Will Broadband Go Wireless?

For years it’s been impossible to go to any industry forum without meeting a few folks who predict that residential broadband will go wireless. This buzz has accelerated with the exaggerated claims that fast 5G broadband is right around the corner. I’ve seen even more talk about this due to a recent Pew poll that shows that the number of people that only use their cellphones for data has climbed significantly over the last few years – I’m going to discuss that poll in another upcoming blog.

The question I’m asking today is if it’s possible that most residential broadband usage in the country can go wireless. Like I usually do I looked around the web to try to define the current aggregate amount of landline and cellular data currently being used in the US. It’s a slippery number to get a grasp of for a number of reasons, not the least being that broadband usage is growing rapidly for both cellphones and landline connections. It looks like landline data usage per household is still doubling about every three years; it looks like cellphone data usage is doubling every two years.

OpenVault recently reported that the average monthly household broadband usage has grown to 273.5 gigabytes for the first quarter of this year, up from 215.4 gigabytes a year earlier in 2018 – a growth rate of 27% which almost exactly doubles usage in three years if sustained.

There are currently a little more than 127 million households, and the FCC says that around 85% of all households have broadband. Extrapolating that all out means that US landline networks in aggregate carried almost 30 exabytes of broadband for households monthly in the first quarter of this year. (An exabyte is 1 million terabytes, or 1 billion gigabytes).

I’ve seen a few recent statistics that says that about 77% of Americans now have a smartphone, up from 67% in 2017. Recent statistics from several sources say that the average data usage per smartphone is now over 4 gigabytes per month, with buyers of ‘unlimited’ data plans averaging more than 6 gigabytes per month and others still down closer to 1 gigabyte per month. With a current population around 329 million and using an average of 4 gigabytes per month per residential phone, the cellular networks are currently carrying about 1 exabyte of residential broadband per month.

If we extrapolate forward six years, assuming keeping the existing growth rate for each kind of broadband, we can predict that total monthly US residential broadband usage will be something like the table below. Note that these figures exclude business broadband usage.

:

Monthly Exabytes
Landline Cellular
2019 30 1.0
2020 38 1.4
2021 48 2.0
2022 61 2.9
2023 78 4.2
2024 99 6.0

Today the landline residential broadband networks are carrying 29 exabytes more of data per month than cellular. Within six years that difference grows to 93 exabytes. There is no reasonable path forward that will have cellular data usage overtake residential usage in our lifetime.

The next issue to address is the overall capacity of the cellular network. The engineers at the cellular networks are likely cringing at the possibility of having to carry 6 exabytes of cellular data per month in six years – a 600% increase over today. The cellular companies are going to be increasing data capacity in three ways – adding small cells, adding more mid-range spectrum, and adding 5G efficiency captured mostly through frequency slicing. It’s going to take all of those upgrades just to keep up with the growth in the above chart.

There are those who say that the way the cellular companies will handle future growth is through millimeter wave spectrum. However, that technology will require a fiber-fed small cell site near to every home. We really need to stop referring to millimeter wave spectrum as 5G wireless and instead call it what it is – fiber-to-the curb. When thought of that way, it’s easy to realize that there are no carriers likely to make the investment to deploy that much fiber along every residential street in America. Wireless 5G fiber-to-the-curb is not coming to most neighborhoods. The bottom line is that the world is not going to go wireless, and anybody saying so is engaging in hyperbole and not reality.

How We Use More Bandwidth

We’ve known for decades that the demand for broadband growth has been doubling every three years since 1980. Like at any time along that growth curve, there are those that look at the statistics and think that we are nearing the end of the growth curve. It’s hard for a lot of people to accept that bandwidth demand keeps growing on that steep curve.

But the growth is continuing. The company OpenVault measures broadband usage for big ISPs and they recently reported that the average monthly data use for households grew from 201.6 gigabytes in 2017 to 268.7 gigabytes in 2018 – a growth rate of 33%. What is astounding is the magnitude of growth, with an increase of 67.1 gigabytes in just a year. You don’t have to go back very many years to find a time when that number couldn’t have been imagined.

That kind of growth means that households are finding applications that use more bandwidth. Just in the last few weeks I saw several announcements that highlight how bandwidth consumptions keep growing. I wrote a blog last week describing how Google and Microsoft are migrating gaming to the cloud. Interactive gaming already uses a significant amount of bandwidth, but that usage is going to explode upwards when the machine operating the game is in a data center rather than on a local computer or game console. Google says most of its games will operate using 4K video, meaning a download speed of at least 25 Mbps for one stream plus an hourly download usage of 7.2 GB.

I also saw an announcement from Apple that the users of the Apple TV stick or box can now use it on Playstation Vue to watch up to four separate video steams simultaneously. That’s intended for the serious sports fan and there are plenty of households that would love to keep track of four sporting events at the same time. If the four separate video streams are broadcast in HD that would mean downloading 12 GB per hour. If the broadcasts are in 4K that would be an astounding 29 GB per hour.

The announcement that really caught my eye is that Samsung is now selling an 8K video-capable TV. It takes a screen of over 80 inches for the human eye to perceive any benefit from 8K video. There are no immediate plans for anybody to broadcast in 8K, but the same was true when the first 4K TVs were sold. When people buy these TVs, somebody is going to film and stream content in the format. I’m sure that 8K video will have some improved compression techniques, but without a new compression scheme, an 8K video stream is 16 times larger than an HD stream – meaning a theoretical download of 48 GB per hour.

