The Physics of Millimeter Wave Spectrum

Many of the planned used for 5G rely upon the use of millimeter wave spectrum, and like every wireless technology the characteristics of the spectrum defines both the benefits and limitations of the technology. Today I’m going to take a shot at explaining the physical characteristics of millimeter wave spectrum without using engineering jargon.

Millimeter wave spectrum falls in the range of 30 GHz to 300 GHz, although currently there has been no discussion yet in the industry of using anything higher than 100 GHz. The term millimeter wave describes the shortness of the radio waves which are only a few millimeters or less in length. The 5G industry is also using spectrum that is a little longer than millimeter waves size such as 24 GHz and 28 GHz – but these frequencies share a lot of the same operating characteristics.

There are a few reasons why millimeter wave spectrum is attractive for transmitting data. The millimeter spectrum has the capability of carrying a lot of data, which is what prompts discussion of using millimeter wave spectrum to deliver gigabit wireless service. If you think of radio in terms of waves, then the higher the frequency the greater the number of waves that are being emitted in a given period of time. For example, if each wave carries one bit of data, then a 30 GHz transmission can carry more bits in one second than a 10 GHz transmission and a lot more bits than a 30 MHz transmission. It doesn’t work exactly like that, but it’s a decent analogy.

This wave analogy also defines the biggest limitation of millimeter wave spectrum – the much shorter effective distances for using this spectrum. All radio waves naturally spread from a transmitter, and in this case thinking of waves in a swimming pool is also a good analogy. The further across the pool a wave travels, the more dispersed the strength of the wave. When you send a big wave across a swimming pool it’s still pretty big at the other end, but when you send a small wave it’s often impossible to even notice it at the other side of the pool. The small waves at millimeter length die off faster. With a higher frequency the waves are also closer together. Using the pool analogy, that means that the when waves are packed tightly together then can more easily bump into each other and become hard to distinguish as individual waves by the time they get to the other side of the pool. This is part of the reason why shorter millimeter waves don’t carry as far as other spectrum.

It would be possible to send millimeter waves further by using more power – but the FCC limits the allowed power for all radio frequencies to reduce interference and for safety reasons. High-power radio waves can be dangerous (think of the radio waves in your microwave oven). The FCC low power limitation greatly reduces the carrying distance of this short spectrum.

The delivery distance for millimeter waves can also be impacted by a number of local environmental conditions. In general, shorter radio waves are more susceptible to disruption than longer spectrum waves. All of the following can affect the strength of a millimeter wave signal:

  • Mechanical resonance. Molecules of air in the atmosphere naturally resonate (think of this as vibrating molecules) at millimeter wave frequencies, with the biggest natural interference coming at 24 GHz and 60 GHz.
  • Atmospheric absorption. The atmosphere naturally absorbs (or cancels out) millimeter waves. For example, oxygen absorption is highest at 60 GHz.
  • Millimeter waves are easily scattered. For example, the millimeter wave signal is roughly the same size as a raindrop, so rain will scatter the signal.
  • Brightness temperature. This refers to the phenomenon where millimeter waves absorb high frequency electromagnetic radiation whenever they interact with air or water molecules, and this degrades the signal.
  • Line-of-sight. Millimeter wave spectrum doesn’t pass through obstacles and will be stopped by leaves and almost everything else in the environment. This happens to some degree with all radio wavs, but at lower frequencies (with longer wavelengths) the signal can still get delivered by passing through or bouncing off objects in the environment (such as a neighboring house and still reach the receiver. However, millimeter waves are so short that they are unable to recover from collision with an object between the transmitter and receiver and thus the signal is lost upon collision with almost anything.

One interesting aspect of these spectrum is that the antennas used to transmit and receive millimeter wave spectrum are tiny and you can squeeze a dozen or more antenna into a square inch. One drawback of using millimeter wave spectrum for cellphones is that it takes a lot of power to operate multiple antennas, so this spectrum won’t be practical for cellphones until we get better batteries.

However, the primary drawback of small antennas is the small target area used to receive a signal. It doesn’t take a lot of spreading and dispersion of the signal to miss the receiver. For spectrum in the 30 GHz range the full signal strength (and maximum bandwidth achievable) to a receiver can only carry for about 300 feet. With greater distances the signal continues to spread and weaken, and the physics show that the maximum distance to get any decent bandwidth at 30 GHz is about 1,200 feet. It’s worth noting that a receiver at 1,200 feet is receiving significantly less data than one at a few hundred feet. With higher frequencies the distances are even less. For example, at 60 GHz the signal dies off after only 150 feet. At 100 GHz the signal dies off in 4 – 6 feet.

