A 5G Timeline

Network World recently published their best guess at a timeline for 5G cellular deployment. As happens with all new technologies that make a big public splash, the actual deployment is likely to take a lot longer than what the public expects.

They show the timeline as follows:

  • 2017 – Definition, specification, requirements, technology development and technology field tests
  • 2019/20 – Formal specifications
  • 2021 – Initial production service rollouts
  • 2025 – Critical mass
  • 2030+ – Phase-out of 4G infrastructure begins

There is nothing surprising about this timeline, and in the cellular world we saw something similar with the roll-out of both 3G and 4G and there is no reason to think that 5G will be introduced any faster. There are an incredible number of things that must come to bear before 5G can be widely available.

Just to be clear, this timeline is talking about the use of the 5G standard for cellular service, as opposed to the same 5G terminology that is being used to describe high-speed radio connections used to deliver broadband over short distances. The use of the term 5G is going to be confusing the public for years, until some point where we will need a different name for the two different technologies.

Like with any new technology, it will probably be fifteen years until there is equipment that incorporates the full 5G specification. We are just now finally seeing a full implementation of fully-compliant 4G electronics. This means that early 5G roll-outs will only implement a few of the new features of 5G. Just like with 4G we can then expect successive future 5G roll-outs as new features are introduced and the technology inches forward. We won’t go straight to 5G, but will work our way through 4.1G and 4.2G until we finally get to the full 5G specification.

Here are just a few of the things that have to happen before 5G cellular is widely deployed.

  • Standards have to be completed. Some of the first generation standards will be completed by the end of this year, but that’s not the end of the standards process. There will be continued standards developed over the next few years that look at the practical issues of deploying the technology.
  • Then equipment must be developed that meets the new standards. While many wireless companies are already working on this, it takes a while to go from lab prototype to mass production.
  • True field trials are then needed. In the wireless world we have always seen that there is a big difference between the capabilities that can be tested in a lab versus the real performance that can be had in differing outdoor environments. Real field trials can’t proceed until there are finished deployments that are not prototypes that are then tested in many different environments.
  • Then the cellular companies have to start deploying the equipment into the field. That means not only upgrading the many existing cell towers, but it’s going to mean deploying into smaller neighborhood cell sites. As I’ve written about recently, this means building a lot of new fiber and it means solving the problems of deploying small cell sites in neighborhoods. If we’ve learned anything from the recent attempt by the cell companies to deploy small 4G cell sites it’s that these two issues are going to be a major impediment to 5G deployment. Just paying for all of the needed fiber is a huge hurdle.
  • One of the biggest challenges with a new cellular technology is introducing it into handsets. Handset makers will like the cachet of selling 5G, but the biggest issue with cellphones is battery power and it’s going to be costly and inefficient to deploy the more complicated 5G big-MIMO antennae in handsets. That’s going to make the first generation of 5G handsets expensive. This is always the catch-22 of a new cellular technology – cellphone makers don’t want to commit to making big volumes of more-expensive phones until customer can actually use the new technology, and the cellphone makers won’t deploy too much of the 5G technology until there are enough handsets in the world to use it. I’ve seen some speculation that this impasse could put a real hitch in 5G cellular deployment.

To a large degree the cellular industry it its own worst enemy. They have talked about 5G as the savior of all of our bandwidth problems, when we know that’s not true. Let’s not forget that when 4G was introduced fifteen years ago that the industry touted ubiquitous 100 Mbps cellphone connections – something that is still far above our capabilities today. One thing not shown on the timeline is the time when we finally get actual 5G capabilities on our cellphones. It’s likely to be 15 years from now, at about the time when we have shifted our attention to 6G.

Local, State or Federal Regulation?

Last week the FCC clarified its intentions for the Broadband Deployment Advisory Committee (BDAC). This group was tasked with exploring a wide range of topics with the goal of finding ways to lower barriers for broadband deployment.

The BDAC was divided into subgroups with each examining issues such as speeding up access to poles and conduits, or how to streamline the morass of local regulations of such things as rights-of-ways that can slow down fiber deployment.

There has been a huge amount of buzz in the industry since the expectation has been that the FCC would act to impose federal rules that ‘fix’ some of the most important impediments to competition. That expectation was bolstered on several occasions by speeches made by new FCC Chairman Ajit Pai that hinted that the FCC was willing to take steps to lower barriers to broadband deployment.

But FCC Senior Counsel Nicholas Degani just clarified that the FCC’s intentions are not to create new regulations, but rather to create ‘model codes’ that they hope that cities and states around the country will use to make it easier to deploy broadband.

We’ll have to wait a while to see if the FCC really can refrain from issuing new regulations. Chairman Pai has said many times that he is in favor of ‘light touch’ regulation and the agency is in the process of relaxing or undoing many of the regulations from the past. But one thing that I have repeatedly seen from regulators over the years is that they love to regulate. It will take major restraint for the FCC to not try to ‘fix’ the many problems that the BDAC is highlighting. This will be the ultimate test to see if they really are anti-regulation.

