Can 5G Replace WiFi?

Verizon recently posted a webcast with investors where Ronan Dunne, EVP and CEO of the Verizon Consumer Group said that he believed that 5G hotspots using millimeter wave spectrum will eventually displace WiFi in homes.

He cites major benefits of 5G over WiFi. He believes that a 5G network will be more reliable and more secure. He thinks that people will value the safety that comes from having traffic inside their home being encrypted as it rides Verizon’s 5G network compared to the more public nature of WiFi where every neighbor can see a home’s WiFi network.

He also cites the convenience of being able to transfer 5G traffic between networks. He paints a picture where a customer making a call or watching a video using a home 5G hotspot will be able to walk out the door and seamlessly continue the session outside on their cellphone. That’s pretty slick stuff should that ever come to pass.

The picture he’s painting for Verizon investors is a future where homes buy a Verizon 5G subscription to use in place of WiFi. This is part of Verizon’s ongoing effort to find a business case for 5G. His vision of the future is possible, but there are a lot of hurdles for Verizon to overcome to achieve that vision.

It’s going to get harder to compete with WiFi since the technology is getting a lot better with two major upgrades. First, the industry has introduced WiFi 6, which brings higher quality performance, lower latency, and faster data rates. WiFi 6 will use techniques like improved beamforming to greatly reduce interference between WiFi uses within the home.

Even more importantly, WiFi will be incorporating the new 6 GHz spectrum band that will increase bandwidth capabilities by adding seven 160 MHz bands and fourteen 80 MHz bands. It will be much easier to put home devices on separate channels when these new channels are added to the existing channels available on 2.4 and 5 GHz. This means that 5G will be competing against a much improved WiFi compared to the technology we all use today.

Another big hurdle for Verizon to overcome is that WiFi is ubiquitous today. WiFi is built into a huge number of devices, and a homeowner might already own a dozen or more devices capable of using WiFi. Verizon will have to somehow convince homeowners that 5G is so superior that it’s worth replacing the panoply of WiFi devices.

Another hurdle is that there is going to be WiFi vendors painting almost the same picture as Verizon. The makers of WiFi routers are already envisioning future devices that will introduce millimeter-wave spectrum including 5G into the home. There are vendors already working on devices that will provide both WiFi 6 and 5G using millimeter-wave connections simultaneously, using the publicly available 60 GHz V band. These solutions envision offering everything that Verizon can do, except the ability to roam seamlessly in and out of a home – and it will be done by selling a box instead of a new monthly subscription.

Another interesting hurdle to switching home networks to 5G is that there might be separate 5G solutions for each cellular carrier that uses different bands of spectrum. It’s relatively easy for device makers today to build a cellphone or other device that can use different cellular carriers because the carriers all use similar spectrum. But as each cellular company picks a different mix of frequencies moving forward, there is likely going to be cellphones and other devices that are specific to one carrier. It’s impossible to build a cellphone with today’s battery technology that can receive a huge range of spectrums – the multiple antenna systems would drain a cellphone dry in no time.

The largest hurdle of all is that WiFi is free to use after buying a WiFi router or meshed WiFi devices for the home. There is no monthly subscription fee to use the wireless WiFi connections within the home. Verizon clearly foresees a world where every home has a new monthly subscription to use its in-home 5G network.

Mr. Dunne makes one good point. It’s becoming increasingly clear that public WiFi networks are susceptible to hacking. A 5G network controlled by a carrier should be a lot safer than a WiFi hotspot managed by a coffee shop. The big question is if this enough incentive for people to buy 5G-capable devices or for coffee shops to switch to 5G networks. Even should coffee shops go with a 5G solution, will homes follow suit?

Mr. Dunne vision has an underlying assumption that people will value data security enough to be willing to pay more for it. He envisions people choosing a managed network when they have a choice. He could be right, and perhaps there will be enough data breaches in coming years with WiFi that the paradigm will change from WiFi to 5G. But it’s going to be incredibly hard to dislodge WiFi, particularly when it’s evolving and improving along with 5G.

