an analysis of broadband prices across the US and came up with several conclusions:

  • Broadband prices are higher in rural America.
  • They conclude that 45% of households don’t have access to a ‘low-priced plan’ for a wired Internet connection.

They based their research by looking at the published prices of over 2,000 ISPs. As somebody who does that same kind of research in individual markets, I can say that there is often a big difference between published rates and actual rates. Smaller ISPs tend to charge the prices they advertise, so the prices that BroadbandNow found in rural America are likely the prices most customers really pay.

However, the big ISPs in urban areas routinely negotiate rates with customers and a significant percentage of urban broadband customers pay something less than the advertised rates. But the reality is messier even than that since a majority of customers still participate in a bundle of services. It’s usually almost impossible to know the price of any one service inside a bundle and the ISP only reveals the actual rate when a customer tries to break the bundle to drop one of the bundled services. For example, a customer may think they are paying $50 for broadband in a bundle but find out their real rate is $70 if they try to drop cable TV. These issues make it hard to make any sense out of urban broadband rates.

I can affirm that rural broadband rates are generally higher. A lot of rural areas are served by smaller telcos and these companies realize that they need to charge higher rates in order to survive. As the federal subsidies to rural telcos have been reduced over the years these smaller companies have had to charge realistic rates that match their higher costs of doing business in rural America.

I think rural customers understand this. It’s a lot more expensive for an ISP to provide broadband in a place where there are only a few customers per road-mile of network than in urban areas where there might be hundreds of customers per mile. A lot of other commodities cost more in rural America for this same reason.

What this report is not highlighting is that the lower-price broadband in urban areas is DSL. The big telcos have purposefully priced DSL below the cost of cable modem broadband as their best strategy to keep customers. When you find an urban customer that’s paying $40 or $50 for broadband it’s almost always going to be somebody using DSL.

This raises the question of how much longer urban customers will continue to have the DSL option. We’ve already seen Verizon abandon copper-based products in hundreds of urban exchanges in the last few years. Customers in those exchanges can theoretically now buy FiOS on fiber – and pay more for the fiber broadband. This means for large swaths of the northeast urban centers that the DSL option will soon be gone forever. There are persistent industry rumors that CenturyLink would like to get out of the copper business, although I’ve heard no ideas of how they might do it. It’s also just a matter of time before AT&T starts walking away from copper. Will there even be any urban copper a decade from now? Realistically, as DSL disappears with the removal of copper the lowest prices in the market will disappear as well.

There is another trend that impacts the idea of affordable broadband. We know that the big cable companies now understand that their primary way to keep their bottom line growing is to raise broadband rates. We’ve already seen big broadband rate increases in the last year, such as the $5 rate increase from Charter for bundled broadband.

The expectation on Wall Street is that the cable companies will regularly increase broadband rates going into the future. One analyst a year ago advised Comcast that basic broadband ought to cost $90. The cable companies are raising broadband rates in other quieter ways. Several big cable companies have told their boards that they are going to cut back on offering sales incentives for new customers and they want to slow down on negotiating rates with existing customers. It would be a huge rate increase for most customers if they are forced to pay the ‘list’ prices for broadband.

We also see carriers like Comcast starting to collect some significant revenues for customers going over the month data caps. As household broadband volumes continue to grow the percentage of people using their monthly cap should grow rapidly. We’ve also seen ISPs jack up the cost of WiFi or other modems as a backdoor way to get more broadband revenue.

As the cable companies find way to extract more revenue out of broadband customers and as the big telcos migrate out of DSL my bet is that by a decade from now there will be very few customers with ‘affordable’ broadband. Every trend is moving in the opposite direction.

5G and Home IoT

I’ve been asked a lot recently about the potential future of 5G – everybody in the industry wants to understand the potential threat from 5G. One of the biggest proposed uses for 5G is to connect IoT devices to the cloud. Today I’m going to look at what that might mean.

It’s clear that 5G cellular will be the choice for connecting to outdoor IoT sensors. Sensors for farm equipment in rural areas or for outdoor weather and traffic sensors in urban areas are going to most easily handled by 5G cellular since the technology will eventually be everywhere. 5G is particularly suited for serving IoT devices due to frequency slicing where just the right amount of bandwidth, large or small, can be allocated to each small outdoor sensor. 5G has another interesting feature that will allow it to poll sensors on a pre-set schedule rather than have the sensor constantly trying to constantly connect – which will reduce power consumption at the sensor.