Even without these new gadgets and toys, video usage is certainly the primary driver of the growth of household broadband. In 2014 only 1% of homes had a 4K-capable TV – the industry projects that to go over 50% by the end of this year. As recently as two years ago you had to search to find 4K programming. Today almost all original programming from Netflix, Amazon, and others is shot in 4K, and the web services automatically feed 4K speeds to any customer connection able to accept it. User-generated 4K video, often non-compressed, is all over YouTube. There are now 4K security cameras on the market, just when HD cameras have completely replaced older analog cameras.

Broadband usage is growing in other ways. Cisco projects machine-to-machine connections will represent 51% of all online connections by 2022, up from 40% today. Parks and Associates just reported that the average broadband home now has ten connected devices, and those devices all make internet connections on their own. Our computers and cellphone automatically update software over our broadband connections. Many of us set our devices to automatically back-up our hard drives, pictures, and videos in the cloud. Smart home devices constantly report back to the alarm monitoring service. None of these connections sound large, but in aggregate they really add up.

And sadly, we’re also growing more inefficient. As households download multiple streams of music, video, and file downloads we overload our WiFi connection and/or our broadband connection and thus request significant retransmission of missing or incomplete packets. I’ve seen estimates that this overhead can easily average 20% of the bandwidth used when households try to do multiple things at the same time.

I also know that when we look up a few years from now to see that broadband usage is still growing that there will be a new list of reasons for the growth. It may seem obvious, but when handed enough bandwidth, households are finding a way to use it.

Broadband Usage Continues to Grow

The firm OpenVault, a provider of software that measures data consumption for ISPs reported that the average monthly data use by households grew from 201.6 gigabytes in 2017 to 268.7 gigabytes in 2018 – a growth rate of 33%. The company also reported that the medium use per household grew from 103.6 gigabytes in 2017 to 145.2 gigabytes in 2018 – a growth rate of 40%. The medium represents the midpoint of users, with half of all households above and half below the medium.

To some degree, these statistics are not news because we’ve known for a long time that broadband usage at homes, both in total download and in desired speeds has been doubling every three years since the early 1980s. The growth in 2018 is actually a little faster than that historical average and if the 2018 growth rate was sustained, in three years usage would grow by 235%. What I find most impressive about these new statistics is the magnitude of the annual change – the average home used 67 more gigabytes of data per month in 2018 than the year before – a number that would have seemed unbelievable only a decade ago when the average household used a total of only 25 gigabytes per month.

There are still many in the industry who are surprised by these numbers. I’ve heard people claim that now that homes are watching all the video they want that the rate of growth is bound to slow down – but if anything, the rate of growth seems to be accelerating. We also know that cellular data consumption is also now doubling every two years.

This kind of growth has huge implications for the industry. From a network perspective, this kind of bandwidth usage puts a big strain on networks. Typically the most strained part of a network is the backbones that connect to neighborhood nodes. That’s the primary stress point in many networks, including FTTH networks, and when there isn’t enough bandwidth to a neighborhood then everybody’s bandwidth suffers. Somebody that designed a network ten years ago would never have believed the numbers that OpenVault is reporting and would likely not have designed a network that would still be sufficient today.

One consequence of the bandwidth growth is that it’s got to be driving homes to change to faster service providers when they have the option. A household that might have been happy with a 5 Mbps or 10 Mbps connection a few years ago is likely no longer happy with it. This has to be one of the reasons we are seeing millions of homes each year upgrade from DSL to cable modem each year in metropolitan areas. The kind of usage growth we are seeing today has to be accelerating the death of DSL.

This growth also should be affecting policy. The FCC set the definition of broadband at 25/3 Mbps in January of 2015. If that was a good definition in 2015 then the definition of broadband should have been increased to 63 Mbps in 2019. At the time the FCC set that threshold I thought they were a little generous. In 2014, as the FCC was having this debate, the average home downloaded around 100 gigabytes per month. In 2014 the right definition of broadband was probably more realistically 15 – 20 Mbps and the FCC was obviously a little forward-looking in setting the definition. Even so, the definition of broadband should be increased – if the right definition of broadband in 2014 was 20 Mbps, then today the definition of broadband ought to have been increased to 50 Mbps today.

The current FCC is ignoring these statistics for policy purposes – if they raise the definition of broadband then huge numbers of homes will be classified as not having broadband. The FCC does not want to do that since they are required by Congressional edict to make sure that all homes have broadband. When the FCC set a realistic definition of broadband in 2015 they created a dilemma for themselves. That 2015 definition is already obsolete and if they don’t change it, in a few years it is going to be absurdly ridiculous. One only has to look forward three years from now, when the definition of broadband ought to be 100 Mbps.

These statistics also remind us of the stupidity of handing out federal subsidies to build technologies that deliver less than 100 Mbps. We still have two more years of CAF II construction to upgrade speeds to an anemic 10 Mbps. We are still handing out new subsidies to build networks that can deliver 25/3 Mbps – networks that are obsolete before they are completed.

Network designers will tell you that they try to design networks to satisfy demands at least seven years into the future (which is the average life of many kinds of fiber electronics). If broadband usage keeps doubling every three years, then looking forward seven years to 2026, the average home is going to download 1.7 terabytes per month and will expect download speeds of 318 Mbps. I wonder how many network planners are using that target?

The final implications of this growth are for data caps. Two years ago when Comcast set a terabyte monthly data cap they said that it affected only a few homes – and I’m sure they were right at the time. However, the OpenVault statistics show that 4.12% of homes used a terabyte per month in 2018, almost double from 2.11% in 2017. We’ve now reached that point when the terabyte data cap is going to have teeth, and over the next few years a lot of homes are going to pass that threshold and have to pay a lot more for their broadband. While much of the industry has a hard time believing the growth statistics, I think Comcast knew exactly what they were doing when they established the terabyte cap that seemed so high just a few years ago.