Finding a Business Case for 5G

We are now more than a year into what the carriers are labeling as 5G. If you read this blog regularly you know by now that I don’t think we’ve seen any 5G yet – what has been introduced so far is new spectrum. A new band of spectrum can improve broadband performance in crowded markets, and so the carriers are getting some praise for this development. But these new spectrum bands are operating as 4G LTE and are not yet 5G.

However, we’re getting closer to 5G. Within another few years we will start to see some of the innovations contained in the 5G standards hit the market. This won’t be spectacular at first. Remember that the carrier’s primary short-term goal for 5G is to improve the capacity of cellular networks to get ahead of the exploding demand curve. Cellular data traffic is growing at an astronomical 36% annually and that is stressing cellular networks to keep up with demand. 5G is part of a 3-prong approach to increase capacity – introducing small cells, introducing new spectrum, and finally introducing 5G features. These three changes ought to brace cellular networks for another decade, although eventually, the networks will hit a wall again if growth stays on the current growth curve.

Over the last two and three years, the cellular carriers and the press were full of stories of the wonderful ways that 5G would transform our world. AT&T, Verizon, and T-Mobile spun stories about having gigabit cellular, having fleets of self-driving cars, and having big broadband with us wherever we go. You may not have noticed, but those stories have disappeared. The carriers are not talking much about 5G capabilities other than faster speeds. They are no longer trying to soothe investors with stories of huge future 5G revenue streams.

I think the reason for this is that cellular carriers don’t have any grand visions of future 5G revenues. They still have not built a business case for 5G that justifies the cost of deploying dense networks of small cells.  Consider some of the ideas that were highly touted just a year or two ago.

Millimeter wave spectrum that can deliver gigabit broadband speeds is likely to remain a novelty. The carriers have introduced this in downtown urban neighborhoods to produce a marketing wow factors with TV commercials showing broadband speeds faster than a gigabit. But millimeter wave networks only work outdoors., and even that is funky since everything including a customer’s body can block the signal. There is no business case for spending the money for dense fiber-fed networks since cellphones are not designed for big bandwidth applications. Urban 4G is already pretty good, and there is no benefit other than bragging rights for a customer to shell out extra money for a millimeter wave phone and data plan.

There was talk for a while that 5G would displace WiFi inside homes and businesses. The idea was that 5G could do a better job of keeping data private while also bringing blazing speeds. However, the FCC has approved new WiFi spectrum that when coupled with WiFi 6 technology promises a magnitude improvement in WiFi performance. Once people start using the new WiFi there is going to be little interest in paying a monthly subscription for something that can be done well with off-the-shelf routers.

There still is talk about using 5G in medicine, touting things like the ability of surgeons to perform remote surgery. But is that ever really going to be a thing? It’s taken fifteen years and the COVID-19 crisis to get doctors to finally try telemedicine. There can’t be many doctors ready to tackle performing surgery in another city using robots. It’s also hard to think that insurance companies are going to support surgery that could go off the rails due to a fiber cut or electronics failure. 5G has also been touted as making it easier to monitor patients away from hospitals. But that’s a small bandwidth application that can be handled fine with the ever-improving 4G LTE.

There has been the hope of using 5G technology to help automate factories, and that sounds like a legitimate use of 5G. Factories that need high-precision and low latency are perfect for 5G. This will avoid any interference issues that might come with WiFi. But are there going to be enough new factories using this technology to move the financial bottom line of AT&T or Verizon?

For several years there was a story spun about how self-driving vehicles would communicate with the cloud using 5G. This never made any sense because for this to work there would have to be a dense cellular network built along every road. If the fleets of self-driving cars are developed before the 5G network, they’ll find a solution other than 5G. There also came the ugly realization that networks crash and the image of all the cars coming to a halt in a city because of a broadband outage means this may never become a reality.

Finally, there was talk of how 5G would free people from the monopoly power of the cable companies for broadband. People could have their entertainment with them at all times everywhere. However, most people are smart enough to know that the big cellular companies are also ugly monopolies. They have been engaging in bad behavior such as selling customer location data, even after being told by the FTC to stop the practice. The cellular companies are not going to win an argument that they have the moral high ground.