Frankly, some of the issues that the BDAC has been exploring cry out for some sort of regulatory relief. For example, in some parts of the country it takes so long and is so expensive to get onto poles that it’s nearly impossible to implement a business plan that needs pole access. And it is extremely frustrating for a national company that deploys fiber everywhere to work with local rules that vary widely from city to city.

Part of what is pushing this effort is the fact that everybody expects a massive investment in new fiber over the next decade as fiber is built to bring bandwidth to homes and as we deploy 5G networks. Everybody recognizes that there are impediments that add delay costs to those deployments.

At the same time that the FCC has been looking at the issues there are numerous state attempts to create state regulatory rules to fix some of these problems. A number of states have already created regulations that are aimed at making it easier to do things like get access to poles. But state efforts vary widely in the motivation for new regulations. There are some states that are looking hard at imposing statewide rules that balance the needs of competitors, network owners and municipalities.

But there are other attempts prompted by the big cellular companies and ISPs to run roughshod over the rights of pole owners and municipalities. These efforts are being driven, in part, by model legislation developed by ALEC and funded by the big companies. Many of these rules are attempting to set low nationwide rates for pole attachments and also to force streamlined timelines that ignore local conditions.

Finally, there are efforts being made by many cities to make it easier to deploy broadband. Most cities understand that they need fiber everywhere to remain competitive with other cities. Yet these efforts are often ineffective because cities, by definition, have a lot of stakeholders to satisfy. When a City looks at changing local rules they end up have to give a lot of weight to issues such as the environment, aesthetics, historic preservation, safety, unions and others that make it impossible to create rules that favor fiber deployment over these other concerns.

Fixing these issues is a problem that may never find the right solution. We live in a country where cities across the board have been granted varying degrees of controlling things like rights-of-way that affect network deployments. Fiber deployment is not the first issue that has come along that has pitted federal, state and local regulators against each other when trying to solve the same problems. It’s not unlikely that if either the FCC or the states try to strongarm cities that we will see a pile of lawsuits challenging any egregious decisions. And that just leads to delays since disputed laws don’t go into effect. I hope we can find solutions that don’t lead to those lawsuits, because the worst kind of regulation is one that is in limbo in some court for years. Nobody is likely to make any significant new investment in that environment.

The Cost of Building 5G

It seems like I can barely browse industry articles these days without seeing another prediction of the cost of providing fast broadband everywhere in the US. The latest study, just released on July 12 from Deloitte, estimates that it will require at least $130 billion over the next seven years in fiber investment to make the country fully ready for 5G.

Before digesting that number it’s important first to understand what they are talking about. Their study looks at deploying a ‘deep fiber’ network that would bring fiber close to homes and businesses in the country and then use wireless technology to complete the connection to homes. This is not a new concept and for decades we have referred to this as fiber-to-the-curb. This network design never went very far in the past because there wasn’t a good wireless technology around to make that final connection. This differs from an all-fiber connection by replacing a fiber drop wire to the home with wireless electronics. The only way such a network makes sense is if that difference is a significant savings over an all-fiber connection at the home.

We are now on the verge of having the needed wireless technology. There are now some first-generation wireless connections being tested that could finally make this a viable network deployment. And like with everything new, within a decade the wireless electronics needed will improve in function and cost a lot less.

To put the Deloitte estimate into perspective Verizon claimed to have spent $13 billion on their original FiOS fiber network. Because they were able to overlash fiber onto their own telephone wires the FiOS network cost was built at a relatively low cost of $750 per customer passed. But the Verizon FiOS network never blanketed any city and instead they selectively cherry-picked neighborhoods where the construction costs were the lowest. Verizon had originally told Wall Street they were going to spend $24 billion on fiber, but they abandoned a lot of the planned construction when the costs came in higher than they had expected.

But back to the Deloitte number of $130 billion. That is the cost of just the fiber needed to get deep into every neighborhood in the country. It doesn’t include the electronics needed to broadcast the wireless signal or the electronics needed inside homes and businesses to receive the signal. Nobody yet has any estimate of what that is going to cost, but it won’t be cheap, at least not for a few years. The cost of getting onto utility poles, street lighting poles or of constructing urban towers is not going to be cheap. And the cost of the electronics won’t be cheap until it’s gone through a few generations of refinement. Using Deloitte’s same methodology of estimating and assuming a very conservatively low cost of $500 for electronics per customer, this would add another $30 billion if only half the customers in the country use the new 5G network.

The big question that must be asked when tossing out a number like $130 billion is if there is anybody who is interested in deploying wireless loops in this manner? Such a network would be used to directly compete against the big cable companies. What Deloitte is talking about is not faster cellular service, but fast connections into homes and businesses. Are there any companies willing to spend that much money to go head-to-head with cable networks that will soon be able to deliver gigabit speeds?

