Don’t expect the new generation of wireless tech to replace fiber, no matter what AT&T says
Illustration by Alex Castro / The Verge
Speaking on the company’s earnings call last week, AT&T CEO Randall Stephenson said he sees fifth-generation wireless (5G) becoming [an unregulated] “fixed broadband replacement product” [no longer constrained to be offered at reasonable prices] within the next three to five years, providing consumers with faster speeds than most existing cable and DSL connections [most likely, at higher prices].
AT&T’s marketing department insists that the public will see “unforeseen innovation” as these networks come online. Both AT&T and Verizon have spent several years portraying 5G as an almost utopian solution to the slow speeds and sporadic availability of traditional broadband, heralding 5G as an essential cornerstone of the smart cities of tomorrow. [Yet there are few complaints from Google Fiber customers enjoying blazingly-fast Fiber Optic to the Home ('FTTH') service.]
“But . . . in absolutely no way is wireless service ever going to be competitive with high-speed fiber optic wireline services.”
If 5G really could stand in for broadband, it would be filling a serious gap in American internet access — [and would do so primarily via fiber optic cables that will be installed just short of FTTH, to ensure higher, unregulated fixed wireless and data-capped prices]. Federal Communications Commission data shows that fiber optic broadband remains unavailable for the majority of Americans, and there’s virtually no broadband competition at faster speeds. Both Verizon and AT&T have been repeatedly criticized (and occasionally sued) for promising fiber they don’t deliver, something often obscured by the government’s failure to adequately map broadband availability.
Another Telecom Bait-and-Switch Scam
Experts say there are plenty of reasons to be skeptical about the hype surrounding 5G, especially given these same companies’ long history of unfulfilled broadband promises. While 5G will most definitely provide faster, lower-latency networks, it shouldn’t be seen as a magical cure-all for the many problems that plague the US broadband sector, they argue.
Groups like the Electronic Frontier Foundation have argued in government filings that 5G hype overshadows these same companies’ long-standing failures to deploy real fiber broadband to rural and less affluent urban markets (despite billions in tax breaks, subsidies, and regulatory favors). Further, 5G shouldn’t be seen as synonymous with the fast, reliable fiber connections that these same companies should have deployed years ago.
Ernesto Falcon, legislative counsel at the EFF, told The Verge . . .
“Absolutely no way is wireless service ever going to be competitive with high-speed wireline services. The fastest speeds the industry is boasting about for the future of wireless has already been surpassed by fiber to the home years ago.”
Rural carriers have long accused companies like AT&T and Verizon of overstating 4G availability, and researchers have shown that early 5G availability is already being aggressively overstated by carrier marketing departments. History suggests that consumers should believe carrier promises of ubiquitous 5G availability only once they’ve actually seen it.
“US consumers already pay some of the highest prices in the developed world for 4G LTE”
Meanwhile, most 5G marketing and press coverage tends to omit the biggest reason why 5G isn’t likely to be a perfect replacement for fixed-line broadband: price.
US consumers already pay some of the highest prices in the developed world for 4G LTE access, and so far, 5G is no better. AT&T’s initial foray into 5G is not only barely available at
$500 for a hot spot and $70 for just 15 gigabytes of usage (plus access fees just to connect to the network), but it’s also certainly no fixed-line replacement, especially as 4K gaming and next-generation game streaming go mainstream.
Telecom Monopoly Power & Abuses
The shift to 5G also won’t address one of the biggest — but largely overlooked — reasons for high wireless prices in the United States. Large ISPs enjoy a de facto monopoly over the business data services (BDS) market, which adds a huge cost to providing wireless service. This “special access” market connects everything from cell towers to ATMs to the larger internet, and FCC data indicates that in 73 percent of geographical areas, this market is dominated by just one ISP (usually AT&T, Verizon, or CenturyLink).
Smaller cellular carriers have complained for years that incumbents use this monopoly power to charge egregious rates to connect their towers to the internet backbone, putting them at a competitive disadvantage and driving up rates for carriers and consumers alike.
Incompas, a trade group representing these smaller carriers, told The Verge that 5G isn’t likely to change this dynamic.
“The incumbents have already raised prices on business customers via BDS lines . . . allowing them to burn the bridge to broadband would leave millions of customers with higher bills, slower speeds and without a 5G future.”
Other experts argue that your wireless connection may soon come packed with arbitrary restrictions that have never been a problem on wireline connections. The EFF, for example, told The Verge that industry attacks on net neutrality and FCC authority open the door to all manner of aggressive pricing and network restrictions that will not only drive up your monthly bill, but profoundly change the way we use the internet for the worse.
Verizon, for example, already charges its unlimited data customers notably more money just to view content in full HD.
Sprint has similarly toyed with charging users additional money to avoid the throttling of games, video, and music.
Both AT&T and Verizon have explored using arbitrary usage caps and overage fees to unfairly hamstring streaming competitors.
Ernesto Falcon, legislative counsel at the EFF:
“If the carriers adopt aggressive zero-rating plans in the 5G market as a means to charge ever higher prices, it will directly stifle the promise of faster wireless service and allow them to engage in anti-competitive practices against alternatives on the Internet.”
None of this is to say that 5G won’t be a generally good thing when it finally arrives at scale, something that’s not expected to happen until 2020 or later. Early trials have resulted in speeds as high as 1.7 Gbps in the labs, and the virtualization technology accompanying the standard will make wireless networks more resilient and easier to manage. The lower latency 5G provides will make mobile network-reliant technologies simply function better. There’s no debate that 5G is a modest but important evolution.
But if there’s anything to be taken from the telecom industry’s long history of unfulfilled promises, caveats, head fakes, and outright falsehoods, it’s that Telecom sector promises should always be taken with several grains of salt. Those waiting for 5G to magically fix the worst aspects of a troubled US broadband sector — particularly, high prices — probably shouldn’t hold their breath.