To sum all of this up, millimeter wave transmission requires a relatively open path without obstacles. Even in ideal conditions a pole-mounted 5G transmitter isn’t going to deliver decent bandwidth past about 1,200 feet, with the effective amount of bandwidth decreasing as the signal travels more than 300 feet. Higher frequencies mean even less distance. Millimeter waves will perform better in places with few obstacles (like trees) or where there is low humidity. Using millimeter wave spectrum presents a ton of challenges for cell phones – the short distances are a big limitation as well as the extra battery life needed to support extra antennas. Any carrier that talks about deploying millimeter wave in a way that doesn’t fit the basic physics is exaggerating their plans.

Is the Public Buying the 5G Hype?

T-Mobile recently conducted a survey, conducted by HarrisT, that looks in detail about how the public feels about the role of pending new technologies. They expect to repeat this survey quarterly to track how public perceptions of technology changes over time.

As you would expect, a significant number of the questions in the poll were about 5G. I’m sure that T-Mobile’s motivation for conducting the survey is due to the fact that they are one of the few companies in the industry that are not hyping 5G. They expect 5G to start creeping into the industry in 2020 and then taking as much as a decade to become a widespread reality.

The survey started by asking if respondents had heard of various new technologies. The 5G hype isn’t fully pervasive yet with 57% having heard of the technology. For other technologies: Internet of Things – 29%; machine learning – 26%; virtual reality – 83%; artificial intelligence – 78%; cloud computing – 52% and blockchain – 19%.

One of the most interesting responses in the survey is the public expectation of when they expect to see 5G in the market place. Of those that have heard of 5G, 29% thought it was already here in late 2018. 35% more think they’ll see 5G in 2019 and another 25% expect 5G in 2020. This response has to reflect the flood of marketing hype and press releases extolling 5G. The public has been inundated for several years by articles and press releases that declare that 5G is going to solve our broadband problems by delivering huge data speeds wirelessly everywhere.

When asked more specifics about 5G, 64% were somewhat excited or very excited about 5G in general. They were also somewhat or very excited about the following attributes of 5G: faster upload and download speeds – 92%; wider network coverage – 91%; higher quality streaming video – 85%; higher quality voice calls – 89%; less lag time on mobile devices – 90%; more reliable mobile connections – 93%; greater number of connected devices – 80%; smart city data sensors – 68%; driverless vehicles – 50%; virtual reality in the work environment – 59%; smart energy grids – 75%; supercharged IoT – 64%; expanded use of drones – 47%; next generation artificial intelligence – 59%; telehealth – 68%; remote surgery – 59%; real time language translation – 72%; replacement of landline broadband connections – 75%; replacement of traditional cable TV – 75%.

Interestingly, only 27% of total respondents thought that 5G would have a big influence on their daily life.

In a finding that I find disturbing, 65% of respondents think 5G will have a positive impact on rural America. Even the biggest 5G proponents admit that 5G is going to be hard to justify in low-density areas. It’s not hard to understand this belief because I’ve seen numerous articles that make this claim. 79% think 5G will have a positive impact in cities.

When asked which companies would be leaders in 5G, the unsurprising responses include Verizon (43%), AT&T (36%), Apple (43%), Samsung (35%) and T-Mobile (20%). However, there were surprises on this list including Amazon (24%), Comcast (12%), Google (36%), Facebook (12%), Microsoft (34%) and Dish Networks (5%).

The public believes that 5G is going to bring price increases. 84% said they thought that 5G would result in higher cellular service prices. 77% said they thought 5G would lead to higher cable TV prices (this has me scratching my head). 81% said they thought 5G would lead to higher process for home broadband – but wouldn’t increased competition for home broadband bring lower prices? 86% expect the prices for smart phones to be higher.

Overall, the survey shows an unrealistic public perception about when we’ll see the benefits of 5G. It’s not hard to understand this misperception since there are untold articles making it sound like we’re on the verge of a 5G revolution. I’m guessing this might have been one of the motivations for T-Mobile to sponsor this survey since they are one of the most realistic voices in the industry talking about the 5G time line. It will be interesting to see what the public thinks in a few years after very little 5G has actually been implemented. But perhaps I’m just being overly skeptical since the big carriers like AT&T are now extolling their 4G LTE product as 5G – maybe the public will but it.