The obvious candidates are Verizon and AT&T. Verizon has been talking a lot lately about this potential business plan, and so perhaps they might pursue it. AT&T, while bragging about the amount of money they are spending on fiber, has not shown a huge inclination to dive back into the residential broadband market. And there are not a lot of companies with capital budgets big enough to consider this.

Consider the capital budgets of the five largest telcos. AT&T is on track to spend $22B in 2017, but a lot of that is being spent in Mexico. Verizon’s 2017 capex budget is around $17B. CenturyLink spends something a little less than $3B. Frontier spends around $1B and Windstream spends about $0.8B.

It’s clear that unless AT&T and Verizon are willing to redirect the majority of their capital spending to this new technology that it’s not going to go anywhere. I think it’s clear that both AT&T and Verizon are going to be looking hard at the technologies and doing trials. But even should those trials be successful I can’t see them pouring the needed billions in to build ‘deep fiber’ everywhere. It’s far more likely that the technology will be deployed in the same way that Verizon deployed FiOS – built only where the cost is the lowest and ignoring everybody else.

Both of these companies understand that it’s not going to be easy to wrestle customers back from the big cable companies. Just building these fiber networks is a daunting financial investment – one that Wall Street would likely punish them for undertaking. But even building the needed networks is not going to be any assurance of market success unless they can convince customers they are a better bargain. I just don’t see these companies going hog wild in making the needed investments to deploy this widely, but instead see this as the newest technology for cherry-picking the best opportunities.

The Future of AT&T and Verizon

The cellphone companies have done such a great job of getting everybody to purchase a smartphone that cellular service in the country is quickly turning into a commodity. And, as is typical with most commodity products, that means less brand loyalty from customers and lower market prices for the products.

We’ve recently seen the cellular market demonstrate the turn toward becoming a commodity. In the first quarter of this year the cellular companies had their worse performance since back when they began. Both AT&T and Verizon posted losses for post-paid customers for the quarter. T-Mobile added fewer customers than expected and Sprint continued to lose money.

This is a huge turnaround for an industry where the big two cellular companies were each making over $1 billion per month in profits. The change in the industry comes from two things. First, people are now shopping for lower prices and are ready to change carriers to get lower monthly bills. The trend for lower prices was started by T-Mobile to gain market share, but low prices are also being pushed by cellular resellers – being fed by the big carriers. The cellular industry is only going to get more competitive when the cable companies soon enter the market. That will provide enough big players to make cellular minutes a true commodity. The cable companies have said they will be offering low prices as part of packages aimed at making customers stickier and will put real price pressure on the other cellular providers.

But the downturn in the first quarter was almost entirely due to the rush by all of the carriers to sell ‘unlimited’ data plans – which, as I’ve noted in some earlier blogs, are really not unlimited. But these plans offer lower prices for data and are freeing consumers to be able to use their smartphones without the fear of big overage fees. Again, this move was started by T-Mobile, but it was also driven heavily by public demand. AT&T and Verizon recognized that if they didn’t offer this product set that they were going to start bleeding customers to T-Mobile.

It will be really interesting to watch what happens to AT&T and Verizon, who are now predominantly cellular companies that also happen to own networks. The vast majority of revenues for these companies comes from the cellular parts of their companies. When I looked at both of their annual reports last year I had a hard time finding evidence that these companies were even in the landline network business. Discussions of those business lines are buried deeply within the annual reports.

These companies obviously need to find new forms of revenues to stay strong. AT&T is tackling this for now by going in a big way after the Mexican market. But one only has to look down the road a few years to see that Mexico and any other cellular market will also trend towards commoditization.

Both companies have their eyes on the same potential growth plays:

  • Both are making the moves necessary to tackle the advertising business. They look at the huge revenues being made by Facebook and Google and realize that as ISPs they are sitting on customer data that could make them major players in the targeted marketing space. Ad revenues are the predominant revenue source at Google and if these companies can grab even a small slice of that business they will make a lot of money.
  • Both are also chasing content. AT&T’s bid for the purchase of Time Warner is still waiting for government approval. Verizon has made big moves with the purchases of AOL and Yahoo and is rumored to be looking at other opportunities.
  • Both companies have been telling stockholders that there are huge amounts of money to be made from the IoT. These companies want their cellular networks to be the default networks for collecting data from IoT devices. They certainly ought to win the business for things like smart cars, but there will be a real battle between cellular and WiFi/landline connections for most other IoT usage.
  • Both companies are making a lot of noise about 5G. They are mostly concentrating on high-speed wireless connections using millimeter wave spectrum that they hope will make them competitive with the cable companies in urban areas. But even that runs a risk because if we see true competition in urban areas then prices for urban broadband might also tumble. And that might start the process of making broadband into a commodity. On the cellular side it’s hard to think that 5G cellular won’t quickly become a commodity as well. Whoever introduces faster cellphone data speeds might get a bump upward for a few years, but the rest of the industry will certainly catch up to any technological innovations.

