Be Wary of 5G Hardware

We’ve now entered the period of 5G competition where the wireless carriers are trying to outdo each other in announcing 5G rollouts. If you believe the announcements, you’d think 5G is soon going to be everywhere. Device manufacturers are joining the fray and are advertising devices that can be used with the early carrier 5G products. Buyers beware – because most of what the cellular companies and the manufacturers are hyping as 5G is not yet 5G. Any first generation hardware you buy today will become quickly obsolete as future 5G upgrades are introduced.

5G Cellular. Cellular carriers are introducing two new spectrum bands – CBRS spectrum and millimeter wave spectrum – as 5G. The actual use of these spectrums is not yet technically 5G because the carriers aren’t yet using much of the 5G specifications. These two specific spectrum bands come with another warning in that they are only being used to produce faster outdoor broadband. Customers who live in places where they can receive the new frequencies, and who compute outdoors might see value in paying extra for the devices and the 5G data plans. Most people are not going to find any value in what these plans offer and should not get sucked into paying for something they can’t get or won’t use.

Cellphone manufacturers are already starting to build the CBRS spectrum into high-end phones. By next year there should be a 5G version of every major cellphone – at a premium price. Within a few years this will be built into every phone, but for now, expect to pay extra.

The question that users need to ask is if faster cellphone data is worth the extra hardware cost and worth the extra monthly fee that will be charged for 5G browsing. I’ve thought about the cellphone functions that would be improved with faster broadband and the only one I can come up with is faster downloads of movies or software. Faster broadband is not going to make web browsing any faster on a cellphone. Cellphones have been optimized for graphics, which is why you can scroll easily through a Google map or can flip easily between videos on social media. The trade-off for faster graphics is that cellphones aren’t good at other things. Cellphones crawl when trying to process non-cellular websites or when trying to handle spreadsheets. Faster broadband is not going to make these functions any faster, because the slowness comes from the intrinsic design of the cellphone operating software and can’t be improved with faster broadband.

I also think customers are going to face a huge challenge in getting a straight answer about when CBRS spectrum or millimeter wave spectrum will be available in their local neighborhood. The carriers are in full 5G marketing mode and are declaring whole metropolitan areas to have 5G even if that only means new spectrum is in a few neighborhoods.

Finally, beware that both of these spectrums only work outdoors. And that means on foot, not in cars. Millimeter wave spectrum is likely to always be a gimmick. Folks testing the spectrum today report that they can lose the connection simply by rotating their phone slightly or by putting their body in the path from the transmitter. CBRS spectrum will be much more well-behaved.

Laptops.  Lenovo has already announced a 5G-capable laptop coming in 2020 and others will surely jump on the bandwagon soon. The big issue with laptops is also an issue with cellphones. It might be reasonable in an area with good CBRS spectrum coverage to get a 100 Mbps or faster cellular connection. This is going to tempt a user to use a laptopas if it was on a home broadband connection. However, this is still going to be cellular data supplied on a cellular data plan. Unless the carriers decide to lift data caps, a customer using a CBRS spectrum laptop might find themselves exhausting their monthly data cap in a day or two. It’s also worth repeating that these are outdoor spectrums, and so only students or others who regularly use computers outdoors a lot are going to find this spectrum potentially useful.

5G Hotspots. A 5G hotspot is one that broadcasts bandwidth in millimeter wave spectrum. Sprint is already marketing such a hot spot. This takes us back to the early days of WiFi when we needed a dongle to use WiFi since the spectrum wasn’t built into desktops or laptops. A 5G hotspot will have that same restriction. One of the primary reasons to consider a millimeer wave hotspot is security. It will be much harder to hack a millimter wave connection than a WiFi connection. But don’t select the millimeter wave hot spot for speed because a millimeter wave connection won’t be any faster than the WiFi 6 routers just hitting the market.

In future years, 5G hotspots might make sense as millimeter wave spectrum is built into more devices. One of the biggest advantages of indoor millimeter wave spectrum is to avoid some of the interference issues inherent in WiFi. I picture the ideal future indoor network to be millimeter wave spectrum used to provide bandwidth to devices like computers and TVs while WiFi 6 is used for everything else. There is likely to be an interesting battle coming in a few years between millimeter wave and WiFi 6 routers. WiFi already has a huge advantage in that battle since the WiFi technology will be included in a lot more devices. For now there won’t be many easy ways to use a 5G millimeter wave hotspot.