I have been trying to figure out the 5G revenue stream for several years and I’m no closer to it today than I was three years ago. Some people are willing to pay extra money to get faster cellular broadband speeds, but most customers think they are already paying for this in their cellular subscription. If Dish is successful in launching a new 5G network, the price pressure for 5G will likely be downward rather than increasing. The cellular carriers are going to introduce 5G even without new revenue streams because it’s the only way to keep their networks from crashing in a few years. But what they do after that is still a mystery to me.

 

Just a quick personal note. I’ve now published 1,800 blogs since I started in March 2013. That’s about 1,600 more than I thought I would be able to do. I tell myself once in a while that I’ll stop writing this blog when I run out of topics – but that doesn’t seem like it will be happening any time soon. I thank those of you who have been reading my musings. Onward to 1,800 more!

The 5G Experience in 2020

The cellular carriers are in full 5G marketing mode. If you believe the TV commercials, you’d now think that the country is blanketed by 5G, as each cellular carrier claims a bigger coverage area than their competitors. However, almost all of their claims are marketing hype. What’s the reality of 5G coverage in 2020?

What does it mean when the carriers claim wide coverage of 5G? In 2020 there will be no cellular deployment that can be legitimately called 5G. Full 5G will not arrive until the carriers have implemented the bulk of the new features described in the 5G specifications. For now, none of the important features of 5G have been developed and introduced into the market. 5G deployment will come in stages as each of the 5G features reaches markets – the same thing that happened to 4G. For now, all of the major 5G improvements are still under development in the labs.

Then what are the carriers calling 5G? Most of what is being called 5G is the introduction of new bands of spectrum. New spectrum does not equal 5G – the 5G experience only comes with 5G features. Existing cellphones cannot receive the new spectrum bands, and so the carriers are selling new phones that can receive the new spectrum and labeling that as 5G.

What does the new spectrum mean for cellular performance? At first, anybody lucky enough to grab new spectrum will likely have a great experience. This will mostly be because almost nobody else is using the spectrum at a given cell site. We will see some early claims of blazingly fast speeds that will fade away over time. As more phones can use the new spectrum, the performance will drop back to normal 4G speeds – and maybe even a little slower. Much of the first wave of spectrum being released is in lower frequency bands such as 600 MHz for T-Mobile and 850 MHz for AT&T. These lower frequency bands don’t carry as much data as higher frequencies, and in the long-run these lower frequencies will be used to bolster voice traffic.

Why are the carriers claiming widespread 5G? I can only guess that carriers have gotten so caught up in 5G hype that they feel compelled to show something new to the market. The carriers don’t like to talk about it, but their 4G networks are in big trouble in urban areas. The amount of cellular data being used by customers is doubling every two years. You don’t have to be a network engineer to understand that continuous doubling of traffic can quickly swamp any network and degrade performance. Most of the carrier activity in 2020 is aimed at propping up the 4G networks until 5G is a mature technology.

When will we see 5G features? From what I read in the IEEE forums, most of the 5G features are 2 – 5 years away. The same thing happened with 4G and it took most of a decade to see 4G fully implemented – in fact, the first US cell site fully meeting the 4G standards was not activated until late 2018. Over time we’ll see a new 5G features implemented as they are released from labs to field. New features will only be available to those that have phones that can use them, so there will be a 2 to 3-year lag until there are enough phones in the market capable of using a given new feature. This means every 5G phone will be out of date as soon as a new 5G feature is released.

What about millimeter wave spectrum – is that 5G? No, it’s just another new frequency band. The characteristics of millimeter wave spectrum are so different from traditional cellular frequencies that it’s even hard to call this a cellular frequency. The frequency is 10-30 times faster than traditional cellular frequency. It only travels short distances, mostly under 1,000 feet from a cell site. It needs line-of-sight and can be easily blocked by any impediment in the environment. It’s not going to pass from outdoor transmitters into buildings. It’s easier to understand millimeter wave spectrum if you think of it as a broadband hotspot that is mounted outside, and which can be received by special phones designed to use the frequency.

