Another Spectrum Battle

Back in July the FCC issued a Notice of Proposed Rulemaking seeking comments for opening up spectrum from 3.7 GHz to 4.2 GHz, known as the C-Band. As is happening with every block of usable spectrum, there is a growing tug-of-war between using this spectrum for 5G or using it for rural broadband.

This C-Band spectrum has traditionally been used to transit signals from satellites back to earth stations. Today it’s in use by every cable company that receives cable TV signals at a ‘big-dish’ satellite farm. The spectrum had much wider use in the past when it was used to deliver signal directly to customers using the giant 7 – 10 foot dishes you used to see in rural backyards.

This spectrum is valuable for either cellular data or for point-to-multipoint rural radio broadband systems. The spectrum sits in the middle between the 2.4 GHz and the 5.8 GHz used today for delivering most rural broadband. The spectrum is particularly attractive because of the size of the block, at 500 megahertz.

When the FCC released the NPRM, the four big satellite companies – Intelsat, SES, Eutelsat and Telesat – created the C-Band Alliance. They’ve suggested that some of their current use of this spectrum could be moved elsewhere. But where it’s not easy to move the spectrum, the group volunteered to be the clearing house to coordinate the use of C-Band for other purposes so that it won’t interfere with satellite use. The Alliance suggests that this might require curtailing full use of the spectrum near some satellite farms, but largely they think the spectrum can be freed for full use in most places. Their offer is seen as a way to convince the FCC to not force satellite companies completely out of the spectrum block.

I note that we are nearing a day when the need for the big satellite earth stations to receive TV might become obsolete. For example, we see AT&T delivering TV signal nationwide on fiber using only two headends and satellite farms. If all TV stations and all satellite farm locations were connected by fiber these signals could be delivered terrestrially. I also note this is not the spectrum used by DirecTV and Dish networks to connect to subscribers – they use the K-band at 12-18 GHz.

A group calling itself the Broadband Access Coalition (BAC) is asking the FCC to set aside the upper 300 megahertz from the band for use for rural broadband. This group is comprised of advocates for rural wireless broadband, including Baicells Technologies, Cambium Networks, Rise Broadband, Public Knowledge, the Open Technology Institute at New America, and others. The BAC proposal asks for frequency sharing that would allow for the spectrum to be used for both 5G and also for rural broadband using smart radios and databases to coordinate use.

Both the satellite providers and the 5G companies oppose the BAC idea. The satellite providers argue that it’s too complicated to share bandwidth and they fear interference with satellite farms. The 5G companies want the whole band of spectrum and tout the advantages this will bring to 5G. They’d also like to see the spectrum go to auction and dangle the prospect for the FCC to collect $20 billion or more from an auction.

The FCC has it within their power to accommodate rural broadband as they deal with this block of spectrum. However, recent history with other spectrum bands shows the FCC to have a major bias towards the promise of 5G and towards raising money through auctions – which allocates frequency to a handful of the biggest names in the industry.

The BAC proposal is to set aside part of the spectrum for rural broadband while leaving the whole spectrum available to 5G on a shared and coordinated basis. We know that in real life the big majority of all ‘5G spectrum’ is not going to be deployed in rural America. The 5G providers legitimately need a huge amount of spectrum in urban areas if they are to accomplish everything they’ve touted for 5G. But in rural areas most bands of spectrum will sit idle because the spectrum owners won’t have an economic use for deploying in areas of low density.

The BAC proposal is an interesting mechanism that would free up C-Band in areas where there is no other use of the spectrum while still fully accommodating 5G where it’s deployed. That’s the kind of creating thinking we need to see implemented.

The FCC keeps publicly saying that one of its primary goals is to improve rural broadband – as I wrote in a blog last week, that’s part of their primary stated goals for the next five years. This spectrum could be of huge value for point-to-multipoint rural radio systems and would be another way to boost rural broadband speeds. The FCC has it within their power to use the C-Band spectrum for both 5G and for rural broadband – both uses can be accommodated. My bet, sadly, is that this will be another giveaway to the big cellular companies.

When Will Small ISPs Offer Wireless Loops?

I wrote last week about what it’s going to take for the big wireless companies to offer 5G fixed wireless in neighborhoods. Their biggest hurdle is going to be the availability of fiber deep inside neighborhoods. Today I look at what it would take for fiber overbuilders to integrate 5G wireless loops into their fiber networks. By definition, fiber overbuilders already build fiber deep into neighborhoods. What factors will enable fiber overbuilders to consider using wireless loops in those networks?

Affordable Technology. Number one on the list is cheaper technology. There is a long history in the wireless industry where new technologies only become affordable after at least one big company buys a lot of units. Fifteen years ago the FCC auctioned LMDS and MMDS spectrum with a lot of hoopla and promise. However, these spectrum bands were barely used because no big companies elected to use them. The reality of the manufacturing world is that prices only come down with big volumes of sales. Manufacturers need to have enough revenue to see them through several rounds of technical upgrades and tweaks, which are always needed when fine-tuning how wireless gear works in the wild.