AT&T is Not Launching Mobile 5G

AT&T recently took the next step in the 5G hype race by announcing that it is releasing the first mobile 5G device. The announcement was made at end of the year to cover past AT&T announcements that the company would launch mobile 5G in 2018. The company can now say that they beat Verizon and Sprint to the market.

The AT&T announcement is referring to the device they are calling a puck. It’s a small Netgear modem that is being touted as a 5G mobile hotspot. The puck is based upon at least a few aspects of the 3GPP NR standard, allowing AT&T to claim it’s 5G. AT&T has not been fully forthcoming about how the device works. Where available the device will supposedly grab bandwidth from AT&T’s 5G cellular network – but since the 5G network is mostly still imaginary, in most places it will grab signal from the existing 4G LTE network. Within a home the puck will transmit WiFi, just like any other WiFi router.

There is no real product here. For at least three months AT&T will be giving away the puck and service for free to selected users. After that they’ve said the pricing will be $499 for the puck plus $70 monthly for bandwidth with an incredibly stingy 15 GB data cap. My prediction is that this product never makes it to market because it’s hard to envision anybody in an urban area willing to pay $70 a month such a small amount of WiFi bandwidth. The only market for the puck is possibly a few early adapters with money to burn who want to be able to say they owned the first 5G devices.

This announcement sets a new low for 5G hype. What I found most disturbing is that dozens of news sites picked up the story and basically spit back the AT&T press release and called it news. Those dozens of articles give the public the impression that 5G mobile is right around the corner, which is exactly what AT&T intended – they want the public to equate 5G and the AT&T brand name together. To be fair, there are several industry articles that didn’t buy into the AT&T hype.

The AT&T announcement also made this sound like a breakthrough technology by implying that this will deliver faster cellular speeds. There is a lot needed before there is a faster 5G cellular network. First, AT&T would need to install 5G transmitters on residential streets, requiring them to build neighborhood fiber networks. For the puck to work with millimeter wave spectrum AT&T would need to put a small antenna on the outside of a home to receive the signal since millimeter wave bandwidth won’t pass through the walls of a home. A network that will deliver residential millimeter wave cellular bandwidth is nearly identical to a network that would deliver 5G fixed broadband.

AT&T is not taking any of those needed steps. In fact, AT&T’s CTO Andre Fuetsch spent the fall repeatedly taking potshots at Verizon’s 5G deployment, saying that Verizon is making a mistake chasing the ‘fixed’ 5G market.

To further deflate this announcement, AT&T’s CFO John Stephens recently told AT&T investors to not expect any 5G revenues in 2019. He admitted it will take many years until there are enough 5G phones in the market to make a noticeable difference in revenues. It seems the only cellular carrier being truthful about 5G is T-Mobile which says it will begin introducing some 5G characteristics into their cell sites starting in 2020.

The bottom line is that AT&T just announced the release of a WiFi router that works off their 4G LTE network, but which supposedly will incorporate at least some aspects of the 3GPP NR standard. The company isn’t planning to charge for the product and it’s hard to envision anybody buying hotspot bandwidth at the prices they announced. But AT&T got what they wanted, which was dozens of news articles declaring that AT&T was the first to market with mobile 5G. I bet a decade from now that’s exactly what the Wikipedia article on 5G will say – and that’s all AT&T was really shooting for.

Telecom Predictions for 2019

It’s that time of year when I look forward at what the next year might bring to the industry. I see the following as the biggest telecom trends for 2019:

5G Will Not Save the World (or the Industry). This will be the year when we will finally stop seeing headlines about how 5G will transform society. There will be almost no actual introduction of 5G in networks, but we’ll still see numerous press releases by the big ISPs crowing about fictional 5G achievements.

CAF II Buildout Nearly Complete, but Few Notice. The CAF II upgrades will not have the impact hoped for by the FCC. Many areas that should have gotten speed increases to at least 10/1 Mbps will get something less, but nobody will officially monitor or note it. Households that buy the upgrades to 10/1 will still feel massively underserved since those speeds are already seriously obsolete.

People Will Wonder Why They Bought 5G Cellphones and 802.11ax Routers. The wireless carriers will begin charging premium prices for 5G-capable cellular phone yet there will be no 5G cell sites deployed. Households will upgrade to 802.11ax WiFi routers without realizing that there are no compatible devices in the home. Both sets of customers will feel cheated since there will be zero improvement in performance. Yet we’ll still see a few articles raving about the performance of each technology.