The Market Uses for CBRS Spectrum

Spencer Kurn, an analyst for New Street Research recently reported on how various market players plan to use the 3.5 GHz CBRS spectrum recently approved by the FCC. I described the FCC’s order in this recent blog. As a quick refresher, this is a large swath of spectrum and the FCC has approved 80 MHz of spectrum for public use and will be auctioning 70 MHz of the spectrum in 2020.

Cellular Bandwidth. Kurn notes that Verizon plans to use the new spectrum to beef up 4G bandwidth now and eventually 5G. Verizon plans to use the spectrum in dense markets and mostly outdoors. Cable companies like Comcast and Charter that have entered the wireless business are also likely to use the spectrum in this manner.

I’ve been writing for a while about the crisis faced by cellular network. In urban areas they are seeing broadband usage double almost every two years and keeping up with that growth is a huge challenge. It’s going to require the combination of new spectrum, more cell sites (mostly small cells), and the improvements that come with 5G, mostly the frequency slicing.

It’s interesting that Verizon only sees this as an outdoor solution, but that makes sense because this spectrum is close in characteristics as the existing WiFi bands and will lose most of its strength in passing through a wall. It also makes sense that Verizon will only do this in metro areas where there is enough outdoor traffic for the spectrum to make a difference. I’ve seen several studies that say that the vast majority of cellular usage is done indoors in homes, businesses, and schools. But this spectrum still becomes one more piece of the solution to help relieve the pressure on urban cell sites.

For this to be of use the spectrum has to be built into cellular handsets. Apple recently announced that they are building the ability to receive Band 48 of CBRS into their new models. They join the Samsung Galaxy S10 and the Google Pixel 3 with the ability to use the spectrum. Over time it’s likely to be built into many phones, although handset manufacturers are always cautious because adding new spectrum bands to a handset increases the draw on the batteries.

Point-to-Multipoint Broadband. Numerous WISPs and other rural ISPs have been lobbying for the use of the spectrum since it can beef up point-to-multipoint broadband networks. These are networks that put a transmitter on a tower and then beam broadband to a dish on a subscriber premise. This technology is already widely in use mostly using the 2.4 GHz and 5.0 GHz WiFi spectrum. Layering on CBRS will beef up the broadband that can be delivered over a customer link.

It will be interesting to see how that works in a crowded competitive environment. I am aware of counties today where there are half a dozen WISPs all using WiFi spectrum and the interference degrades network performance for everybody. There are five SAS Administrators named by the FCC that will monitor bandwidth usage and who also will monitor interference. The FCC rules don’t allow for indiscriminate deployment of public CBRS spectrum and we’ll have to see how interference problems are dealt with.

One interesting player in the space will be AT&T who intends to layer the frequency onto their fixed wireless product. AT&T widely used the technology to meet their CAF II buildout requirements and mostly has used PCS spectrum to meet the FCC requirement to deliver at least 10/1 Mbps speeds to customers. Adding the new spectrum should significantly increase rural customer speeds – at least for those with a few miles of AT&T towers.

Cable Company Edge-out. The most interesting new players considering the market are the cable companies. Kurn believes that the big cable companies will use the spectrum to edge out to serve rural customers with fixed wireless around their existing cable networks. He says the cable networks could theoretically pass 6 – 7 million new homes if this is deployed everywhere. This is an ideal application for a cable company because they typically have fiber fairly close the edge of their service areas. The point-to-point wireless product operates best when the radios are fiber-fed and cable companies could deliver a product in the 50-100 Mbps range where they have line-of-sight to customers.

We’ve already seen one cable company tackle this business plan. Midco was awarded $38.9 million in the CAF II reverse auctions to deploy 100 Mbps broadband in Minnesota and the Dakotas. Midco is going to need this spectrum, and probably even more to deliver 100 Mbps to every customer. Their deployment is not really an edge-out, and the company plans to build networks that will cover entire rural counties with fixed wireless broadband.