Verizon is the only company talking about deploying a significant volume of 5G fixed wireless equipment. However, their current first-generation equipment is not 5G compliant and they won’t be deploying actual 5G gear for a few years. Time will tell if they buy enough gear to get equipment prices to an affordable level for the rest of the industry. We also must consider that Verizon might use proprietary technology that won’t be available to others. The use of proprietary hardware is creeping throughout the industry and can be seen with gear like data center switches and Comcast’s settop boxes. The rest of the industry won’t benefit if Verizon takes the proprietary approach – yet another new worry for the industry.

Life Cycle Costs. Anybody considering 5G also needs to consider the full life cycle costs of 5G versus fiber. An ISP will need to compare the life cycle cost of fiber drops and fiber electronics versus the cost of the 5G electronics. There are a couple of costs to consider:

  • We don’t know what Verizon is paying for gear, but at the early stage of the industry my guess is that 5G electronics are still expensive compared to fiber drops.
  • Fiber drops last for a long time. I would expect that most of the fiber drops built twenty years ago for Verizon FiOS are still going strong. It’s likely that 5G electronics on poles will have to replaced or upgraded every 7 – 10 years.
  • Anybody that builds fiber drops to homes knows that over time that some of those drops are abandoned as homes stop buying service. Over time there can be a sizable inventory of unused drops that aren’t driving any revenue – I’ve seen this grow to as many as 5% of total drops over time.
  • Another cost consideration is maintenance costs. We know from long experience that wireless networks require a lot more tinkering and maintenance effort than fiber networks. Fiber technology has gotten so stable that most companies know they can build fiber and not have to worry much about maintenance for the first five to ten years. Fiber technology is getting even more stable as many ISPs are moving the ONTs inside the premise. That’s going to be a hard to match with 5G wireless networks with differing temperatures and precipitation conditions.

We won’t be able to make this cost comparison until 5G electronics are widely available and after a few brave ISPs suffer through the first generation of the technology.

Spectrum. Spectrum is a huge issue. Verizon and other big ISPs are going to have access to licensed spectrum for 5G that’s not going to be available to anybody else. It’s likely that companies like Verizon will get fast speeds by bonding together multiple bands of millimeter wave spectrum while smaller providers will be limited to only unlicensed spectrum bands. The FCC is in the early stages of allocating the various bands of millimeter wave spectrum, so we don’t yet have a clear picture of the unlicensed options that will be available to smaller ISPs.

Faster speeds. There are some fiber overbuilders that already provide a gigabit product to all customers, and it’s likely over time that they will go even faster. Verizon is reporting speeds in the first 5G deployments between 300 Mbps and a gigabit, and many fiber overbuilders are not going to want a network where speeds vary by local conditions, and from customer to customer. Wireless speeds in the field using millimeter wave spectrum are never going to be as consistently reliable and predictable as a fiber-based technology.

Summary. It’s far too early to understand the potential for 5G wireless loops. If the various issues can be clarified, I’m sure that numerous small ISPs will consider 5G. The big unknowns for now are the cost of the electronics and the amount of spectrum that will be available to small ISPs. But even after those two things are known it’s going to be a complex decision for a network owner. I don’t foresee any mad rush by smaller fiber overbuilders to embrace 5G.

AT&T and Connected Vehicles

AT&T just released a blog talking about their connected vehicle product. This blog paints a picture of where AT&T is at today and where they hope to be headed into the future in this market niche.

For a company like AT&T, the only reason to be excited about a new market niche is the creation of a new revenue stream. AT&T claims to have 24 million connected cars on its network as of the end of 3Q 2018. They also claim 3 million additional connected fleet vehicles. They also have over 1 million customers who are buying mobile WiFi hotspots from AT&T.

What does that look like as a revenue stream? AT&T has relationships with 29 global car manufacturers. Most new cars today come with some kind of connectivity plan that’s free to a car buyer for a short time, usually 3 to 6 months. When the free trial is over consumers must subscribe in order to retain the connectivity service.

As an example of how this works, all new Buicks and Fiats come with AT&T’s UConnect Access for a 6-month free trial period. This service provides unlimited broadband to the vehicle for streaming video or for feeding the on-board mapping system. After the trial customers must subscribe to the service at a monthly rate of $14.99 per month – or they can buy a la carte for connectivity at $9.99 per day or $34.99 per month.

In the blog AT&T touts a relationship with Subaru. The company provides a trial subscription to Starlink that provides on-board navigation on a screen plus safety features like the ability to call for roadside assistance or to locate a stolen vehicle. Subaru offers different plans for different vehicles that range from a Starlink trial of between 4-months and 3-years. Once the trial is over the cost of extending Starlink is $49 for the first year and then $99 per year to extend just the security package or $149 per year to extend the whole service. Starlink is not part of AT&T, so only some portion of this revenue goes to the carrier.

I wonder how many people extend these free trials and become paying customers? I have to think that the majority of the AT&T connected vehicles are under the Starlink relationship which has been around for many years. Families that drive a lot and watch a lot of video in a vehicle might find the UConnect Access to be a much better alternative than using cellular data plans. People who want the feature of locating their car if stolen might like the Starlink. However, most drivers probably don’t see a value in these plans. Most of the features offered in these packages are available as part of everybody’s cellular data plans using the Bluetooth connectivity in these vehicles.