Even if Mr. Dunne is right, this shift is not coming soon, probably not within this decade. For now, WiFi has won the device war and any shift to 5G would drag out over many years. It’s going to be incredibly difficult for the cellular carriers to convince everybody to switch to 5G.

I sympathize with Mr. Dunne’s dilemma. Investors want to understand where the revenues will come from to fund the expensive upgrades to 5G. Verizon and the other cellular carriers have tossed out a lot of ideas, but so far none of them have stuck to the wall.  Investors are getting rightfully nervous since there doesn’t appear to be any significant 5G revenues coming in the next few years. The carriers keep painting pictures of an amazing 5G future as a way to not have to talk about lack of 5G revenues today.

FCC Proposes New WiFi Spectrum

At their recent open meeting the FCC announced that it is proposing to use up to 1,200 megahertz of the spectrum band between 5.925 GHz and 7.125 GHz (being referred to as the 6 GHz band) as unlicensed spectrum. This is a bold proposal and more than doubles the total amount of bandwidth that would be available for WiFi.

However, their proposal comes with several proposed caveats that will have to be considered before expecting the spectrum to be useful everywhere for rural broadband. First, the FCC proposal is that any place where the spectrum is currently being used for Broadcast Auxiliary Service and Cable TV Relay service that the spectrum only be licensed for indoor use.

In those places where the spectrum is being used heavily for point-to-point microwave service, the outdoor use would have to be coordinated with existing users by use of an automated frequency coordination system, or a database, that would ensure no interference. I assume one of the rules that must be clarified is a definition of what constitutes ‘heavy’ existing point-to-point use of the spectrum.

In places where there are no existing uses of the spectrum it sounds like it would be available for outdoor use as well as indoor use.

This band of spectrum would be a great addition to networks that provide point-to-multipoint fixed wireless service. The spectrum will have a slightly smaller effective delivery area than the 5.8 GHz WiFi ISM band now widely in use. The 5.8 GHz spectrum is already the workhorse in most fixed wireless networks and adding additional spectrum would increase the bandwidth that can be delivered to a given customer in systems that can combine spectrum from various frequencies.

The key is going to be to find out what the two restrictions mean in the real world and how many places are going to have partial or total restrictions of the spectrum. Hopefully the FCC will produce maps or databases that document the areas they think are restricted using their two proposed criteria.

This spectrum would also be welcome indoors and would add more channels for home WiFi routers, making it easier to cover a home and provide coverage to greater numbers of devices simultaneously. The FCC hopes the spectrum can be used everywhere for indoor use, but they are asking the industry if that causes any problems.

Note that this is not an order, but a proposal. The FCC released a draft of the Notice of Proposed Rulemaking on October 2, and after this vote they should soon publish a schedule for a public comment period from the industry and other interested parties.

WiFi has been a gigantic boon to the economy and it’s a great move by the FCC to provide additional WiFi spectrum, even if this turns out to be largely restricted to indoor use. However, everybody associated with rural broadband is going to hope this is decided soon and that the frequency is added to the toolbox for serving fixed wireless in rural areas.

Interestingly, this spectrum would make it easier for ISPs that claimed they can achieve universal 100 Mbps speeds for fixed wireless in the recent reverse CAF II auctions. Perhaps some of those companies were counting on this spectrum as a way to meet that claim.

It’s always hard to predict the speed of the FCC process. I see that various WiFi-related organizations are hoping this means use of the spectrum as early as sometime next year. However, we’ve often seen the FCC proceed a lot slower than what the industry wants and one of factors the FCC is going to take into consideration is the pushback from cellular companies that will likely want this to be licensed spectrum. Unfortunately, the large cellular companies seem to be getting everything on their wish list from this FCC, so we’ll have to see how that plays out.

I imagine that device manufacturers are already considering this in the design of new hardware, but still need to know more before finalizing software. This is perhaps the best announcement so far from this FCC. The benefit to the country from WiFi is gigantic and this will vastly strengthen the advantages of WiFi.