It’s clear that the cellular carriers also have their eye on indoor IoT devices. It’s harder to say that 5G will win this battle because today almost all indoor devices are connected using WiFi.

There are a couple of different 5G applications that might work in the indoor environment. The cellular carriers are going to make a pitch to be the technology of choice to connect small inside devices. In my home I can get a good cellular signal everywhere except in the old underground basement. There is no question that cellular signal from outside the home could be used to connect to many of the smaller bandwidth applications within the home. I can’t see any technical reason that devices like my Amazon Echo or smart appliances couldn’t connect to 5G instead of WiFi.

But 5G cellular has a number of hurdles issues to overcome to break into this market. I’m always going to have a wired broadband connection to my home, and as long as that connection comes from somebody other than one of the big cellular carriers I’m not going to want to use 5G if that means paying for another monthly subscription to a cellular provider. I’d much rather have my inside devices connected to the current broadband connection. I also want all of my devices on the same network for easy management. I want to use one hub to control smart light switches or other devices and want everything on the same wireless network. That means I don’t want some devices on WiFi and others on cellular.

One of the sales pitches for 5G is that it will be able to easily accommodate large numbers of IoT connections. Looking into the future there might come a time when there are a hundred or more smart devices in the house. It’s not that hard to picture the Jetson’s house where window shades change automatically to collect or block sunlight, where music plays automatically when I enter a room, where my coffee is automatically ready for me when I get out of bed in the morning. These things can be done today with a lot of effort, but with enough smart devices in a home these functions will probably eventually become mainstream.

One of the limitations of WiFi today is that it degrades in a busy environment. A WiFi network pauses each time it gets a new request for a connection, which is the primary reason it’s so hard to keep a good connection in a busy hotel or convention center.

However, the next generation with WiFi 6 is already anticipating these needs in the home. WiFi can adopt the same frequency slicing used by 5G so that only a small portion of a channel can be used to connect to a given device. Events can be scheduled on WiFi so that the network only polls certain sensors only periodically. The WiFi network might only interact with the smart coffee pot or the smart window shades when something needs to be done, rather than maintaining a constantly open channel. It’s likely that the next iterations of WiFi will become nearly as good as 5G for these functions within a closed home environment.

There is an even better solution that is also being discussed. There’s no reason that indoor routers can’t be built that use both WiFi and 5G frequencies. While the cellular companies are gobbling up millimeter wave spectrum, as long as there is an unlicensed slice of spectrum set aside for public use it will be possible to deploy both WiFi on mid-range frequencies and 5G on millimeter wave frequencies at the same time. This would blend the benefits of both technologies. It might mean using WiFi to control the smart coffee pot and indoor 5G to connect to the smart TV.

Unfortunately for the cellular carriers, these duel-function routers won’t need them. The same companies that make WiFi routers today can make combination 5G / WiFi routers that work with the full range of unlicensed spectrum – meaning no revenue opportunity for the cellular carriers. When I look at all of the issues I have a hard time seeing 5G cellular becoming a preferred technology within the home.

 

Disney Jumps into the OTT Market

Disney is jumping into the OTT fray joining Netflix, Amazon Prime and others that offer a unique library of content for online viewing. The online product will be marketed as Disney+ and will launch on November 12 in the US, later worldwide. Disney seems to be taking the same low-price philosophy as other online start-ups with initial pricing at $6.99 per month, or an annual subscription for $69.99 for the first year.

Disney is counting on a unique customer base of what it calls ‘true fans’ that adore everything Disney. I can attest they exist and have a wife and daughter in that category. Disney thinks these fans will gain them a lot more subscribers than other competing services.

The company is already sitting on one of the largest libraries of valuable content. Disney has been making huge revenues over the years rolling out old Disney classics periodically and then withdrawing them from the market. I’ve seen speculation that Disney plan to offer their full catalog of Disney classics as part of the offering, but we won’t know for sure until the service is available. Disney has a lot of other popular content as well such as the Star Wars and Marvel comics franchises.

Analysts say the $6.99 price is too low and Disney seems to acknowledge it. I read where an analyst at BTIG Research said that Disney didn’t expect for the service to be profitable until 2024 until the service has over 60 million customers. It’s hard to fathom needing that many customers to break even. But Disney is not quite the same as other programmers. Perhaps they are willing to take a loss on the video library in order to drive revenues in other ways. There has to be a big upside to have over 60 million fans watching your content and advertising and buying Disney merchandise.