Does all of this mean a better cellular experience in 2020? It will for some people. Those who buy new phones that can receive the new frequency bands, and who live or work within two miles of an upgraded cell site will likely see improved performance – no drastically so, but a little better. Anybody who wants blazing data speeds on a cellphone and who lives or works in the urban city centers might be able to get outdoor broadband from millimeter wave hotspots. The rest of us are going to see a gradual degradation of our 4G experience as existing cell sites grow busier. This means more dropped calls, fewer bars. Until the cellular carriers have deployed a lot of small sites and started to implement the 5G features our cellular experience is likely to get worse before it gets better.

Finally, what about rural America in 2020? It’s going to still be more likely for a rural caller to snag a 3G connection than a 5G one using the new frequencies. The FCC figured out last year that the cellular carriers had greatly exaggerated their rural 4G coverage areas – something that is not news to rural residents. Rural cell sites aren’t under the same stress as urban ones due to fewer customers trying to use a given cell site, so calling should remain the same this year. There is hope over the next 2-4 years to see money from the FCC’s 5G Fund bring better 4G coverage to rural areas. True 5G features will make little noticeable difference in rural America for many years to come.

The Government’s Role in 5G

It’s been really interesting to watch how much the federal government talks about 5G technology. I’ve not seen anything else like this in my adult lifetime, although there may have been times in the past, such as the advent of railroads or electricity that the federal government took such an active interest in new technology.

The government gets involved to some extent in many new technologies, but with 5G there has been a steady and persistent dialog about how 5G is vital to our economic future, and pronouncements of why we must implement 5G as quickly as possible to stay ahead of the rest of the world. As I’ve watched the way the government talks about 5G, it makes me wonder why we never heard the same urgency for breakthroughs like personal computers, the world wide web, or understanding the human genome.

A good example of what I’m talking about came in November when a bipartisan group of senators sent a letter to Robert O’Brien, the current national security advisor asking for a better government strategy for 5G. They claimed they are concerned that China is winning the 5G war, which they believe creates a security threat for the US.

I’ve been hearing about the 5G war for a few years now and I still don’t know what it means. 5G is ultimately a broadband technology. I can’t figure out how the US is harmed if China gets better broadband. If there is now a 5G war, then why hasn’t there been a fiber-to-the-home war? I saw recently where China passed us in the number of last-mile fiber connections, and there wasn’t a peep about it out of Congress.

The market reality of 5G looks a lot different than the rhetoric from the politicians. Cellular carriers worldwide are crowing about 5G deployment, yet those deployments contain none of the key technology that defines 5G performance. There is no frequency slicing. There is no bonding together of multiple frequencies to create larger data pipes. There is no massive expansion of the number of connections that can be made at a website. Cellphones can’t yet connect to multiple cell sites. What we have instead, for now, are new frequencies layered on top of 4G LTE.

New frequency does not equal 5G. The millimeter wave spectrum is faster in the handful of neighborhoods where people can go outside in the winter to use it. The carriers admit that the 600 MHz and the850 MHz spectrum being deployed won’t result in faster speeds than 4G LTE.

AT&T recently announced a significant cut in its capital budget for 2020 – something that is hard to imagine if there is an urgent need to deploy 5G faster than the Chinese. The reality is that the big cellular companies are struggling to find a business case for 5G. They are starting to realize that a lot of people aren’t willing to pay more for faster cellular data. Some of their other big uses for 5G such as using it for self-driving cars, or for supplanting WiFi as the technology to handle IoT devices are still years into the future and may never come to fruition.

The other Washington DC talking point is that 5G networks will be 100 times faster than today’s cellular data. That may be true in the tiny downtown urban areas that get saturated with outdoor millimeter wave broadband. I have a hard time thinking this is anything more than a gimmick that will never become widespread. A dense fiber network is needed to support the millimeter wave transmitters, and it’s hard to think that the revenues from millimeter wave broadband will ever justify building the needed network.