The vehicle fleet business, however, is intriguing. Companies can use this connectivity to keep drivers connected to the home office and core software systems. This can also be done with cellphones, but I can think of several benefits to building this directly into the vehicle.

The second half of their blog discusses the possibility for 5G and automated cars. That’s the future revenue stream the company is banking on, and probably one of their biggest hopes for 5G. They have two hopes for 5G vehicle connectivity:

  • They hope to provide the connectivity between vehicles using 5G and the cloud. They believe that cars will be connected to the 5G network in order to ‘learn’ from other vehicle’s driving experience in the immediate vicinity.
  • They also hope to eventually provide broadband to driverless cars where passengers will be interested in being connected while traveling.

The first application of connecting nearby vehicles is no guarantee. It all depends on the technology path chosen to power driverless vehicles. There is one school of thought that says that the majority of the brains and decision making will be done by on-board computers, and if cars connect to nearby vehicles it will be through the use of on-board wireless communication. AT&T is hoping for the alternate approach where that connectivity is done in the cloud – but that’s going to require a massive investment in small cell sites everywhere. If the cloud solution is not the preferred technology then companies like AT&T will have no incentive to place 5G cell sites along the millions of miles of roads.

This is one of those chicken and egg situations. I liken it to smart city technology. A decade ago many predicted that cities would need mountains of fiber to support smart cities – but today most such applications are being done wirelessly. Any company banking on a fiber-based solution got left behind. At this point, nobody can predict the technology that will ultimately be used by smart cars. However, since the 5G technology needs the deployment of a massive ubiquitous cellular network, the simpler solution is to do it some other way.

Where Will 5G Find Fiber?

I was talking to one of my clients about 5G. This particular client is a fiber-overbuilder and they verified something I’ve suspected – they don’t plan to ever make any of their fiber available for a 5G provider wanting to deploy 5G small cell sites. They reason that 5G point-to-point radios, like Verizon is now launching, would compete directly with their retail broadband products and they can’t think of a scenario where they would assist a competitor to poach their own retail customers.

This is a break with the past because this client today provides fiber to a number of the big cellular towers and hopes to continue those sales. These are good revenue and help to offset the cost of building fiber to the towers. This leads me to ask the title question of this blog – where are the 5G providers going to find the needed fiber? A lot of the rosy predictions I’ve read for widespread 5G deployment assume that 5G providers will be able to take advantage of the fiber that’s already been deployed by others, and I’m not so sure that’s true.

I have no doubt that big backhaul fiber providers like Level 3 or Zayo will sell 5G connectivity where they have the capacity. However, much of their fiber network is not strategically located for 5G. First, 5G networks are going to need to get to numerous poles, and that requires fiber with existing access point. Much of the fiber built by companies like Level 3 was built to get to specific buildings or big cellular towers that anticipate the need for other access points. These fiber companies are also leery about tapping into fibers feed their largest customers, who often pay extra for guaranteed service. A lot of their fiber is underground and not easy to get to the needed pole connections.

Of more relevance is that these carriers are not going to own a lot of fiber that goes deep into neighborhoods where the 5G providers want to deploy. Most of the fiber built deep into residential neighborhoods has been built by fiber-to-the-premise overbuilders or cable companies. These companies use their fiber to sell retail broadband to residents and businesses. Fiber overbuilders, from Google Fiber down to the smallest municipal fiber network are not likely to sell fiber to the pole in neighborhoods where they are already a retail ISP.

The cable companies are not going to make their fiber available for 5G – they’ve made it clear that their future path lies in the DOCSIS 3.1 upgrades, including upgrading beyond gigabit speeds as needed. All of the major cable companies have said that have the ultimate end-game of fiber-to-the-premise. They’ve all cited 5G as one of the reasons they are increasing speeds and are not likely to sell access to a major competitor.

AT&T is the only other carriers with an extensive fiber network that goes deep into many neighborhoods. However, AT&T has been building FTTP connections in neighborhoods where they have fiber. For now, they don’t intend to mimic Verizon and are going to stick with FTTP rather than 5G. It would be tactically smart for AT&T to refuse to sell 5G connections to others. But AT&T is the hardest company in the industry to predict because they wear so many hats, and their retail fiber ISP business is in a different business silo than their wholesale fiber connection business – so who knows what they will do.

I don’t see a glut of existing fiber sitting waiting to sell to 5G providers. That seems to be the major hurdle for the rapid 5G deployment that the FCC, the White House and the cellular carriers have all been loudly touting. How many 5G companies are going to want to make the gigantic needed investment in fiber to get deep into neighborhoods?

I think the folks in Washington DC have gotten a false sense of the potential for 5G by seeing what Verizon is doing. But Verizon is taking advantage of the many billions of dollars of fiber they have already built over the years, and their 5G network is going to follow that fiber footprint. There are not many other companies with a glut of fiber that can be leveraged it in the same manner as Verizon.