It’s hard to foresee any business line where AT&T and Verizon are going to get the same monopoly power that they held in the cellular space for the past few decades. Everything they might undertake is also going to be available to competitors, meaning they are unlikely to make the same kind of huge margins they have historically made with cellular. No doubt they are both going to be huge companies for many decades to come since they own the cellular networks and spectrum. But I don’t think we can expect them to be the cash cows they have been in the past.

5G Needs Fiber

I am finally starting to see an acknowledgement by the cellular industry that 5G implementation is going to require fiber – a lot of fiber. For the last year or so the industry press – prompted by misleading press releases from the wireless companies – made it sound like wireless was our future and that there would soon not be any need for building more wires.

As always, when there is talk about 5G there is a need to make sure which 5G we are talking about, because there are two distinct 5G technologies on the horizon. One is high-speed wireless loops send directly to homes and businesses as a replacement for a wired broadband connection. The other is 5G cellular providing bandwidth to our cellphones.

It’s interesting to see the term 5G being used for a wireless microwave connection to a home or business. For the past twenty years this same technology has been referred to as wireless local loop, but in the broadband world the term 5G has marketing cachet. Interestingly, a lot of these high-speed data connections won’t even be using the 5G standards and could just as easily be transmitting the signals using Ethernet or some other transmission protocol. But the marketing folks have declared that everything that uses the millimeter wave spectrum will be deemed 5G, and so it shall be.

These fixed broadband connections are going to require a lot of fiber close-by to customers. The current millimeter radios are capable of deliver speeds up to a gigabit on a point-to-point microwave basis. And this means that every 5G millimeter wave transmitter needs to be fiber fed if there is any desire to offer gigabit-like speeds at the customer end. You can’t use a 1-gigabit wireless backhaul to feed multiple gigabit transmitters, and thus fiber is the only way to get the desired speeds to the end locations.

The amount of fiber needed for this application is going to depend upon the specific way the network is being deployed. Right now the predominant early use for this technology is to use the millimeter wave radios to serve an entire apartment building. That means putting one receiver on the apartment roof and somehow distributing the signal through the building. This kind of configuration requires fiber only to those tall towers or rooftops used to beam a signal to nearby apartment buildings. Most urban areas already have the fiber to tall structures to support this kind of network.

But for the millimeter technology to bring gigabit speeds everywhere it is going to mean bringing fiber much closer to the customer. For example, the original Starry business plan in Boston had customers receiving the wireless signal through a window, and that means having numerous transmitters around a neighborhood so that a given apartment or business can see one of them. This kind of network configuration will require more fiber than the rooftop-only network.

But Google, AT&T and Verizon are all talking about using millimeter wave radios to bring broadband directly into homes. That kind of network is going to require even more fiber since a transmitter is going to need a clear shot near to street-level to see a given home. I look around my own downtown neighborhood and can see that one or two transmitters would only reach a fraction of homes and that it would take a pole-mounted transmitter in front of homes to do what these companies are promising. And those transmitters on poles are going to need to be fiber-fed if they want to deliver gigabit broadband.

Verizon seems to understand this and they have recently talked about needing a ‘fiber-rich’ environment to deploy 5G. The company has committed to building a lot of fiber to support this coming business plan.

But, as always, there is a flip side to this. These companies are only going to deploy these fast wireless loops in neighborhoods that already have fiber or in places where it makes economic sense to build it. And this is going to mean cherry-picking – the same as the big ISPs do today. They are not going to build the fiber in neighborhoods where they don’t foresee enough demand for the wireless broadband. They won’t build in neighborhoods where the fiber construction costs are too high. One only has to look at the hodgepodge Verizon FiOS fiber network to see what this is going to look like. There will be homes and businesses offered the new fast wireless loops while a block or two away there will be no use of the technology. Verizon has already created fiber haves and have-nots due to the way they built FiOS and 5G wireless loops are going to follow the same pattern.

I think the big ISPs have convinced politicians that they will be solving all future broadband problems with 5G, just as they made similar promises in the past with other broadband technologies. But let’s face it – money talks and these ISPs are only going to deploy 5G / fiber networks where they can make their desired returns.

And that means no 5G in poorer neighborhoods. It might mean little or limited 5G in neighborhoods with terrain or other similar issues. And it certainly means no 5G in rural America because the cost to build a 5G network is basically the same as building a landline fiber network – it’s not going to happen, at least not by the big ISPs.

The Proliferation of Small Wireless Devices

Cities nationwide are suddenly seeing requests to place small wireless devices in public rights-of-way. Most of the requests today are for placing mini-cell sites, but in the near future there are going to be a plethora of other outdoor wireless devices to support 5G broadband and wireless loops.