It’s starting to look like the real reason for the talk about a 5G war is to drum up sympathy for the big cellular carriers as a justification for big government giveaways. The FCC has been generous to the cellular carriers in the last few years. They killed broadband regulation and net neutrality. They gave the cellphone carriers the right to place cellular equipment anywhere in the public right-of-way. Just recently the FCC created a 5G Fund to give $9 billion to the cellular carriers to expand their networks in rural areas. The FCC has been freeing up every imaginable band of spectrum for 5G.

That sounds like that ought to be enough, but since these giveaways are behind us, I wonder why I’m still hearing the rhetoric, such as the recent letter from Senators. Are we going to be seeing other big giveaways? Is the government perhaps going to give billions of dollars to build urban and suburban 5G networks so that we don’t lose the 5G war? I’m at a loss to think of anything else that the government could do to push 5G beyond what they’ve already done.

There doesn’t seem to be anything that the US government can do in terms of developing 5G technology faster. Corporations all over the world are furiously working to implement the many new aspects of the 5G specifications. Many of the corporations doing the key research are not even American, and labs at Nokia and several Chinese companies are among the leaders in developing the core equipment used to transmit 5G. It’s hard to think there is anything the US government could do to help us win the 5G war from a technical perspective.

I must admit that I’m starting to cringe when I hear federal officials talk about the 5G war. It makes me believe that there more big handouts coming to the cellular carriers. I hate the idea of the federal government handing billions to these big carriers while we continue to have lousy rural broadband – which is largely the fault of these same big carriers. My response to these Senators is that we shouldn’t be trying to win the 5G war if that means losing the landline broadband war.

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.

Unlicensed Millimeter Wave Spectrum

I haven’t seen it talked about a lot, but the FCC has set aside millimeter wave spectrum that can be used by anybody to provide broadband. That means that entities will be able to use the spectrum in rural America in areas that the big cellphone companies are likely to ignore.

The FCC set aside the V band (60 GHz) as unlicensed spectrum. This band provides 14 GHz of contiguous spectrum available for anybody to use. This is an interesting spectrum because it has a few drawbacks. This particular spectrum shares a natural harmonic with oxygen and thus is more likely to be absorbed in an open environment than other bands of millimeter wave spectrum. In practice, this will shorten bandwidth delivery distances a bit for the V band.

The FCC also established the E band (70/80 GHz) for public use. This spectrum will have a few more rules than the 60 GHz spectrum and there are light licensing requirements for the spectrum. These licenses are fairly easy to get for carriers, but it’s not so obvious that anybody else can get the spectrum. The FCC will get involved with interference issues with the spectrum – but the short carriage distances of the spectrum make interference somewhat theoretical.

There are several possible uses for the millimeter wave spectrum. First, it can be focused in a beam and used to deliver 1-2 gigabits of broadband for up to a few miles. There have been 60 GHz radios on the market for several years that operate for point-to-point connections. These are mostly used to beam gigabit broadband in places where that’s cheaper than building fiber, like on college campuses or in downtown highrises.

This spectrum can also be used as hotspots, as is being done by Verizon in cities. In the Verizon application, the millimeter wave spectrum is put on pole-mounted transmitters in downtown areas to deliver data to cellphones as fast as 1 Gbps. This can also be deployed in more traditional hot spots like coffee shops. The problem of using 60 GHz spectrum for this use is that there are almost no devices yet that can receive the signal. This isn’t going to get widespread acceptance until somebody builds this into laptops or develops a cheap dongle. My guess is that cellphone makers will ignore 60 GHz in favor or the licensed bands owned by the cellular providers.

The spectrum could also be used to create wireless fiber-to-the-curb like was demonstrated by Verizon in a few neighborhoods in Sacramento and a few other cities earlier this year. The company is delivering residential broadband at speeds of around 300 Mbps. These two frequency bands are higher than what Verizon is using and so won’t carry as far from the curb to homes, so we’ll have to wait until somebody tests this to see if it’s feasible. The big cost of this business plan will still be the cost of building the fiber to feed the transmitters.