Verizon has already announced that they will be passing roughly 11 million homes with fiber. They can be that specific because they know what’s close to their existing fiber. I doubt that they are going to expand anywhere else, just like they didn’t expand FiOS where the construction costs weren’t low. If Verizon can’t afford to deploy 5G where they don’t already have fiber, then how can anybody else justify it? Deploying 5G is like deploying any new network – it is only going to make financial sense where deployment costs are reasonable – and for now that means where there is already easy access to fiber. I think the opportunities for rapid 5G deployment are a lot less than what policy-makers think.

Are Millimeter Wave Radios Safe?

Deep inside the filing of the recent docket at the FCC that resulted in eased access to poles for 5G providers were comments that warned about the unknown health impacts of millimeter wave radiation. A group of 225 scientists from 41 countries filed comments in Dockets No. 15-79 asking that the FCC be cautious in implementing millimeter wave radiation without further scientific research into the impacts of prolonged exposure of the radiation to humans. These scientists have all published peer-reviewed papers on the topic.

As scientists are wont to do, their wording sounds cautious, but in scientific language is a stern warning: “There is scientific evidence to cause concern among independent scientists, that this new infrastructure, on top of existing electrical and wireless infrastructures, will cause more harm to mankind and nature . . . The FCC needs to critically consider the potential impact of the 5th generation wireless infrastructure on the health and safety of the U.S. population before proceeding to deploy this infrastructure.”

I looked around the web to find some of the research that’s been done in this area in the past. A quick web search showed:

·         The biggest impact of millimeter wave radiation is on the skin and 90% of the transmitted power is absorbed by the dermis and epidermis layers of the skin – meaning concerns about skin cancer.

·          A 1994 study showed that low levels of millimeter radiation created lens opacity in rats, which is linked to cataracts.

·         A 1992 Russian study found that frequencies between 53-78 GHz caused overall stress in rats that manifested by an increase in arrhythmia and other changes to heart rates.

·         A 2002 Russian study found that exposure to low level 42 GHz radiation had a profound impact on the overall immune systems in rats.

·         A 2016 Armenian study observed that millimeter wave radiation created changes in the cells of bacteria. They postulated that the radiation could do the same to humans. This study concluded that changes to bacteria could change result in increasing drug resistant.

·         Another Armenian study showed that the impact to plants might be even greater than to animals.

·         Dr. Joel Moskowitz of UC Berkeley says that the impacts of all of these other studies might be understated since 5G uses pulsed frequencies. The studies were all done using constant frequency and Dr. Moskowitz has shown that pulsed frequencies magnify the impact of radiation on organisms.

One of the handful of current uses of millimeter wave radiation is in airport scanners, which use frequencies between 24 – 30 GHz. Numerous studies have shown that the likely exposure from these scanners is safe, but made the conclusion based upon the relative short burst of exposure. The issue that has scientists concerned about 5G is continuous transmission from poles in front of homes, and perhaps eventually building some of this frequency into cellphones.

Obviously, no study has yet shown a direct health impact from pole-mounted 5G transmitters since they are just now starting to see their first deployments. The scientific evidence of the dangers of the prolonged low-level radiation has a lot of people concerned. I’ve been contacted by several groups that are starting to alert their local officials of this danger (the inbox of a blogger can be really interesting). Nationwide several local politicians have jumped on the issue.

The question these local groups are asking is if there is any way to use the health concerns to try to block 5G deployment in their neighborhoods. It looks to me like the recent FCC order for allowing small cell sites on poles doesn’t contain much ambiguity – pole owners have a federal mandate to connect the 5G devices. However, that order is being challenged in court by numerous states and cities and I imagine that the health concerns are going to be one of the issues raised in those appeals – with the primary legal tactic challenging if the FCC has the jurisdiction to override cities on pole issues.

Interestingly, Verizon has announced a timeline that seems to be going full bore on installation of 5G transmitters. The industry is usually cautious about relying on any FCC order until it’s been vetted by the courts, but perhaps Verizon is only concentrating on 5G deployment in cities that have invited them to deploy, like Sacramento. It won’t be surprising to see cities ask for an injunction against deployment until the courts decide on the issues.

Will South Dakota Get 5G?

The Senate Commerce Committee held a recent hearing in Sioux Falls, South Dakota talking about the benefits that 5G will bring to the state. The hearing was chaired by Senator John Thune, who’s one of the primary telecom-related members of Congress.

A local paper quoted Thune as claiming that 5G is going to transform the economy of the country and of the state. He cited the same 5G talking points used by the FCC in their recent order that mandated cheap and fast connections to poles for 5G transmitters. Thune also said we’re in a race with China, Japan and South Korea and that we can’t afford to lose the 5G race.  FCC Commissioner Brad Carr was at the hearing and said that 5G could bring hundreds of millions of dollars of economic benefit to the state. He also estimated that realizing the benefits of 5G would require hundreds of thousands of small cells mounted on poles and light poles in the state.

The numbers cited in this hearing stun me. What would it mean to have hundreds of thousands of 5G transmitters on poles in South Dakota and could such a network create hundreds of millions of benefits for the state? I decided to try to put those numbers into context.