FCC Will Continue to Work Themselves out of the Regulatory Business. The current FCC will continue on the path to deregulate the large carriers to the fullest extent possible. They will continue to slant every decision in the direction of the big ISPs while claiming that every decision helps rural broadband.

Rural America Will Realize that Nobody is Coming to Help. I predict that hundreds of rural communities will finally realize that nobody is bringing them broadband. I expect many more communities to begin offering money for public/private partnerships as they try desperately to not fall on the wrong side of the broadband divide.

Broadband Prices Start to Climb. 2019 will be the first year that the world will notice the big ISP strategy to significantly increase broadband prices. We saw the first indication in November when Charter increased bundled broadband prices by $5 per month – the biggest broadband price increase in my memory. All the big ISPs are hoping to have broadband prices to $90 within 5 – 7 years.

Corporate Lobbyists Will Drive Policy. In 2018 there were numerous FCC decisions that came straight from the pens of telecom lobbyists. In 2019 those lobbyists will drive state and federal telecom legislation and FCC decisions.

Comcast and Charter Continue to Eat into Cellular Market. These two cable companies will quietly, yet significantly begin eating into the cellular markets in urban areas. I still don’t expect a major reaction by the cellar companies, but by 2020 we should start seeing cellular prices take another tumble.

Household Bandwidth Usage Will Continue to Grow. There will be no slowdown in the growth of household broadband as homes add many more bandwidth-capable devices to their homes. Another few million customers will cut the cable TV cord and ratchet up bandwidth usage. Online programming will routinely first offer 4K video and we’ll see the first commercial 8K video online.

We’ll See First Significant Launches of LEO Satellites. There will be little public notice since the early market entries will not be selling rural broadband but will be supporting corporate WANs, cellular transport and the development of outer space networks between satellites.

25 New Online Programmers Emerge. There will be a flood of new online programming options as numerous companies jump into the market. We won’t see many, and possibly no failures this year, but within a few years the market reality will drive out companies that can’t gain enough market share.

Transport Price Pressure Tightens. Anybody selling transport to cellular companies will see big pressure to lower prices. Those who ignore the pressure will find out that the carriers are willing to build fiber to bypass high costs.

Big Companies Will Get Most New Spectrum. The biggest ISPs and cellular carriers will still gobble up the majority of new spectrum, meaning improved spectrum utilization for urban markets while rural America will see nearly zero benefits.

Private 5G Networks

One of the emerging uses for 5G is to create private 5G cellular networks for large businesses. The best candidates for 5G technology are businesses that need to connect and control a lot of devices or those that need the low latency promised by the 5G standards. This might include businesses like robotized factories, chemical plants, busy shipping ports and airports.

5G has some advantages over other technologies like WiFi, 4G LTE and Ethernet that makes it ideal for communications rich environments. Cellular network can replace the costly and bulky hard-wired networks needed for Ethernet. It’s not practical to wire an Ethernet network to the hordes of tiny IoT sensors that are needed to operate a modern manufacturing factory. It’s also not practical to have a hard-wired network in a dynamic environment where equipment needs to be moved for various purposes.

5G holds a number of advantages over WiFi and 4G. Frequency slicing means that just the right amount of bandwidth can be delivered to every device in the factory, from the smallest sensor to devices that must upload or download large amounts of data. The 5G standard also allows for setting priorities by device so that mission critical devices always get priority over background devices. The low latency on 5G means that there can be real time coordination and feedback between devices when that’s needed for time-critical manufacturing devices. 5G also offers the ability to communicate simultaneously with a huge number of devices, something that is not practical or possible with WiFi or LTE.

Any discussion of IoT in the past has generally evoked discussion of factories with huge number of tiny sensors that monitor and control every aspect of the manufacturing process. While there have been big strides in developing robotized factories, that concept of a concentrated communications mesh to control the factories has not been possible until the 5G standard.

We are a few years away from having 5G networks that can deliver on all of the promised benefits of the standard. The big telecom manufacturers like Ericsson, Huawei, Qualcomm and Nokia along with numerous smaller companies are working on perfecting the technology and the devices that will support advanced IoT networks.