Many cities are struggling with how to handle these requests. I think that once they understand the potential magnitude of future requests it’s going to become even more of an issue. Following are some of the many issues involved with outdoor wireless electronics placement:

Franchising. One of the tools cities have always used to control and monitor placement of things in rights-of-way is through the use of franchise agreements that specifically spell out how any given company can use the right-of-way. But FCC rules have prohibited franchises for cellular carriers for decades – rules that were first put into place to promote the expansion of cellular networks. Those rules made some sense when cities only had to deal with large cellular towers that are largely located outside of rights-of-way, but make a lot less sense for devices that can be placed anywhere in a city.

Aesthetics. These new wireless devices are not going to be placed in the traditional locations like large cellular towers, water towers and rooftops of buildings. Instead the wireless providers will want to place them on existing telephone poles and light poles. Further, I’ve heard of requests for the placement of new, taller poles as tall as 100 feet that would be used just for the wireless network.

The devices that will be used are going to vary widely in size and requirements, making it difficult to come up with any one-size-fits-all new rules. The devices might vary in sizes ranging from a laptop computer up to a small dorm refrigerator. And some of the devices will be accompanied by support struts and other devices that together make for a fairly large new structure. The vast majority of these devices will need an external power feed (some might be solar powered) and many are also going to need a fiber feed.

It’s also expected that 5G devices are going to want relatively clear line-of-sight and this means a lot more tree-trimming, including trimming at greater heights than in the past. I can picture this creating big issues in residential neighborhoods.

Proliferation. I doubt that any city is prepared for the possible proliferation of wireless devices. Not only are there four major cellular companies, but these devices are going to be deployed by the cable companies that are now entering the cellular market along with a host of ISPs that want to deliver wireless broadband. There will also be significant demand for placement for connecting private networks as well as for the uses by the cities themselves. I remember towns fifty years ago that had unsightly masses of telephone wires. Over the next decade or two it’s likely that we will see wireless devices everywhere.

Safety. One of the concerns for any city and the existing utilities that use poles and rights-of-way is the safety of technicians that work on poles. Adding devices to poles always makes it more complicated to work on a pole. But adding live electric feeds to devices (something that is fairly rare on poles) and new fiber wires and the complexity increases again – particularly for technicians trying to make repairs in storm conditions.

Possible Preemption of City Rights. Even after considering all these issues, it’s possible that the choice might soon be moot for cities. At the federal level both the FCC and Congress are contemplating rules that make it easier for cellular companies to deploy these devices. There are also numerous bills currently in state legislatures that are looking at the same issues. In both cases most of the rules being contemplated would override local control and would institute the same rules everywhere. And as you might imagine, almost all of these laws are being pushed by the big cellular companies and largely favor them over cities.

It’s easy to understand why the cellular companies want universal rules. It would be costly for them to negotiate this city by city. But local control of rights-of-way has been an effective tool for cities to use to control haphazard proliferation of devices in their rights-of-way. This is gearing up to be a big battle – and one that will probably come to a head fairly soon.

Is our Future Mobile Wireless?

I had a conversation last week with somebody who firmly believes that our broadband future is going to be 100% mobile wireless. He works for a big national software company that you would recognize and he says the company believes that the future of broadband will be wireless and they are migrating all of their software applications to work on cellphones. If you have been reading my blog you know I take almost the opposite view, but there are strong proponents of a wireless future, and it’s a topic worth continually revisiting.

Certainly we are doing more and more things by cellphone. But I think those that view future broadband as mobile are concentrating on faster mobile data speeds but are ignoring the underlying overall data capacity of cellular networks. I still think that our future is going to become even more reliant on fiber in order to handle the big volumes of bandwidth we will all need. This doesn’t mean that I don’t love cellphone data – but I think it’s a complement for landline broadband and not an equivalent substitute. Cellphone networks have major limitations and they are not going to be able to keep up with our need for bandwidth capacity. Even today the vast majority of cellphone data is handed off to landline networks through WiFi. And in my mind that just makes a cellphone into another terminal on your landline network.

Almost everybody understands the difference in quality between using your cellphone in your home using WiFi versus doing the same tasks using only the cellular network. I largely use my cellphone for reading news articles. And while this is a lot lighter application than watching video, I find that I usually have problems opening articles on the web when I’m out of the house. Today’s 4G speeds are still pretty poor and the national average download speed is reported to be just over 7 Mbps.

I think all of the folks who think cellphones are the future are counting on 5G to make a huge difference. But as I’ve written many times, it will be at least a decade before we see a mature 5G cellular network – and even then the speeds are not likely to be hugely faster than the 4G specification today. 5G is really intended to increase the stability of broadband connections (less dropped calls) and the number of connections (able to connect to a lot of IoT devices). The 5G specifications are not even shooting for at a huge speed increase, with the specification calling for 100 Mbps download cellular speeds, which translates into an average of perhaps 50 Mbps connections for all of the customers within a cell site. Interestingly, that’s the same target speed of the 4G specification.