I still don’t know what a 5G transmitter on a pole will cost. I’ve heard that a full-blown small cell site currently costs more than $15,000 – but I have to assume that in order to make this even reasonably profitable that most of the devices in a 5G network will have to cost far less (and likely have far less functionality than a full-blown small cell site). Assuming thst that manufacturers will somehow get the installed price down to $2,500 each, then deploying on 200,000 poles (derived from “hundreds of thousands of poles”) equates to a cost in the state for just for the pole electronics of $500 million. This doesn’t include the cost of the fiber and other backhaul costs needed to support the 5G gigabit network.

I look at that $500 million number, knowing that it’s only a portion of the cost of deploying 5G and I wonder who is going to make that kind of investment in South Dakota. It’s not going to be the two primary incumbents, CenturyLink or Midco, the primary cable TV incumbent. It’s unlikely that Verizon owns any significant amounts of fiber in the state and they are not likely to do much there. I look around the industry and I can’t see any major player who would make a $500 million investment in a state with so few people.

Consider the demographics. South Dakota is one of the least populated states and the Census estimates the population to be around 870,000 with almost 400,000 housing units. The biggest city is Sioux Falls with a population of 176,000, Rapid City has 70,000 and cities are much smaller after that. When you get outside the cities it’s one of the least densely populated states.

Even if somebody made that kind of investment in South Dakota, how do they make their money back? Very few large public companies today are willing to earn infrastructure returns on investments, which is one of the primary drivers of our infrastructure crisis. Almost nobody other than governments are willing to invest in projects that have 10 and 20-year paybacks. This is the primary reason why no big ISPs are building residential fiber-to-the-home. It’s hard to envision the paybacks for 5G being much faster than fiber.

If I do the math on a $500 million investment, it would require a new revenue stream of $35 per month for every one of the 400,000 households in North Dakota to repay that investment in 3 years. Even at 6 years that’s still $17.50 per month for every household in the state. When you consider that only a much smaller percentage of people would somehow pay for some sort of theoretical 5G product, the cost per potential customer becomes gigantic – if 25% of the people in the state somehow bought a 5G product that would require a new expenditure of $70 per home per month to pay this investment off in the six years that Wall Street might find acceptable.

Of course, the investment is not just $500 million because there are a lot of other costs to bringing a widespread 5G network. To build the kind of network envisioned at the Congressional hearing has to cost far north of a billion dollars, any possibly several billions if a lot of fiber has to be built. That makes me wonder what the 5G hype is all about. It’s hard to envision anybody making this kind of investment in South Dakota. I’m not busting on South Dakota because this same cost to benefit applies to any place outside of large NFL cities with a high density of households.

I don’t have a crystal ball and I can’t say that somebody won’t invest in 5G in states like South Dakota. But I understand business plans and paybacks and I can’t foresee any of the current big ISPs in the industry making the needed investments where housing density is low. Smaller ISPs can’t raise the huge amount of needed money. It’s certainly possible that some of the neighborhoods a few cities in the state might see some 5G, but that’s probably not going to be on anybody’s radar for a while. I’m skeptical because I just can’t see a way to make the math work.

Deploying 5G – It’s no Panacea

This was published last week as an article on WRAL Techwire, a Raleigh TV station. 

If you read many articles about 5G, you’d think that we’re on the cusp having wireless broadband brought to most homes in America, providing homes with another option for broadband. This idea was recently bolstered by news that Verizon plans to offer 5G wireless broadband to as many as 11 million homes over the next few years.

However, Verizon has one huge advantage over the rest of the market in that they already own an extensive fiber network that reaches to cellular towers, large businesses, schools, large apartment complexes and high-rise buildings. Verizon plans on leveraging this existing network to bring wireless broadband to neighborhoods lucky enough to be near to their fiber. It’s unlikely that anybody else will copy the Verizon business plan – the other big telcos with large fiber networks, AT&T and CenturyLink, have made it clear that they are not pursuing 5G broadband to homes.

Verizon has a second benefit that few others share. As a huge cellular carrier, Verizon will benefit by relieving the pressure on their cellular networks in neighborhoods where they offer 5G. The bandwidth being demanded on cellular networks is the fastest growing sector of the industry with total bandwidth requirements doubling every 18 months. Verizon will save a lot of money by not having to bolster their cellular backbones in 5G neighborhoods.

So, what would it take for anybody else to provide the same 5G wireless technology as Verizon? The 5G technology relies on the placement of small transmitters on utility poles or street lights and the FCC just passed rules making it easier for a provider to get the needed connections. Each transmitter will be able to wirelessly transmit broadband to homes or businesses in the immediate area. Verizon press releases say the effective distance for delivering a signal is up to 2,000 feet, but most of the industry thinks the realistic distance is closer to 1,000 feet. That means that any given pole-transmitter will be able to ‘see’ anywhere from a handful up to a few dozen homes, depending upon what’s called line-of-sight. The 5G spectrum requires a relatively clear path between the transmitter and a dish placed on the home – and that means that 5G is best deployed on straight streets without curves, hills, dense tree cover or anything that decreases the number of homes within range of a transmitter.

The first-generation Verizon technology claims broadband speeds of around 300 Mbps, with the goal to eventually reach gigabit speeds. That level of bandwidth can only be delivered to the pole-mounted unit in two ways – with fiber or with a high-bandwidth wireless link. If wireless backhaul is used to bring broadband to the poles there can be no obstructions between the pole units and the wireless basestation – unlike many kinds of wireless transmission, high-bandwidth wireless backhaul can’t tolerate any obstructions in the transmission path. That requirement for pure line-of-sight will make wireless backhaul impractical in many neighborhoods.