The really interesting use of the spectrum is for indoor hot spots. The spectrum can easily deliver multiple gigabits of speed within a room, and unlike WiFi spectrum won’t go through walls and interfere with neighboring rooms. This spectrum would eliminate many of the problems with WiFi in homes and in apartment buildings – but again, this needs to first be built into laptops, sart TVs and other devices.

Unfortunately, the vendors in the industry are currently focused on developing equipment for the licensed spectrum that the big cellular companies will be using. You can’t blame the vendors for concentrating their efforts in the 24, 28, and 39 GHz ranges before looking at these alternate bands. There is always a bit of a catch 22 when introducing any new spectrum – a vendor needs to make the equipment available before anybody can try it, and vendors won’t make the equipment until they have a proven market.

Electronics for millimeter wave spectrum is not as easily created as equipment in lower frequency bands. For instance, in the lower spectrum bands, software-defined radios can easily change between nearby frequencies with no modification of hardware. However, each band of millimeter wave spectrum has different operating characteristics and specific antenna requirements and it’s not nearly as easy to shift between a 39 GHz radio and a 60 GHz radio – they requirements are different for each.

And that means that equipment vendors will need to enter the market if these spectrum bands are ever going to find widespread public use. Hopefully, vendors will find this worth their while because this is a new WiFi opportunity. Wireless vendors have made their living in the WiFi space and they need to be convinced that they have the same with these widely available spectrum bands. I believe that if some vendor builds indoor multi-gigabit routers and receivers, the users will come.

Is There a Business Case for Fast Cellular?

We’ve gotten a glimpse of the challenges of marketing faster cellular usage since the two major cellular providers in South Korea made a big push in offering ultrafast cellular broadband. South Korea has two primary cellular carriers – SK Telecom and KT – and both have implemented cellular products using millimeter wave spectrum in Seoul and other dense urban areas.

The technology is nearly identical to the technology introduced by Verizon is small sections of major US cities. The technology uses millimeter wave hot spots from small cell sites to beam broadband to phones that are equipped to use the ultra-high spectrum. In South Korea, both companies are selling a millimeter wave spectrum version of the Samsung Gallery. In the US there are still barely any handset options.

5G hotspot data is not the same as traditional cellular data. The small cells blast out gigabit broadband that carries for only short distances of 500 to 800 feet. The signals can bounce off buildings in the right circumstances and can be received sporadically at greater distances from the transmitters. Millimeter wave spectrum won’t pass through any obstacle and the broadband signal reception can be blocked by any obstacle in the environment, including the body of the person using the cellphone.

Even with those limitations, the speeds delivered with this technology are far faster than traditional cellular data speeds. Verizon has reported peak speeds as fast as 600 Mbps in trials being deployed in US cities. That’s an amazing amount of bandwidth to deliver to a cellphone since a cellphone is, by definition a single user device. Since the average 4G LTE data speed is less than 25 Mbps, our cellphone apps are not designed to be bandwidth hogs. Current 4G speeds are more than adequate to stream video, and with the small screens, there’s no benefit to streaming in 4K or even in 1080p. All of the major cellular carriers already chop down the quality of video streams and thus use only a fraction of the bandwidth used to deliver a single video stream to homes. Cellphones are also not designed to multitask and handle multiple simultaneous tasks.

For now, the biggest benefit of millimeter wave spectrum for cellphones looks to be the ability to quickly download big files like movies, apps or software updates. There is certainly an appeal to downloading a big movie to watch later in less than 30 seconds rather than the more normal 10 minutes. But with data caps on even most unlimited plans I have to wonder how many people routinely download big movie files when they aren’t connected to WiFi.

Another way that faster cellular speeds could be beneficial is for faster web browsing. However, the slow cellphone browsing we experience today is not due to 4G LTE speeds, which are adequate for a decent browsing experience. The painfully slow browsing on cellphones is due to operating systems in cellphones that favor display over functionality – the cellular companies have chosen to downplay browsing speed in favor of maximizing the display for phone apps. Faster millimeter wave spectrum won’t overcome this inherent and deliverate software limitation.