The Disney launch enters an already crowded market and in doing so makes it that much harder to justify cord cutting. The OTT services that mimic cable TV like DirecTV Now, Hulu, Sling TV, Playstation Vue, FuboTV, and others have increased prices to rival a subscription to an expanded basic line-up from a cable company. There are then dozens of add-on options of other programming like Netflix, CBS All-Access, HBO Now, and the upcoming Apple TV that lure viewers with unique content. It’s starting to be clear that cord cutting is not cheaper unless a viewer has the discipline to restrict content to only one or two services.

Something else is starting to become clear in the industry, which is that customers who buy traditional cable TV are also subscribing to OTT services like Netflix. At the end of last year PwC reported that the number of Netflix subscribers in the US had surpassed the number of traditional cable subscribers.

The PwC study intended to understand the viewers of OTT content. They wanted to see how viewers handle the huge array of programming options. One of their most interesting findings is that age is becoming less of a factor in understanding OTT usage. When PwC started watching the market four years ago it was easy to identify differently buying and viewing habits between younger and older viewers, but those differences seem to be converging.

For example, PwC found that 28% of older consumers had cut the cord, while in earlier years it was a much smaller percentage. They found that 61% of older viewers now watch content on the Internet, up from less than 50% just a year earlier. They found that there was a higher percentage of customers who claimed they are loyal to traditional cable TV from younger viewers ages 25-34 (22%) than with those older than 50 (16%).

One of the most interesting finding in the PwC study was the extent to which people don’t like for video services to suggest viewing. Only 21% of viewers feel that the suggested viewing on sites like Netflix is better than what they can do themselves. The biggest complaint about all OTT services is the ease of finding content and on 12% say they can find the content they want to watch easily.

Starry Resurfaces

I’ve written a few times over the years about Starry, a wireless ISP that is originally launching in Boston. The company was founded by Chet Kanojia who readers might remember as the founder of Aereo – the company that tried to deliver affordable local programming through a wireless connection.

Starry’s product set is simple – $50 per month for 200 Mbps broadband. There’s a $50 install fee and then $50 per month with no add-ons or extra charges. This easily beats the regular broadband prices for Charter and Verizon FiOS, both at $70+ for the same speed when considering the charge for the modem.

Starry has changed its business plan. They had first announced a launch in 2016 that was going to beam to a small antenna placed in a customer’s window. I’m imagining they ran into a number of issues with this, including technical issues, because that plan never went beyond the first round of beta testing and Starry went quiet.

The new technology will use millimeter wave spectrum to beam broadband to a receiver on the top of apartment buildings and will then use existing wiring to connect to customers. This involves point-to-point radios. Starry launched a few years ago using licensed millimeter wave spectrum at 38.2 and 38.6 GHz. The company says they are going to be using spectrum between 37 GHz and 40 GHz, so they must be planning to engage in the upcoming auctions for 37 GHz and 39 GHz spectrum.

At the spectrum they are using they could easily be beaming between 1 – 2 gigabytes of data to a given apartment building today. That will increase if they get access to more bands of spectrum.  That’s plenty of bandwidth to provide a 200 Mbps product to every tenant. The company is advertising that they are using pre-5G technology. That’s an interesting phrase because they are likely delivering Ethernet over the wireless connection to each building. Perhaps if they buy more spectrum they will then claim to be using 5G. This is an interesting concept for point-to-point radios because the 5G standard doesn’t do anything to increase the speed on a connection. However, they might get some advantages from 5G which will make it easier to link multiple frequencies on the same point-to-point path.

The current business plan is to use the existing wiring in a building. That is interesting because they are bringing broadband to the roof, and the wiring from apartment buildings today always originates on the first floor or basement in a communications space. I have to think that Starry is dropping a fiber from the roof to the communications room in order to get access to wiring.

The only wiring that is almost always available in a home-run configuration to each apartment is the telco copper, and I guess this is the wiring they are using. With today’s G.Fast technology it’s easy in most cases to achieve speeds of at least 400 Mbps and sometimes faster. I’ve heard that G.Fast is achieving near gigabit speeds in labs, so it’s likely over time that Starry will be able to step up the speeds. Coaxial cables are a different matter and there are numerous different wiring schemes around and also a wide variety of situations where the cable incumbent can lay claim to those cables.

Starry is creating yet another competitor for anybody building broadband in an urban environment. I have a hard time seeing this technology making any sense in a small town or rural environment. In cities the technology probably only makes sense for somewhat sizable apartment buildings, or perhaps multi-tenant business buildings. It’s an intriguing technology for landlords because they can offer tenants another option other than the incumbent cable or telephone company.