Where wireless backhaul won’t work a 5G network will require fiber to each pole transmitter. The cost of building fiber to neighborhoods is the biggest barrier to widespread 5G deployment. It’s expensive to string fiber in residential neighborhoods. The cost of putting fiber on poles can be expensive if there are already a lot of other wires on the poles (from the electric, cable and telephone companies). In neighborhoods where other utilities are underground the cost of constructing fiber can be exorbitantly high.

To summarize, a 5G network need transmitters on poles that are close to homes and also needs fiber at or nearby to each pole transmitter to backhaul these signals. The technology is only going to make financial sense in a few circumstances. In the case of Verizon, the technology is reasonably affordable since the company will rely on already-existing fiber. An ISP without existing fiber is only going to deploy 5G where the cost of building fiber or wireless backhaul is reasonably affordable. This means neighborhoods without a lot of impediments like hills, curvy roads, heavy foliage or other impediments that would restrict the performance of the wireless network. This means not building in neighborhoods where the poles are short or don’t have enough room to add a new fiber. It means avoiding neighborhoods where the utilities are already buried. An ideal 5G neighborhood is also going to need significant housing density, with houses relatively close together without a lot of empty lots.

This technology is also not suited to downtown areas with high-rises; there are better wireless technologies for delivering a large data connection to a single building, such as the high bandwidth millimeter wave radios used by Webpass. 5G technology also is not going to make a lot of sense where the housing density is too low, such as suburbs with large lots. 5G broadband is definitely not a solution for rural areas where homes and farms are too far apart.

5G technology is not going to be a panacea that will bring broadband to most of America. Most neighborhoods are going to fail one of the needed parameters – by having poles without room for fiber, by having curvy roads where a transmitter can only reach a few homes, etc. It’s going to be as much of a challenge for an ISP to justify building 5G as it is to build fiber to each customer. Verizon claims their costs are a fraction of building fiber to homes, but that’s only because they are building from existing fiber. There are few other ISPs with large, underutilized fiber networks that will be able to copy the Verizon roadmap. With the current technology the cost of deploying 5G looks to be nearly identical to the cost of deploying fiber-to-the-home.

Flexible Numerology

This is the last in a series that looks at the underlying technologies that will create improvements for 5G – I looked previously at MIMO antennas and network slicing. Today I look at flexible numerology. Flexible numerology, in a nutshell involves new techniques that allow for changing the width of data channels in a frequency band.

The easiest way to understand the issues involved is to think back at how we used wireless devices in the past. Anybody that ever fiddled with an older 802.11n WiFi router using 2.4 GHz remembers directing different devices in the home to channels 1,6 or 11. While the 2.4 GHz band has 11 separate available channels, most wireless router manufacturers limited the use to those three channels in order to avoid cross-channel interference. They knew that if a home only used these three channels they’d likely not see such interference and would get the maximum performance on each channel. However, the decision to use only those three channels limited the amount of bandwidth that can be utilized. In peak usage situations only 3 of the 11 channels of 2.4 GHz are carrying bandwidth – avoiding interference meant not using much of the available frequency.

It’s easy to think of the channels within a wireless frequency as separate channels, because that’s how they are defined at the FCC. Cable companies are able to create distinct channels of frequency within the controlled confines of a coaxial cable in way to limit interference between channels. But when transmitted in the wild through the air all sorts of interference arises. Anybody old enough to remember watching TV in the 50s can remember times when you could see ghosts of a nearby channel when you were watching one of the low channel numbers.

Our cellular networks have been designed in a similar fashion to the WiFi channels. Within each of the frequencies used for cellular service are channels predefined by the FCC, with buffers between each channel. However, even with the buffers there is cross-channel interference between neighboring channels, and so the cellular carriers have selectively chosen to spread the actual use of frequency in ways similar to how we used channels 1,6 and 11 for WiFi.

Flexible numerology is new goal for 5G that was published with the 3GPP Release 15 standard. Flexible numerology is part of a system for allocating frequency in a new way that is intended to get the most and best use of the spectrum.

5G will use the same underlying method for modulating signals as 4G LTE – orthogonal frequency division multiplexing (OFDM). The OFDM scheme is the current way to try to get the best use of frequency and with OFDM a data stream is split across several separate narrowband channels to reduce interference, much in the same way that we used the three channels of WiFi.

Flexible numerology is going to give the cell site the option to create much smaller narrowband channels within the channels described in the OFDM standard. That’s the magic sauce that will enable 5G to communicate with huge number of devices without creating massive interference.

Consider a situation of two users at a 5G site. One is an IoT sensor that wants to trickle small amounts of data to the network and the other is a gamer that needs bursts of huge amounts of bandwidth. In the LTE network both devices would be given a narrowband channel – the IoT device for perhaps a tiny amount of time and the gamer for longer bursts. That’s an inefficient use of frequency since the IoT device is transmitting only a tiny amount of data. For even the short time that the cell site communicates with that device, in an LTE network the device commands as much bandwidth as any other user.