There is another use for faster broadband. South Korea likely has a much higher demand for high-speed cellular because the country is game-crazy. A large majority of the population, including adults, are heavily involved in intensive gaming. There is obviously some appeal for having a fast gaming connection when away from a desktop.

South Korean market analysts are looking at the cost of millimeter wave deployment and the potential revenue stream and are already wondering if this is a good investment. SK Telecom expects to have 2 million customers for the faster broadband by the end of this year. In South Korea, sales of millimeter wave spectrum phones are going well. (these can’t be called 5G phones because they don’t handle frequency slicing or the other slew of 5G features that won’t be introduced for at least three more years).

If the analysts in South Korea don’t see the financial benefits, it’s much harder to see the benefits here. Remember that in South Korea that urban homes can already buy gigabit broadband at home for the equivalent of $30 per month. Moreover, the two big ISPs are in the process of upgrading everybody to 10 Gbps within the next five years. This is a country where everybody has been trained to expect an instant response online – and the faster cellular speeds can bring that expected response to mobility.

The business plan here in the US is a lot more challenging. In South Korea, a lot of people live in dense urban city centers unlike our spread-out population with far-stretching suburbs around cities. The network cost to deploy the millimeter wave technology here will be significantly higher to achieve the same kind of coverage seen in South Korea. At least for now, it’s also a lot harder to paint a picture in the US for large numbers of users willing to pay extra for faster cellular data. Several recent surveys indicate that US consumers think faster 5G data speeds should be offered at the same high prices we already pay for cellular broadband (the US has some of the highest cellular data prices among industrial countries).

I can’t see a major play here for ultra-fast cellular broadband outside of dense city centers and perhaps in places like stadiums and convention centers. It’s hard to think that somehow deploying this technology in the suburbs could ever be cost-justified. We are likely to upgrade cellular data to the more normal 5G using mid-range spectrum, and that’s going to nudge cellular data speeds in time up to 100 Mbps. I think most users here will love somewhat faster speeds but won’t be willing to pay extra for them. It’s hard to think that there are enough people in the US willing to pay even more for millimeter wave speeds that can justify the cost of deploying the networks. This is further compounded by the fact that these millimeter wave networks are outdoors only and the spectrum doesn’t penetrate buildings at all. The US has become an indoor society. At least where I live you rarely see teenagers outdoors in their home neighborhood – they are consuming broadband indoors. Does anybody really care about a fast outdoor network?

Protesting 5G

There were over 90 protests nationwide recently against the coming 5G technology, mostly related to health concerns. The protesters have some of the facts wrong about 5G and that makes it easier for policymakers to ignore them. It’s hard to fault anybody about getting the facts wrong about 5G since the carriers have purposefully filled the press with misleading 5G rhetoric. I would venture to say a lot of people in our industry have the same misunderstandings.

I watched a few news reports of the various protests, and protesters cited the following concerns about 5G. They say that it’s already being installed and will be active in most cities by next year. They say that in the near future that cellular speeds will be 100 times faster than today. They say that the FCC has blessed 5G as safe when it’s not. Let me address each of these issues:

What is 5G? Many of the protestors don’t realize that 5G is the marketing name of several different technologies. 5G can mean improved cellular service. 5G can mean high-speed wireless broadband loops like is being tested by Verizon in Sacramento. And 5G can mean gigabit radio connections made between two points, similar to traditional microwave backhaul. Protestors have conflated the claims for each technology and assume they apply to 5G cellular service.

Is 5G Being Installed Today? Cities everywhere are seeing permit requests for small cell sites and often believe these are requests to install 5G – I just talked to a fairly large city the other day who made this assumption. For now, the requests for small cell sites are to bolster the 4G cellular network. The cellular companies aren’t talking about it, but their 4G data networks are in trouble. People are using so much data on their phones that cell sites are getting overwhelmed. The amount of data being used by cellphones users is currently doubling every two years – and no data network can handle that kind of growth for very long. The cellular carriers are quietly beefing up the 4G networks in order to avoid the embarrassment of major network crashes in a few years. They are hoping that within 3 -5 years that 5G can relieve some of the pressure from cellular networks.