And those greater future speeds sounds great. Since a cellphone connection by definition is for one user, a faster speed means that a cellular connection will support a 4K video stream eventually. But what this argument ignores is that a home a decade from now is going to be packed with devices wanting to make simultaneous connections to the Internet. It is the accumulated volume of usage from all of those devices that is going to add up to huge broadband demand for homes.

Already today homes are packed with broadband hungry devices. We have smart TVs, cellphones, laptops, desktops and tablets all wanting to connect to the network. We have other bandwidth hungry applications like gaming boxes and surveillance cameras. More and more of us are cutting the cord and watching video online. And then there are going to piles of new devices with smaller broadband demands, but which in total will add up to significant bandwidth. Further, a lot of applications we use are now in the cloud. My home uses a lot of bandwidth every day just backing up my data files, connecting to software in the cloud, making VoIP calls, and automatically updating software and apps.

I’ve touted a statistic many times that you might be tired of hearing, but I think it’s at the heart of the matter. The amount of bandwidth used by homes has been doubling every three years since 1980, and there is no end in sight to that trend. Already today a 4G connection is inadequate to support the average home. If you don’t think that’s true, talk to the homes now using AT&T’s fixed LTE connections that deliver 10 Mbps. That kind of speed is not adequate today to provide enough bandwidth to use the many broadband services I discussed above. Cellular connections are already too slow today to provide a reasonable home broadband, even as AT&T is planning to foist these connections on millions of rural homes.

There is no reason to think that 5G will be able top satisfy the total broadband needs of a home. The only way it might do that is if we end up in a world where we have to buy a small cellular subscription for every device in our home – I know I would prefer to instead connect all of my devices to WiFi to avoid such fees. Yes, 5G will be faster, but a dozen years from now when 5G is finally a mature cellular technology, homes will need a lot more bandwidth and a 5G connections then will feel just as inadequate then as 4G feels today.

Unless we get to a future point where the electronics get so cheap that there will be a ‘cell site’ for every few homes, then it’s hard to figure that cellular can ever be a true substitute for landline broadband. And even if such a technology develops you still have to ask if it would make any sense to deploy. Those small cell sites are largely going to have to be fiber fed to deliver the needed bandwidth and backhaul. And in that case small cell sites might not be any cheaper than fiber directly to the premise, especially when considering the lifecycle costs of the cell site electronics. Even if we end up with that kind of network – it’s would not really be a cellular network as much as it would be using wireless loops as the last few feet of a landline network – something that for years we have called fiber-to-the-curb. Such a network would still require us to build fiber almost everywhere.

The Challenges of 5G Deployment

The industry is full of hype right now about the impending roll-out of 5G cellular. This is largely driven by the equipment vendors who want to stir up excitement among their stockholders. But not everybody in the industry thinks that there will be a big rush to implement 5G. For example, a group called RAN Research issued a report last year that predicted a slow 5G implementation. They think that 4G will be the dominant wireless technology until at least 2030 and maybe longer.

They cite a number of reasons for this belief. First, 4G isn’t even fully developed yet and the standards and implementation coalition 3GPP plans to continue to develop 4G until at least 2020. There are almost no 4G deployments in the US that fully meet the 4G standards, and RAN Research expects the wireless carriers to continue to make incremental upgrades, as they have always done, to improve cellular along the 4G path.

They also point out that 5G is not intended as a forklift upgrade to 4G, but is instead intended to coexist alongside. This is going to allow a comfortable path for the carriers to implement 5G first in those places that most need it, but not rush to upgrade places that don’t. This doesn’t mean that the cellular carriers won’t be claiming 5G deployments sometime in the next few years, much in the way that they started using the name 4G LTE for minor improvements in 3G wireless. It took almost five years after the first marketing rollout of 4G to get to what is now considered 3.5G. We are just now finally seeing 4G that comes close to meeting the full standard.

But the main hurdle that RAN Research sees with a rapid 5G implementation is the cost. Any wireless technology requires a widespread and rapid deployment in order to achieve economy of scale savings. They predict that the cost of producing 5G-capable handsets is going to be a huge impediment to implementation. Very few people are going to be willing to pay a lot more for a 5G handset unless they can see an immediate benefit. And they think that is going to be the big industry hurdle to overcome.

Implementing 5G is going to require a significant expenditure in small dense cell-sites in order to realize the promised quality improvements. It turns out that implementing small cell sites is a lot costlier and lot more expensive than the cellular companies had hoped. It also turns out that the technology will only bring major advantages to those areas where there is the densest concentration of customers. That means big city business districts, stadiums, convention centers and hotel districts – but not many other places.