I read that an Audi plant in Germany is already experimenting with a private cellular network to control the robots that glue car components together. Its robot networks were hard-wired and were not providing fast enough feedback to the robots for the needed precision of the tasks. The company says it’s pleased with the performance so far. However, that test was not yet real 5G and any real use of 5G in factories is still a few years off as manufacturers perfect the wireless technology and perfect the sensor networks.

Probably the biggest challenge in the US will be finding the spectrum to make this work. In the US most of the spectrum that is best suited to operating a 5G factory are sold in huge geographic footprints and the spectrum will be owned by the typical large spectrum holders. Large factory owners might agree to lease spectrum from the large carriers, but they are not going to want those carriers to insert themselves into the design or operation of these complex networks.

In Europe there are already discussions at the various regulatory bodies on possibly setting aside spectrum for factories and other large private users. However, in this country to do so means opening the door to allowing the spectrum to be sold for smaller footprints – something the large wireless carriers would surely challenge. It would be somewhat ironic if the US takes the lead in developing 5G technology but then can’t make it work in factories due to our spectrum allocation policies.

Femtocells Instead of Small Cells?

I have just seen the future of broadband and it does not consist of building millions of small 5G cell sites on poles. CableLabs has developed a femtocell technology that might already have made the outdoor 5G small cell site technology obsolete. Femtocells have been around for many years and have been deployed in rural areas to provide a connection to the cellular network through a landline broadband connection. That need has largely evaporated due the ability to use cellphones apps to directly make WiFi calls.

The concept of a femtocell is simple – it’s a small box that uses cellular frequencies to communicate with cellular devices that then hands-off calls to a landline data connection. Functionally a femtocell is a tiny cell site that can handle a relatively small volume of cellular calls simultaneously.

According to CableLabs, deploying a femtocell inside a household is far more efficient that trying to communicate with the household from a nearby pole-mounted transmitter. Femtocells eliminate one of the biggest weaknesses of outdoor small cell sites – much of the power of 5G is lost in passing through the external walls of a home. Deploying the cellular signal from within the house means a much stronger 5G signal throughout a home, allowing for more robust 5G applications.

This creates what I think is the ultimate broadband network – one that combines the advantages of a powerful landline data pipe combined with both 5G and WiFi wireless delivery within a home. This is the vision I’ve had for over a decade as the ultimate network – big landline data pipe last mile and powerful wireless networks for connecting to devices.

It’s fairly obvious that a hybrid femtocell / WiFi network has a huge cost advantage over the deployment of outdoor small cell sites on poles. It would eliminate the need for the expensive pole-mounted transmitters – and that would eliminate the battles we’re having about the proliferation of wireless devices. It’s also more efficient to deploy a femtocell network – you would deploy only to those homes that want to the 5G features – meaning you don’t waste an expensive outdoor network to get to one or two customers. It’s not hard to picture an integrated box that has both a WiFi modem and a cellular femtocell, meaning the cost to get 5G into the home would be a relatively cheap upgrade to WiFi routers rather than deploying a whole new separate 5G network.

There are significant benefits for a home to operate both 5G and WiFi. Each standard has advantages in certain situations within the home. As much as we love WiFi, it has big inherent weaknesses.  WiFi networks bogs down, by definition, when there too many devices calling for a connection. Shuttling some devices in the home to 5G would reduce WiFi collisions and makes WiFi better.

5G also has inherent advantages. An in-home 5G network could use frequency slicing to deliver exactly the right amount of bandwidth to devices. It’s not hard to picture a network where 5G is used to communicate with cellphones and small sensors of various types while WiFi is reserved for communicating with large bandwidth devices like TVs and computers.

One huge advantage of a femtocell network is that it could be deployed anywhere. The cellular companies are likely to cherry pick the outdoor 5G network deployments only to neighborhoods where the cost of backhaul is affordable – meaning that many neighborhoods will never get 5G just like many neighborhoods in the northeast never got Verizon FiOS. You could deploy a hybrid femtocell to one customer on a block and still be profitable. Femtocells also eliminate the problems of homes that won’t have line-of-sight to a pole-mounted network.

This technology obviously favors those who have built fast broadband – that’s cable companies that have upgraded to DOCSIS 3.1 and fiber overbuilders. For those businesses this is an exciting new product and another new revenue stream to help replace shrinking cable TV and telephone networks.