Flexible numerology will allow assigning a tiny slice of frequency to the IoT device. For example, the cell site might elect to assign 1/64th of a channel to the IoT device, meaning the remaining 63/64ths of the frequency can be assigned to some other purpose to be used at the same time that the IoT device is demanding bandwidth. In a 5G network the IoT device might grab a tiny slice of frequency for a short period of time and barely create a ripple in the overall use of frequency at the cell site.

The cellular network might treat the gamer the same as today but has numerous new options with flexible numerology to improve the gaming performance. It might separate sent and received data and size each path according to needs. It might create a connection for a longer time period than normal to efficiently transmit the needed packages. Essentially, flexible numerology lets the cell site treat every customer differently depending upon their specific needs.

This implementation of flexible numerology for 5G is complicated and will require new algorithms that ultimately get built into the chips for 5G devices. It’s always interesting to watch how new standards are implemented in the industry. I’ve seen numerous papers on the web over the last few months from labs and universities looking at the challenges of flexible numerology. These investigations will eventually get translated into lab trials of devices, and, if those trials are successful make it into the production for both cell sites and cellular devices. This is why a new standard like 5G can’t be implemented immediately. Standards define the problem, and then scientists, engineers and manufacturers take a shot at making the new ideas work (or sometimes find out that they don’t work). It’s likely to be years until the flexible numerology is made to work good enough to be in everyday use in cell sites – but when it does the utilization of frequency will be significantly improved, which is a key goal for 5G.

I’m Not a Fan of the 5G Hype

I read a lot of articles talking about what a huge deal 5G will be for the economy. The source of the excitement is the huge numbers being thrown around. For example, Qualcomm and IHS Technology issued a report in 2017 that estimated that 5G could enable $12 trillion in economic output around the world by 2035. That same report made the incredibly hyped claim that 5G could be as important to the world as the introduction of electricity. It’s no wonder that financial people are excited about the potential for 5G and why so many companies want to somehow grab a piece of this new market.

But I look around my own part of the world and I have a hard time seeing this kind of impact. I live in a town of 90,000 people. If we are like the average US market then roughly 85% of homes here already have landline broadband. Practically everybody here also has a cellphone, with the majority using smartphones.

People may read my blog and think I am not a fan of 5G – but that’s not true, I’m just not a fan of the hype. I would love for Verizon to offer me another choice of home broadband – I would consider changing to Verizon at the right price, as would many other households. My biggest question is how much value Verizon would create by introducing 5G in my town. Let’s say Verizon was to capture 30% of the broadband market here – that certainly creates an advantage to Verizon and gives them a significant new revenue stream. However, for every customer Verizon gains, Charter or AT&T would lose a customer, and overall that’s a zero-sum game. Further, if you assume that 5G competition would drive down prices a bit (it might not since oligopolies tend to not compete on price), then the overall spending on broadband in the town might actually decrease a bit.

The same thing would happen with cellular 5G. The big four cellular companies will have to spend a lot to upgrade all of the cell sites here to 5G. We’re a hilly and heavily wooded City and it will take a lot of small cell sites just to fill in the existing cellular holes. But unless they can find a way to charge more for 5G cellular broadband, then cellphone broadband is also a zero-sum game. Everybody in town already has a cellphone and a data plan, and the long-term trend is for cellular data prices to drop. I don’t see the new revenue stream from 5G cellular that will pay for the needed upgrades. Perhaps faster cellular data speeds will attract more people to drop landlines, but that’s also a zero-sum for the market as a whole.

There is one new aspect of 5G that the cellular carriers are counting on to create a new revenue stream. Once the 5G technology has been developed, the 5G standard calls for the ability of a cell site to communicate with as many as 100,000 devices – a huge increase over today’s capabilities. The cell carriers are clearly banking on IoT as the new revenue opportunity.

However, that kind of transition isn’t going to happen overnight. There are a whole lot of steps required before there is a huge cellular IoT revenue stream. First, the technology has to be developed that will handle that huge number of IoT devices. The 5G core standards were just developed last year and it will take years for vendors and labs to achieve the various goals for 5G. As those improvements are realized it will take a lot longer to introduce them into the cellular networks. We are just now finally seeing the deployment of 4G LTE – AT&T is just now deploying what they call 5G Evolution into any major markets, which is actually fully-compliant 4G LTE. The same slow roll-out will occur with 5G – we’ll advance through 4.1G, 4.2G, etc. until we see fully-compliant 5G network in a decade.

We’ll also have to wait for the rollout of IoT sensors that rely on a 5G network. It will be a bit of a chicken and egg situation because nobody will want to deploy devices that need 5G until 5G is active in a sufficient number of neighborhoods. But eventually this will come to pass – to a degree we can’t predict.

The question is if IoT usage is the trillion-dollar application. I certainly look forward to a time when I might have an embedded chip for 24/7 health monitoring using a 5G network – that’s a service that many people will be willing to pay for. But there is no guarantee that the revenue streams will materialize for IoT monitoring to the extent envisioned by AT&T and Verizon. I’ve done the math and the only way that the carriers can see a trillion-dollar benefits from IoT is if future homes have an IoT monitoring bill of the same magnitude as our current cellular or broadband bills – and that may never come to pass. I would love to see a concrete business plan that predicts where these huge new benefits come from, but I’ve seen nothing specific other than the big claims.