It’s been interesting over the years to watch the evolution of broadband in apartment buildings. For many years there were hurdles for a competitor to deliver big bandwidth inside apartment buildings. The cost of rewiring older apartment buildings was often prohibitive. But today there are lower-cost techniques for stringing fiber inside older buildings as well as creative uses of existing wiring such as using G.Fast. Where apartment buildings were often left out of fiber business plans they are now a big focus for competitors.

The bottom line is that anybody planning on competing for downtown apartment buildings will have another potential competitor. Starry plans on being in most major metropolitan markets and there are likely going to be copycat ISPs that do this elsewhere. Urban apartment buildings have gone from being underserved to perhaps having some of the best broadband in any market.

Millimeter Wave Cellular Service

Verizon is claiming to have the first real-world deployment of fast 5G cellular service. They launched an early version of what they are calling 5G in downtown Chicago and Minneapolis. This launch involves the deployment of millimeter wave spectrum.

A review of the cellular performance in FierceWireless showed exactly what was to be expected. This new service will only be available from a few cell sites in each city. For now the service can only be received using a Motorola Z3 handset that has been modified with a 5G Moto Mod adapter.

As would be expected, the millimeter wave broadband was fast, with peak speed measured at 500 Mbps. But also as expected, the coverage area is small, and millimeter wave spectrum is easily blocked by almost any impediment. Walking inside a building or around the corner of a building killed the broadband signal. The signal speed cut in half when received through a window. When not in the range of the millimeter wave signal the phone reverts to 4G, because Verizon is not yet close to implementing any actual 5G standards. This was not a trial of 5G technology – it’s a trial that shows that millimeter wave spectrum can carry a lot of data. That is especially easy to demonstrate when there are only one or two users on a given cell site.

Verizon announced a fee of $10 per month for the faster data speed, but almost immediately said the fee will be waived. This launch is another marketing gimmick letting Verizon get headlines proclaiming 500 Mbps cellular data speeds. The reviewer noted that the Verizon store in downtown Chicago was not ready to provide the product to anybody.

There are big issues with using millimeter wave spectrum for cellular service. I first ask what a cellphone user can do with that kind of speed. A cellphone can already be used to stream a video on a decent 4G connection. Other than software updates there isn’t any real need to download big files on a cellphone. It’s unlikely that the cellular carriers are going to let you tether speeds of that magnitude to a computer.

The other big issues will be the real-life limitations of millimeter wave spectrum outdoors. Since the frequency won’t pass through walls, this is strictly going to be an outdoor walking technology. As the FierceWireless review showed, it’s extremely easy to walk out of coverage. A cellular carrier will need to provide multiple cell sites in very close proximity in order to cover a given area.

It’s hard to think that there will ever be many subscribers willing to pay $10 more per month for a product with these limitations. How many people care about getting faster data speed outside, and only in areas of a city that are close to 5G transmitters? Would many cellular customers pay more so that they could save a few minutes per month to download software updates?

It’s hard to envision that the incremental revenues from customers will ever justify the cost of deploying multiple cell sites within close proximity of each other. T-Mobile already announced that they don’t plan to charge extra for 5G data when it’s available – there is no incentive to offer the product if there is no additional revenue.

What I found interesting is that Verizon also announced that they will be launching this same product in 20 additional urban markets soon, with 30 markets by the end of the year. The company will be using this launch to promote the new Galaxy S10 5G phone that will be able to utilize the millimeter wave spectrum. Verizon is touting the new service by saying that it will provide access to faster streaming, augmented-reality, gaming, and consumer and business applications.

If anything, this launch is a gimmick to sell more of the expensive 5G handsets. I wonder how many people will buy this phone hoping for faster service, only to realize that they have to stand outside close to a downtown millimeter wave cell site to use it. How many people want to go outside to enjoy faster gaming or augmented reality?

This is not to say that millimeter wave spectrum doesn’t have value, but that value will manifest when Verizon or somebody offers an indoor 5G modem that’s connected to a landline broadband connection. That would enable a cellphone to connect to faster gaming or augmented reality. That has some definite possibilities, but that is not cellular service, but rather an indoor broadband connection using a cellphone as the receiver.

I’m really starting to hate these gimmicks. Verizon and AT&T are both painting a false picture of 5G by making everybody think it will provide gigabit speeds everywhere – something that is not even listed as a goal of the 5G specifications. These gimmicks are pure marketing hype. The companies want to demonstrate that they are cutting edge. The gimmicks are aimed even more for politicians who the carriers are courting to support deregulation of broadband in the name of 5G. In the cease of this particular gimmick, Verizon might sell more Samsung 5G phones. But the gimmicks are just gimmicks and this trial is not a real product.