Will 5G Be Here Next Year? It might be a decade until we see a full 5G cellular installation. There are 13 major specifications for improvements between 4G and 5G and those will get implemented over the next decade. This won’t stop the marketing departments of the cellular carriers to loudly claim 5G networks after one or two of these improvements have been partially implemented.  What the cellular companies never bothered to tell the public is that the first fully-compliant 4G cell site was just implemented last year – 5G is going to require the same slow steady introduction of changes until full 5G gets here. Starting a year or two from now we might see some 5G improvements, with more 5G upgrades introduced each year thereafter. The carriers will loudly announce every time they make a 5G trial and will make the world think they are the improvements will be immediately installed everywhere.

Will Cellular Speeds be 100 Times Faster? The 5G specification calls for cellular speeds to be improved over time to 100 Mbps, about 6 times faster than 4G cellular speeds today. Speeds won’t improve overnight and this certainly isn’t going to be here in a year or two.

The public thinks that we’ll see gigabit cellular speeds for several reasons. First, Verizon recently introduced a trial for fast cellular using millimeter wave spectrum in small portions of a few downtown areas. Millimeter wave cellular is not going to make sense for wide deployment because the fast data speeds only carry perhaps 200 feet from the transmitter. Millimeter wave spectrum in this application is blocked by almost everything in the environment. This trial was mostly to grab headlines, not to portend a real product. Confusion also came when AT&T recently announced a 2 Gbps connection made to an outdoor hot spot. This is using point-to-point technology that can never apply to cellphones – but the AT&T announcement made this fuzzy on purpose.

What About the Health Impacts? Most 5G cellular service will use the same spectrum, or some new bands that are similar to today’s cellular spectrum. The primary concern for 5G cellular (and 4G) is the introduction of small cell sites into neighborhoods. It’s concerning to citizens when a cell site is on a pole at their curb instead of at the top of a tall tower outside the neighborhood. The neighborhood cell sites are going to be broadcast at a lower power level than the current big cell sites, so theoretically the amount of cellular radiation ought to be similar to today. But to give credit to the protesters, we’ll only know that’s really true after small cell sites have been installed.

The real health concern that is troublesome is not related to 5G cellular using the same frequencies as today, but rather about the use of  millimeter wave spectrum. A significant percentage of the world’s scientists that work in this area recently warned the United Nations that some past research of millimeter wave spectrum shows negative impacts for plant and animal life. The scientists admit that much more research is needed and they pleaded with the UN to not use the general public as guinea pigs. Belgium recently banned millimeter wave spectrum deployment until the health risks are understood. The FCC joins with almost every other country in allowing the deployment of millimeter wave spectrum and is in the process of licensing more of the spectrum.

As mentioned earlier, Verizon recently did a few trials of sending millimeter wave spectrum to cellphones. This was viewed mostly as a gimmick because this doesn’t seem to have real-life market potential due to the limitations for the spectrum and cellphones. I just saw an estimate that it would take over 300,000 small cell sites to blanket Los Angeles with small cells that are close enough to deploy millimeter wave spectrum – that doesn’t sound like a plausable or profitable business plan.

The technology where the protesters should be focused is millimeter wave spectrum wireless loops. Verizon deployed this to a few hundred homes in Sacramento and a few other cities, delivering about 300 Mbps broadband to homes. Verizon says they have plans to deploy this widely. This is the spectrum use that the scientists warned about. A deployment of millimeter wave loops means constantly bombarding residential neighborhoods with millimeter wave spectrum from poles on the curb. The other planned use of millimeter wave spectrum is for indoor routers that will transmit gigabit bandwidth inside of a room. People can clearly decide to not use millimeter wave routers, but have no say about a carrier introducing it into the neighborhood. Protesters have a valid concern for this technology.