One issue that would need to be solved is spectrum, since most of it is licensed to cellular companies. The big cable companies now own some spectrum, but smaller cable companies and fiber overbuilders own none. There is no particular reason why 5G inside a home couldn’t coexist with WiFi, with both using unlicensed spectrum, with some channels dedicated to each wireless technology. That would become even easier if the FCC goes through with plans to release 6 GHz spectrum as the next unlicensed band. The femtocell network could also utilize unlicensed millimeter wave frequency.

We’ll obviously continue to need outdoor cellular networks to accommodate roaming voice and data roaming, but these are already in place today. Rather than spend tens of billions to upgrade those networks for 5G data to homes, far less expensive upgrades can be made to augment those networks only where needed rather than putting multiple small cells on every city block.

It’s been my experience over forty years of watching the industry that in the long run the most efficient technology usually wins. If CableLabs develops the right home boxes for this technology, then the cable companies will be able blitz the market with 5G much faster, and for a far lower cost than Verizon or AT&T.

It would be ironic if the best 5G solution also happens to need the fastest pipe into the home. The decisions by big telcos to not deploy fiber over the last few decades might start looking like a huge tactical blunder. It looks to me like CableLabs and the cable companies might have found the winning 5G solution for residential service.

Our National Telecom Priorities

I recently wrote a blog that talked about the FCC’s formal goals for the next few years. I noted in that blog that some of the FCC’s actions currently seem to conflict with their stated goals. Today I present my take on what I see as the actual current priorities in our industry.

5G, 5G, 5G. The FCC and other policy makers have swallowed the 5G hype hook, line and sinker. I have no doubt that 5G will be an important part of our future telecom landscape, but the hype seems way out of proportion to the reality we are likely to see. Nothing highlights this better than a Qualcomm-sponsored article that claims that 5G technology will be as important as the introduction of electricity.

The FCC is sweeping away regulations that might interfere with 5G and already killed local say over the location of small cell electronics and towers. The FCC is well on the way towards allocating massive amounts of spectrum for 5G and ignoring other spectrum needs. The White House even held a 5G summit where politicians were repeating the talking points of the 5G carriers.

This all seems premature since engineers all say that the major benefits of mature 5G will come years from now. There will be some early 5G technology introduced into the market over the next few years, but this will not include the characteristics that make 5G an important technology. From a policy perspective, 5G seems to have won the war without having had to fight any of the battles. I’ve never seen this industry (and the politicians) go so gaga over a new technology that we aren’t even going to see for a while. The marketers at the cellular companies have clearly hit a hype home run.

The Rural Digital Divide Gets Lip Service. Talking about solving the rural digital divide is a high priority. The FCC rarely makes a presentation without mentioning how important this is to them. However, the FCC and others in Washington DC are doing almost nothing to solve the problem. The FCC even went so far as to list the rural digital divide as the first priority on their own list of goals but has done little to address the problem.

There is universal acknowledgement that the private sector is not going to invest in rural broadband without some funding help from government. Yet all of the state and federal grant programs added together are throwing millions of dollars at a problem that needs many billions of dollars to solve.

Meanwhile, the rural digital divide is widening as urban areas are seeing significantly faster broadband speeds while rural America is stuck with little or no broadband.

The Big ISPs Want to be Google. Every one of the big ISPs has made investments to try to catch-up with Google. The big ISPs want to monetize their vast troves of customer data. Big ISPs are envious of the advertising money made by Google and Facebook and want to grab a piece of those dollars. The FCC has aided the big companies by weakening consumer privacy protections.

But for whatever reason, the big ISPs haven’t yet figured this out. They have the most intimate and detailed access to customer data but have scarcely found any ways to understand it, yet alone monetize it.

Take My Residential Customers, Please. The big telcos have made it clear that they are not particularly interested in the residential market. CenturyLink made it clear this year that they will no longer invest in residential networks. Verizon has already sold vast tracts of rural networks. AT&T is constantly petitioning the FCC to let them tear down rural copper. Verizon is talking about expanding wireless local loops using 5G, but we’ll have to wait to see how serious they are about it.

Big ISPs Continue to Try to Squash Competition. The big ISPs miss no opportunity to squash competition, no matter how small. They all still rail against municipal competition, although all such competition added together is barely a blip on the national radar. They still pay for hit pieces – articles and papers that blast municipal fiber networks – even ones like Chattanooga EPB that is a paragon of competitiveness. They have been working hard to kick CLECs off of their dying copper networks, even thought the CLECs have been investing in newer DSL that can deliver decent broadband over the copper.

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.