5G Claims for Rural America

There are a few hot-button topics that are the current favorite talking points at the FCC. T-Mobile and Sprint are pressing both the 5G and the rural broadband buttons with their merger request. The companies are claiming that if they are allowed to merge that they can cover 96% of America with a ‘deep, broad, and nationwide’ 5G network.

There are multiple technologies being referred to as 5G – wireless broadband loops and 5G cellular – and their claim doesn’t hold water for either application. In making the claim the companies want regulators to think that they are talking about wireless 5G loop like the technology that Verizon recently test-drove in Sacramento. That technology is delivering 300 Mbps broadband to those living close to the transmitters located on poles. The carriers are smart and know this is the kind of claim that will perk up the ears of regulators and politicians. A ubiquitous 300 Mbps rural broadband product would solve the rural digital divide.

T-Mobile and Sprint are not talking about 5G wireless loops. That technology requires two things to have any chance of success – sufficient neighborhood housing density and fiber backhaul. Rural areas with poor broadband generally lack fiber infrastructure built close to neighborhoods, so a 5G provider would have to build the needed fiber. I can’t imagine why anybody that builds fiber close to a neighborhood would then choose a squirrely wireless link that delivers less than a gigabit of speed instead of a direct fiber connection that can deliver 10 Gbps using today’s readily-available technology.

The other missing element in rural America is customer density. I read an article that says that each Verizon 5G wireless loop transmitter in Sacramento can see at least 20 potential customers. There are a number of industry analysts who think that even that is a hard business case to justify, so how can wireless loops ever work in rural American where a given transmitter will likely see only a few homes? I can foresee the 5G loop technology perhaps being used to deliver broadband to small rural subdivisions or small towns where the wireless link might be cheaper than stringing fiber. However, most of rural America is characterized by low density and homes that are far apart.

What T-Mobile and Sprint are really talking about is 5G rural cellular service. Sprint brings a unique asset to the merger – they are the only US cellular carrier using nationwide spectrum in the 850 MHz and the 2.5 GHz bands. T-Mobile is the only carrier currently using 600 MHz spectrum. The combined companies would have by far the biggest inventory of spectrum – giving them a big advantage in urban America.

But is there an advantage this spectrum can bring to rural broadband? The short answer is no. I say that because I don’t see 5G cellular being that important in rural America? There are several reasons why the T-Mobile and Sprint announcement makes little sense.

The biggest issue is that there is not going to be fully-functional 5G cell sites anywhere in the country for years. It’s likely to take most of the coming decade until we see cell sites that comply with all 13 of the major improvement goals listed in the 5G specifications. There will be a natural progression from 4G to 5G as the carriers implement upgrades over time – the same upgrade path we just saw with 4G, where the first fully-compliant 4G cell sites were finally implemented in late 2017.

The bigger question is if most rural cell sites need 5G. The new technology brings several major improvements to cellular. First will be the ability of one cell site to make up to 100,000 simultaneous connections to devices, up from several thousand connections today. This improvement will be mostly accomplished using frequency slicing. This allows a cell site to tailor the size of the broadband connection to each customer’s demand. For example, a connection to an IoT device might be set at a tiny fraction of a full cellular channel, thus freeing up the rest of that channel to serve other customers. Many rural cell sites won’t need this extra capacity. A rural cell site that serves a few hundred people at a time will continue to function well with 4G and won’t need the extra capacity.

5G also can be used to increase the speed of cellular broadband, with the goal in the standard to bring speeds to as fast as 100 Mbps. That is also unlikely to happen to any great degree in rural America. Speeds of 100 Mbps will be accomplished in urban areas by having multiple cell sites connect to a single cellphone. That will require densely packed small cell sites, which is something we are already starting to see in the busy parts of downtowns. It’s incredibly unlikely that the cellular companies are going to introduce small cell sites through rural America just to boost handset broadband speeds. Speeds are not likely to be much faster than 4G when a customer can see only a single tower.

The T-Mobile and Sprint claim is pure bosh. These companies are not going to be investing in fiber to bring 5G wireless loops to rural America. While a combined company will have more spectrum than the other carriers there is no immediate advantage for using 5G for rural cellular coverage . The T-Mobile and Sprint announcements are just pushing the 5G and the rural broadband hot-buttons because the topics resonate well with politicians who don’t understand the technology.