That’s the other side of the economy of scale implementation issue. If 5G is only initially implemented in these dense customer sites, then the vast majority of people will see zero benefit from 5G since they don’t go to these densely packed areas very often. And so there are going to be two economy of scale issues to overcome – making enough 5G equipment to keep the vendors solvent while also selling enough more-expensive phones to use the new 5G cell sites. And all of this will happen as 5G is rolled out in drabs and dribbles as happened with 4G.

The vendors are touting that software defined networking will lower the cost to implement 5G upgrades. That is likely to become true with the electronics after they are first implemented. It will be much easier to make the tiny incremental 5G improvements to cell sites after they have first been upgraded to 5G capability. But RAN Research thinks it’s that initial deployment that is going to be the hurdle. The wireless carriers are unlikely to rush to implement 5G in suburban and rural America until they see overwhelming demand for it – enough demand that justifies upgrading cell sites and deploying small cell sites.

There are a few trends that are going to affect the 5G deployment. The first is the IoT. The cellular industry is banking on cellular becoming the default way to communicate with IoT devices. Certainly that will be the way to communicate with things like smart cars that are mobile, but there will be a huge industry struggle to instead use WiFi, including the much-faster indoor millimeter wave radios for IoT. My first guess is that most IoT users are going to prefer to dump IoT traffic into their landline data pipe rather than buy separate cellular data plans. For now, residential IoT is skewing towards the WiFi and towards smart devices like the Amazon Echo which provide a voice interface for using the IoT.

Another trend that could help 5G would be some kind of government intervention to make it cheaper and easier to implement small cell sites. There are rule changes being considered at the FCC and in several state legislatures to find ways to speed up implementation of small wireless transmitters. But we know from experience that there is a long way to go after a regulatory rule change until we see change in the real world. It’s been twenty years now since the Telecommunications Act of 1996 required that pole owners make their poles available to fiber overbuilders – and yet the resistance of pole owners is still one of the biggest hurdles to fiber deployment. Changing the rules always sounds like a great idea, but it’s a lot harder to change the mindset and behavior of the electric companies that own most of the poles – the same poles that are going to be needed for 5G deployment.

I think RAN Research’s argument about achieving 5G economy of scale is convincing. Vendor excitement and hype aside, they estimated that it would cost $1,800 today to build a 5G capable handset, and the only way to get that price down would be to make hundreds of millions of 5G capable handsets. And getting enough 5G cell sites built to drive that demand is going to be a significant hurdle in the US.

Wireless Networks Need Fiber

As I examine each of the upcoming wireless technologies it looks like future wireless technology is still going to rely heavily on an underlying fiber network. While the amount of needed fiber will be less than building fiber to every customer premise, supporting robust wireless networks is still going to require significant construction of new fiber.

This is already true today for the traditional cellular network and most existing towers are fiber-fed, although some have microwave backhaul. The amount of bandwidth needed at traditional cell sites is already outstripping the 1 or 2 GB capacity of wireless backhaul technologies. Urban cell sites today are fed with as much as 5 – 10 GB pipes and most rural ones have (or would like to have) a gigabyte feed. I’ve seen recent contractual negotiations for rural cell sites asking for as much as 5 GB of backhaul within the next 5 – 10 years.

Looking at the specification for future 5G cellular sites means that fiber will soon be the only backhaul solution for cell sites. The specifications require that a single cell site be capable of as much as 20 GB download and 10 GB upload. The cellular world is currently exploring mini-cell sites (although that effort has slowed down) to some degree due to the issues with placing these devices closer to customers. To be practical these small cell sites must be placed on poles (existing or newly built), on rooftops and on other locations found near to areas with high usage demand. The majority of these small sites will require new fiber construction. Today these sites can probably use millimeter wave radio backhaul, but as bandwidth needs increase, this is going to mean bringing fiber to poles and rooftops.

Millimeter wave radios are also being touted as a way to bring gigabit speeds to consumers. But delivering fast speeds means getting the radios close to customers. These radios use extremely high frequencies, and as such travel for short distances. As a hot spot a millimeter wave radio is only good for a little over 100 feet. But even if formed into a tight microwave beam it’s a little over a mile – and also requires true line-of-sight. These radios will be vying for the same transmitter locations as mini-cell sites.

Because of the short distances that can be delivered by the millimeter wave radios, this technology is going to initially be of most interest in the densest urban areas. Perhaps as the radios get cheaper there will be more of a model for suburban areas. But the challenge of deploying wireless in urban areas is that is where fiber is the most expensive to build. It’s not unusual to see new fiber construction costs of $150,000 and $200,000 per mile in downtown areas. The urban wireless deployment faces the challenge of getting both fiber and power to poles, rooftops and sides of buildings. This is the issue that has already stymied the deployment of mini-cell sites, and it’s going to become more of an issue as numerous companies want to build competing wireless networks in our cities. I’m picturing having the four major cellular companies and half a dozen wireless ISPs all wanting access to the same prime transmitter sites. All of these companies will have to deal with the availability of fiber, or will need to build expensive fiber to support their networks.