Millimeter Wave Cellular Service

Verizon is claiming to have the first real-world deployment of fast 5G cellular service. They launched an early version of what they are calling 5G in downtown Chicago and Minneapolis. This launch involves the deployment of millimeter wave spectrum.

A review of the cellular performance in FierceWireless showed exactly what was to be expected. This new service will only be available from a few cell sites in each city. For now the service can only be received using a Motorola Z3 handset that has been modified with a 5G Moto Mod adapter.

As would be expected, the millimeter wave broadband was fast, with peak speed measured at 500 Mbps. But also as expected, the coverage area is small, and millimeter wave spectrum is easily blocked by almost any impediment. Walking inside a building or around the corner of a building killed the broadband signal. The signal speed cut in half when received through a window. When not in the range of the millimeter wave signal the phone reverts to 4G, because Verizon is not yet close to implementing any actual 5G standards. This was not a trial of 5G technology – it’s a trial that shows that millimeter wave spectrum can carry a lot of data. That is especially easy to demonstrate when there are only one or two users on a given cell site.

Verizon announced a fee of $10 per month for the faster data speed, but almost immediately said the fee will be waived. This launch is another marketing gimmick letting Verizon get headlines proclaiming 500 Mbps cellular data speeds. The reviewer noted that the Verizon store in downtown Chicago was not ready to provide the product to anybody.

There are big issues with using millimeter wave spectrum for cellular service. I first ask what a cellphone user can do with that kind of speed. A cellphone can already be used to stream a video on a decent 4G connection. Other than software updates there isn’t any real need to download big files on a cellphone. It’s unlikely that the cellular carriers are going to let you tether speeds of that magnitude to a computer.

The other big issues will be the real-life limitations of millimeter wave spectrum outdoors. Since the frequency won’t pass through walls, this is strictly going to be an outdoor walking technology. As the FierceWireless review showed, it’s extremely easy to walk out of coverage. A cellular carrier will need to provide multiple cell sites in very close proximity in order to cover a given area.

It’s hard to think that there will ever be many subscribers willing to pay $10 more per month for a product with these limitations. How many people care about getting faster data speed outside, and only in areas of a city that are close to 5G transmitters? Would many cellular customers pay more so that they could save a few minutes per month to download software updates?

It’s hard to envision that the incremental revenues from customers will ever justify the cost of deploying multiple cell sites within close proximity of each other. T-Mobile already announced that they don’t plan to charge extra for 5G data when it’s available – there is no incentive to offer the product if there is no additional revenue.

What I found interesting is that Verizon also announced that they will be launching this same product in 20 additional urban markets soon, with 30 markets by the end of the year. The company will be using this launch to promote the new Galaxy S10 5G phone that will be able to utilize the millimeter wave spectrum. Verizon is touting the new service by saying that it will provide access to faster streaming, augmented-reality, gaming, and consumer and business applications.

If anything, this launch is a gimmick to sell more of the expensive 5G handsets. I wonder how many people will buy this phone hoping for faster service, only to realize that they have to stand outside close to a downtown millimeter wave cell site to use it. How many people want to go outside to enjoy faster gaming or augmented reality?

This is not to say that millimeter wave spectrum doesn’t have value, but that value will manifest when Verizon or somebody offers an indoor 5G modem that’s connected to a landline broadband connection. That would enable a cellphone to connect to faster gaming or augmented reality. That has some definite possibilities, but that is not cellular service, but rather an indoor broadband connection using a cellphone as the receiver.

I’m really starting to hate these gimmicks. Verizon and AT&T are both painting a false picture of 5G by making everybody think it will provide gigabit speeds everywhere – something that is not even listed as a goal of the 5G specifications. These gimmicks are pure marketing hype. The companies want to demonstrate that they are cutting edge. The gimmicks are aimed even more for politicians who the carriers are courting to support deregulation of broadband in the name of 5G. In the cease of this particular gimmick, Verizon might sell more Samsung 5G phones. But the gimmicks are just gimmicks and this trial is not a real product.

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.

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.