There is one aspect of the hype that I do buy. While I can’t see any way to equate the value of 5G to be as important as electricity, it is likely to share the same kind of introduction cycle that we saw with the electric grid. It took 25 years for electricity to spread to the majority of US cities and another 25 years until it was in most of rural America. New technologies today deploy faster than the deployment of electric grids – but this still can’t happen overnight and is at likely to be many years until rural America sees 5G cellular and a lot longer for 5G fixed broadband.

If you believe the hype in the press, we’ll start seeing big benefits from 5G in 2019 and 2020. I can promise you a blog at the end of next year that looks to see if any of this hype materialized – but I already suspect the answer will be no.

False Advertising for 5G

As has been expected, the wireless carriers are now actively marketing 5G cellular even though there are no actual 5G deployments. The marketing folks are always far in front of the engineers and are proclaiming 5G today much in the same way that they proclaimed 4G long before it was available.

The perfect case in point is AT&T. The company announced the launch of what they are calling 5G Evolution in 239 markets. They are also claiming they will be launching what they are calling standards-based 5G in at least 19 cities in early 2019.

The 5G Evolution product doesn’t contain any part of the new 5G standards. Instead, 5G Evolution is AT&T’s deployment of 4G LTE-Advanced technology, which can be characterized as their first fully-compliant 4G product. This is a significant upgrade that they should be proud of, but I guess their marketing folks would rather call this an evolutionary step towards 5G rather than admit that they are finally bringing mature 4G to the market – a claim they’ve already been making for many years.

What I find most annoying about AT&T’s announcement is the claim that 5G Evolution will “enable peak theoretical wireless speeds for capable devices of at least 400 megabits per second”, although their footnote goes on to say that “actual speeds are lower and will vary”. The 4G standard has been theoretically capable of speeds of at least 300 Mbps in a lab setting since the standard was first announced – but that theoretical speed has no relevance to today’s 4G network that generally delivers an average 4G speed of less than 15 Mbps.

This is like having a fiber-to-the-home provider advertise that their product is capable of speeds of 159 terabits per second, although actual speeds might be something less (that’s the current fastest speed achieved on fiber by scientists at the NICT Network System Research Institute in Japan). The intent of the statement on the AT&T website is clearly aimed at making people think they will soon be getting blazingly fast cellular data – which is not true. This is the kind of false advertising that is overstating the case for 5G (and in this case for 4G) that is confusing the public, politicians and regulators. You can’t really blame policy-makers for thinking that wireless will soon be the only technology we will need when the biggest wireless provider shamelessly claims speeds far in excess of what they will be ever be deploying.

AT&T’s second claim of launching standards-based mobile 5G in 19 markets is a little closer to the truth, but is still not 5G cellular. That service is going to deploy millimeter spectrum hotspots (a technology that is being referred to as Mi-Fi) in selected locations in 19 cities including Las Vegas, Los Angeles, Nashville, Orlando, etc.

These will be true hotspots, similar to what we see in Starbucks, meaning that users will have to be in the immediate vicinity of a hotspot to get the faster service. Millimeter wave hotspots have an even shorter propagation distance than normal WiFi hotspots and the signal will travel for a few hundred feet, at best. The hotspot data won’t roam and will only work for a user while they stay in range of a given hot spot.

AT&T hasn’t said where this will be deployed, but I have to imagine it will be in places like big business hotels, convention centers and indoor sports arenas. The deployment serves several purposes for AT&T. In those busy locations it will provide an alternate source of broadband for AT&T customers who have a phone capable of receiving the Mi-Fi signal. This will relieve the pressure on normal cellular data locally, while also providing a wow factor for AT&T customers that get the faster broadband.

However, again, AT&T’s advertising is deceptive. Their press releases make it sound like the general public in these cities will soon have much faster cellular data, and they will not. Those with the right phone that find themselves in one of the selected venues will see the faster speeds, but this technology will not be deployed to the wider market in these cities. Millimeter wave hotspots are an indoor technology and not of much practical use outside. The travel distances are so short that a millimeter wave hot spot loses a significant percentage of its strength in the short distance from a pole to the ground.

I can’t really blame the marketing folks at AT&T for touting imaginary 5G. It’s what’s hot in the marketplace today and what the public has been primed to expect. But just like the false hype when 4G was first introduced, cellular customers are not on the verge of seeing blazingly fast cellphone service in the places they live and work. This advertising seems to be intended to boost the AT&T brand, but it also might be defensive since other cellular carriers are making similar claims.

Unfortunately, this kind of false advertising plants the notion for politicians and policy-makers that cellular broadband will soon be all we will need. That’s an interesting corporate tactic to take by AT&T which is also building more fiber-to-the-premise right now than anybody else. These false claims seems to be most strongly competing with their own fiber broadband. But as I’ve always said, AT&T wears many hats and I imagine that their own fiber folks are as annoyed by this false advertising as the rest of us in the industry.