By Doug Dawson | Original Pots and Pans articles here.
Link to Part 1 — the Residential Broadband Scheme
Sept 4, 2018 — Ronan Dunne, an EVP and President of Verizon Wireless recently made Verizon’s case for aggressively pursuing 5G. This last article in the series looks at Verizon’s claim that they are going to use 5G to offer residential broadband. The company has tested the technology over the last year and announced plans to soon introduce the technology into a number of cities.
I’ve been reading everything I can about Verizon and I think I finally figured out what they are up to. They have been saying that within a few years that they will make fixed wireless 5G broadband service available to millions of homes. One of the first cities they will be building is Sacramento. It’s clear that in order to offer fast speeds that each 5G transmitter will have to be fed by fiber. To cover all neighborhoods in Sacramento would require building a lot of new fiber. Building new fiber is both expensive and time-consuming. It’s still a head-scratcher for how this might work in neighborhoods without poles where other utilities are underground.
Last week I read of an announcement by Lee Hick’s of Verizon for a new initiative called One Fiber. Like many large telecoms Verizon has numerous divisions that own fiber assets like the FiOS group, the wireless group and the old MCI business CLEC group.
The new policy will consolidate all of this fiber under into a centralized system, making existing and new fiber available to every part of the business. It might be hard for people to believe, but within Verizon each of these groups managed their own fiber separately. Anybody who has ever worked with the big telcos understands what a colossal undertaking it will be to consolidate this.
Sharing existing fiber and new fiber builds among its various business units is the change that will unleash the potential for 5G deployment. My guess is that Verizon has eyed AT&T’s fiber the strategy and is copying the best parts of it. AT&T has quietly been extending its fiber-to-the-premise (FTTP) network by extending fiber for short distances around the numerous existing fiber nodes in the AT&T network. A node on an AT&T fiber built to get to a cell tower or to a school is now also a candidate to function as a network node for FTTP. Using existing fiber wisely has allowed AT&T to claim they will soon be reaching over 12 million premises with fiber – without having to build a huge amount of new fiber.
Verizon’s One Fiber policy will enable them to emulate AT&T. Where AT&T has elected to build GPON fiber-to-the-premise, Verizon is going to try 5G wireless. They’ll deploy 5G cell sites at their existing fiber nodes where it makes financial sense. Verizon doesn’t have as extensive of a fiber network as AT&T.
Verizon has been making claims about 5G that it can deliver gigabit speeds out to 3,000 feet.
Verizion Millimeter Waves Go 3,000 Feet
It might be able to do that in ideal conditions, but their technology is proprietary and nobody knows the real capabilities. One thing we know about all wireless technologies is that it’s temperamental and varies a lot by local conditions. The whole industry is waiting for the speeds and distances Verizon will really achieve with the first generation gear.
The company certainly has some work in front of it to pursue this philosophy. Not all fiber is the same and their existing fiber network probably has fibers of many sizes, ages and conditions using a wide range of electronics. After inventorying and consolidating control over the fiber they will have to upgrade electronics and backbone networks to enable the kind of bandwidth needed for 5G.
The Verizon 5G network is likely to consist of a series of cell sites serving small neighborhood circles — the size of the circle depending upon topography. This means the Verizon 5G networks will not likely be ubiquitous in big cities — they will reach out to whatever is in range of 5G cell sites placed on existing Verizon fiber. After the initial deployment, which is likely to take a number of years, the company will have to assess if building additional fiber makes economic sense. That determination will consider all of the Verizon departments and not just 5G.
I expect the company to follow the same philosophy they did when they built FiOS. They only built in places that met certain cost criteria. This resulted in a network that, even today, brings fiber to one block but not the one next door. FiOS fiber was largely built where Verizon could overlash fiber onto their telephone wires or drag fiber through existing conduits — I expect their 5G expansion to be much the same.
The whole industry is waiting to see what Verizon can really deliver with 5G in the wild. Even if it’s 100 Mbps broadband they will be a competitive alternative to the cable companies. If they can really deliver gigabit speeds to entire neighborhoods then will have shaken the industry. But in the end, if they stick to the One Fiber model and only deploy 5G where it’s affordable they will be bringing a broadband alternative to those that happen to live near their fiber nodes – and that will mean passing by tens of millions of homes.
Link to Part 2 — the Retail Scheme
Aug 20, 2018 — This is a second in a series of articles that look at Verizon’s list of ways that the company thinks they can monetize 5G. The first article looked at medical applications. Today I look at the potential market use for 5G for retail.
Verizon’s retail vision is interesting. They picture stores that offer an individualized shopping experience that also uses augmented and virtual reality to communicate with and sell to customers. This is not a new idea and the idea of using 3D graphics and holograms in stores was one of the first future visions touted by augmented reality developers. We are just now on the verge of having technology that could make this possible.