Even rural wireless deployments needs a lot of fiber. A quality wireless point-to-point wireless network today needs fiber at each small tower. When that is available then the current technologies can deploy speeds between 20 Mbps and 100 Mbps. But using wireless backhaul instead of fiber drastically cuts the performance of these networks and there are scads of rural WISPs delivering bandwidth products of 5 Mbps or less. As the big telcos tear down their remaining rural copper, the need for rural fiber is going to intensify. But the business case is often difficult to justify to build fiber to supply bandwidth to only a small number of potential wireless or wireline customers.

All of the big companies that are telling Wall Street about their shift to wireless technologies are conveniently not talking about this need for lots of fiber. But when they go to deploy these technologies on any scale they are going to run smack into the current lack of fiber. And until the fiber issue is solved, these wireless technologies are not going to deliver the kinds of speeds and won’t be quickly available everywhere as is implied by the many press releases and articles talking about our wireless future. I have no doubt that there will eventually be a lot of customers using wireless last mile – but only after somebody first makes the investment in the fiber networks needed to support the wireless networks.

More on 5G Standards

I wrote a blog last week about the new 5G standard being developed by the International Telecommunications Union (ITU). This standard is expected to be passed this November. However this standard is not the end of the standards process, but rather the beginning. The ITU IMT-2020 standard defines the large targets that define a fully developed 5G product. Basically it’s the wish list and a fully-compliant 5G product will meet the full standard.

But within 5G there are already a number of specific use cases for 5G that are being developed. The most immediate three are enBB (enhanced mobile broadband, or better functioning cellphones), URLLC (ultra-low latency communications to enhance data connectivity) and mMTC (massive machine type communications, to communicate with hordes of IoT devices). Each use case requires a unique set of standards to define how those parts of the 5G network will operate. And there will be other use cases.

The primary body working on these underlying standards is the 3GPP (3rd Generation Partnership Project). This group brings together seven other standards bodies – ARIB, ATIS, CCSA, ETSI, TSDSI, TTA, TTC – which demonstrates how complicated it is to develop a new wireless technology that will be accepted worldwide. I could talk about what each group does, but that would take a whole blog. Each standards group looks at specific aspects of radio communications such as the modulating schemes to be used, or the format of information to be passed so that devices can talk to each other. But the involvement of this many different standards groups explains a bit about why it takes so long to go from a new technology concept like 5G to functioning wireless products.

There is currently a lot work being done to create the specific standards for different portions of a 5G network. This includes the Radio Access Network (RAN), Services and System Aspects (SA) and Core Network and Terminals (CT).

The 5G RAN group, which looks at radio architecture, began work in 2015. Their first phase of work (referred to as Release 15) is looking at both the eMBB and the URLCC use cases. The goal is to define the specific architecture and feature set that is needed to meet the 5G specification. This first phase is expected to be finished in the fourth quarter of 2018. The 5G RAN group is also working on Release 16, which looks more specifically at getting radios that can comply with all of the aspects of IMT-2020 and is targeted to be completed in December of 2019.

The 5G SA group has already been actively working on the services and systems aspects of 5G. The preliminary work from this group was finished last year and final approval of their phase 1 work was just approved at the Mobile World Congress. But the SA group and the RAN group worked independently and it’s expected that there will be work to be done at the end of each phase of the RAN group to bring the two groups into sync.

The work on the core network has begun with some preliminary testing and concepts, but most of their work can’t be started until the RAN group finishes its work in 2018 and 2019.

The reason I am writing about this is to demonstrate the roadblocks that still remain to rolling out any actual 5G products. Manufacturers will not commit to making any mass-produced hardware until they are sure it’s going to be compatible with all parts of the 5G network. And it doesn’t look like any real work can be done in that area until about 2020.

Meanwhile there is a lot of talk from AT&T, Verizon and numerous vendors about 5G trials, and these press releases always make it sound like 5G products will quickly follow these trials. But for the most part these trials are breadboard tests of some of the concepts of the 5G architecture. These tests provide valuable feedback on problems developed in the field and on what works and doesn’t work.

And these companies are also making 5G claims about some technologies that aren’t really 5G yet. Most of the press releases these days are talking about point-to-point or point-to-multipoint radios using millimeter wave frequencies. But in many cases these technologies have been around for a number of years and the ‘tests’ are attempts to use some of the 5G concepts to goose more bandwidth out of existing technology.

And that’s not a bad thing. AT&T, Verizon, Google and Starry, among others, are looking for ways to use high-bandwidth wireless technologies in the last mile. But as you can see by the progress of the standards groups defining 5G, the radios we see in the next few years are not going to be 5G radios, no matter what the marketing departments of those companies call them.