Verizon obviously envisions using 5G bandwidth to enable these applications. Stores will want the flexibility to be able to put displays anywhere in the store, and change them at will, so doing this wirelessly would be a lot cheaper than stringing fiber all over stores. Streaming holograms requires a lot of bandwidth, so this seems like a natural application for millimeter wave spectrum. Our current cellular frequencies are not sufficient to support holograms.
The new 5G standard calls for the use of millimeter wave spectrum to deliver gigabit data paths wirelessly indoors. Verizon envisions companies using Verizon licensed spectrum. However, the FCC has already set aside several bands of millimeter wave spectrum for public use and there will soon be a whole industry developing millimeter wave routers for use as WANs – likely the same companies that today make WiFi routers.
I have a hard time seeing how Verizon will have any market advantage over the many other companies that will be developing millimeter wave WANs using public spectrum.
The personalized shopping experience is a different matter. Verizon is envisioning a network that identifies customers as they enter the store, either through facial recognition, through cell phone signals, or perhaps because customers voluntarily use an app that identifies them. Verizon envisions using the 5G network tied into big data applications to enable stores to craft a unique shopping experience for each customer. For regular customers that would meaning using a profile based on their past shopping history, and for everybody else it means using a profile cobbled together from the big data all of the ISPs are gathering on everybody.
Verizon and the other big ISPs have invested in subsidiaries that can crunch big data and they are hungry to snag a piece of the advertising revenue that Google has monetized so well. Using big data to enhance the shopping experience will likely be popular with the kinds of shoppers who use in-store apps today. Customers can be offered live specials as they walk down aisles, with offers personalized to them. This could be tied into the holographic product displays and other in-store advertising systems.
However, this shopping application could quickly get creepy if it is done for all shoppers. I know I would never visit a store a second time that recognizes me as I walk in the door and that uses a cloud-based profile of me to try to direct my shopping. Perhaps my distaste for this kind of intrusion is a generational thing and it might be attractive to younger generations of shoppers – but I would find it invasive.
One of the biggest hurdles I see for Verizon’s vision is that retail stores are slow adapters of new technology. This kind of application would likely start at the big nationwide chains like Target or Walmart, but it’s a decades-long sales cycle to get stores everywhere to accept this. Verizon’s vision also assumes that stores want this – but they are already competing for their own survival against online shopping and fast delivery and they might be leery about using a technology that could drive away a portion of their customer base.
Verizon is espousing a future vision of retail where the retailer can interact electronically with shoppers on a personalized basis. The first big hurdle will be convincing retailers to try the idea, because it could easily go over the top and be viewed by the public as invasive. More importantly, licensed 5G from Verizon isn’t the only technology that can deliver Verizon’s vision since there will be significant competition in on public spectrum. This is one of those ideas that might come to pass, but there are enough hurdles to overcome that it may never become reality.
Link to Part 3 — the Stock Trading Scheme
Aug 27, 2018 — Ronan Dunne, an EVP and President of Verizon Wireless recently made Verizon’s case for aggressively pursuing 5G. In this blog I want to examine the two claims based upon improved latency – gaming and stock trading.
The 5G specification sets a goal of zero latency for the connection from the wireless device to the cellular tower. We’ll have to wait to see if that can be achieved, but obviously the many engineers that worked on the 5G specification think it’s possible. A 5G wireless signal, however, almost immediately hits a fiber network at a tower or small cell site in a neighborhood, and from that point forward the 5G signal experiences the same latency as an all-fiber connection.
Most of the latency in a fiber network comes from devices that process the data – routers, switches and repeaters. Each such device in a network adds some delay to the signal – and that starts with the first device, be it a cellphone or a computer. In practical terms, when comparing 5G and Fiber to the Premises (FTTP), the network with the fewest hops and fewest devices between a customer and the internet will have the lowest latency – a 5G network might or might not be faster than an FTTP network in the same neighborhood. As in many things . . . it depends on the specifics of your unique connection.
A latency primer —
- Most FTTP networks have latency in the 10-millisecond range (one hundredth of a second).
- Cable HFC networks have latency in the range of 25-30 ms;
- DSL latency ranges from 40-70 ms;
- Satellite broadband connections from 100-500 ms.
Verizon’s claim for improving the gaming or stock trading connection also implies that the 5G network will have superior overall performance. That brings in another factor which we generally call jitter. Jitter is the overall interference in a network that is caused by congestion. \
Any network can have high or low jitter depending upon the amount of traffic the operator is trying to shove through it. A network that is oversubscribed with too many end users will have higher jitter and will slow down – this is true for all technologies. I’ve had clients with first generation BPON fiber networks that had huge amounts of jitter before they upgraded to new FTTP technology, so fiber (or 5G) alone doesn’t mean superior performance.
The bottom line is that a 5G network or a fiber network might or might not have an overall advantage compared to a other networks in the same neighborhood. Once again . . . it depends on the specifics of your unique connection.
The 5G network might have a slight advantage on the first connection from the end user, but from that point forward, the network with the fewest hops to the Internet as well the network with the least amount of congestion will be faster – and that will be case-by-case, neighborhood-by-neighborhood when comparing 5G and FTTP.
Verizon is claiming that the improved latency will improve gaming and stock trading. That’s certainly true where 5G competes against a cable company network. But any trader that really cares about making a trade a millisecond faster is already going to be on a fiber connection, and probably one that sits close to a major internet POP.
Such traders are engaging in computerized trading where a person is not intervening in the trade decision. For any stock trades that involve humans, a extra few thousandths of a second in executing a trade is irrelevant since the human decision process is far slower than that (for someone like me these decisions can be measured in weeks!).
Link to Part 4 — the IoT-Medical Device Scheme
Aug 15, 2018 — Ronan Dunne, an EVP and President of Verizon Wireless recently made Verizon’s case for aggressively pursuing 5G. On an investor call he talked about potential ways that the company might monetize the new technology. Over a series of blogs I’m going to look at the various market applications of 5G — envisioned by Verizon.
Mr. Dunne thinks 5G cellular can be used to develop advanced networks to provide better long-term patient monitoring. The solution he envisions would use cellular technology to power medical monitoring devices worn by patients or used in homes.
This one application gets to the heart of Verizon’s vision of the future with using 5G as the primary technology to connect to IoT devices. Today there are already health and medical devices connected through the cellular network. For example, there are GPS-enabled running watches today that require a cellular subscription. These devices communicate 2-way with the cloud through cellular. They can upload a runner’s statistics like heart rate and can also download things like a map of the runner’s location.
However, there are huge numbers of similar devices that don’t use cellular. For example, there are running monitors that provide the same features by connecting through a runner’s smartphone, which the runner must carry to get the same kind of feedback. Many of the most popular devices like Fitbit don’t require cellular at all and can store runner’s statistics until they can sync with their home WiFi network. There are also many in-home medical monitors that connect only through WiFi.
Verizon wants to capture the IoT market, and medical devices are just one of the many market niches they envision. In Verizon’s vision of the future, all medical monitors would come with a cellular subscription.. Currently WiFi and Bluetooth technology is cheap and there is very little incremental cost of building these technologies into the chips in devices – many common chips already have built-in WiFi. It’s much more expensive today to provide a 2-way cellular device.
There are also weaknesses with cellular coverage that would need to be addressed. For example, I can see a weak Verizon signal from my upstairs office, but I have zero bars of coverage on the first floor or in my yard. There are still a lot of homes today who have no cellular coverage, or coverage only outside or in some parts of their home.
Like many of the applications that Verizon has in mind, the goal is for them to sell many more cellular subscriptions. Practically everybody in the country now has a cellphone and Verizon envisions IoT-monitoring subscriptions as a way to boost sales. But this is going to require a public willing to pay more for the extra connectivity. In the case of medical monitoring, a device that can connect to WiFi in the home or to a smartphone outside the home can provide the same connectivity at zero extra cost to the consumer. My guess is that Verizon will be pushing sales of medical monitoring through doctors and hospitals, because a lot of consumers would choose the cheaper alternative if they are given a choice.
Verizon pictures a future world where all of our IoT devices connect using cellular. This connectivity is made easier with 5G since the new specification calls for allowing 100,000 simultaneous connections to devices from each cell site. However, WiFi already has a huge market lead in this area and IoT devices come WiFi enabled, I foresee a huge uphill fight for Verizon to try to capture this business. I know personally that, given a choice, I’m going to buy an appliance with WiFi connectivity over a model that requires an additional cellular subscription, no matter how small the extra fee. Verizon ultimately foresees homes paying an additional $20 or $30 per month for IoT connectivity, which translates to huge profits for the company.
I also worry about privacy using the cellular network. Today my landline ISP needs to somehow pick out my IoT signals from the rest of bits generated from my home – something I can easily hide if I wish to. But Verizon would automatically know the source of the communication from each IoT device connected to their network, allowing them to more easily spy on my IoT outputs – particularly if they are the ones translating the signals to send back to doctors, hospitals or whoever is at the other end of each IoT device. I really don’t trust Verizon enough to let them peer that easily into my personal data.
This application is no slam dunk for Verizon. There is certainly an opportunity for them to convince health care companies to use devices that require an extra 5G connectivity charge each month. But when this choice is left up to consumers I think most of them will choose to keep using WiFi once they understand all of the facts.