Verizon’s Shaky Plans for a 5G World

Adapted from an article by Jon Markman, Sept 29, 2019 | Original The Street article here.

Wireless companies hope to beam into homes multi-gigabit internet speeds without the cost of laying fiber optic cables all the way to the homes. The companies, instead, will stop short at the Utility pole and to attempt to spray pulsed, data-modulated, Radio-frequency Electromagnetic Microwave Radiation (RF-EMR) directly into second and third story windows — from close proximity — 15-50 feet from homes.

Few people want this in their neighborhoods, as shown in the early test market of Sacramento, where Verizon can’t sell their Digital Video service at any price.

Customers could choose install new 5G transceiving antennas to get connections fast enough to stream 4k or even 8K video, competing against cable service, or customers could just not buy the Verizon wireless service and demand that the cell towers be removed from the utility poles in front of their homes.

Fifth-generation wireless, according to Verizon, is going to change American business in ways most people can’t imagine. And the groundwork is being laid right now . . . but that remains to be seen. Verizon is losing in many California cities, has participated in the largest accounting scandal and the FCC has been a serial loser in the Federal Courts of Appeal regarding their misguided 4G/5G densification streamlining orders. Read this intervenor brief from New York City challenging FCC Order 18-133 — the "Streamline Small Cell Deployment Order".

Despite these setbacks, Verizon keeps trying. At a recent investor conference, Ronan Dunne, the chief executive of Verizon Consumer Group, casually announced that 5G Home, its fixed wireless service, was coming to every market where the new wireless standard is deployed . . . but there is plenty of reason to be skeptical.

5G is dependent on additional spectrum. The higher the spectrum, the faster the possible network speeds. Millimeter waves (30,000 MHz and above) could be 100x faster than a typical 4G waves (700-2100 MHz) but mm-W’sare also notoriously finicky. The myth is that these line-of-sight signals will not travel much beyond 500 feet, will have a hard time penetrating walls and will seriously degrade in bad weather — but all of this iscontradicted by Verizon:

Lowell McAdam, CEO of Verizon in May, 2018 on CNBC:

"When [Verizon] went out in these 11 [5G test] markets, we tested for well over a year, so we could see every part of foliage and every storm that went through. We have now busted the myth that [5G frequencies] have to be line-of-sight — they do not. We busted the myth that foliage will shut [5G] down . . . that does not happen. And the 200 feet from a home? We are now designing the network for over 2,000 feet from transmitter to receiver, which has a huge impact on our capital need going forward. Those myths have disappeared."

Jason L., Verizon Field Engineer in May, 2018:

"[Verizon 5G] is really high frequency [28,000 MHz and 39,000 MHz], so everybody thinks it doesn’t go very far, but it’s a really big pipe and so that’s what allows you to gain the super fast speeds . . We’re 3,000 feet away from our radio node. the cool thing about this is that we did not move the radio node. It’s pointing down to serve the customers in that area " . . . here even 3,000 feet away, we’re still getting 1,000 [Megabits per second] speeds . . . So now we’ve driven about 1/3 of a mile away [1,760 feet] from the radio node. we are still getting very good speeds even though we have foliage in between [800 Megabits per second]."

As a result, getting reliable 5G in the wild requires a massive investment in new infrastructure that is running into massive opposition. Hundreds of thousands of new radios and and antennas are being proposed to be installed, but communities don’t want this invasion. No one wants a cell tower in front of their home.

Verizon announced in April that it would deploy 5G in parts of Chicago and Minneapolis. The Midwest cities were the first of 30 planned launches in 2019. More recently the company inked a partnership with the NFL to bring blazing fast 5G to NFL 13 stadiums. In many of these cities, the gridiron will be the only place the speedier network is operational.

The alternative is slower 5G networks that use lower frequency spectrum. Unlike millimeter wave, these networks will operate more like 4G/LTE, with slightly faster network speeds.

Wireless companies want to beam into homes multigigabit internet speeds without the cost of laying expensive fiber but residents want Fiber-to-the-Home (FTTH), instead — because they already paid for it on their landline phone bill charges from the 1990’s to the present.

Verizon has launched 5G Home services in Houston, Indianapolis, Los Angeles and Sacramento. The $70 monthly service bundled a free Google Chromecast Ultra streaming dongle or an Apple TV, and one month of YouTube TV, a low-cost cable TV alternative.

Wireless companies hope to sell this wireless alternative to wireline telephone and cable TV providers. Higher cable bills, and the ubiquity of streaming media services like Netflix (NFLXGet Report) are pushing consumers to cut the cord with pay TV providers more than ever before.

According to an August note from eMarketer, the number of cord cutters increased 19.2% in 2019. Analysts at the market research firm predict 25% of households will drop traditional pay TV by 2022. The subscription bleed is causing an inflection point. The number of households in the United States without cable TV is quickly approaching that of pay TV households.

For its part, Verizon rival AT&T operates the largest telephone network in the country. Through its Direct TV unit, it also has a substantial pay TV business. Managers can see the writing on the wall. To fight back, they are investing aggressively in content for HBO, the company’s streaming platform.

The Hollywood Reporter noted recently that Warner Media, an AT&T division, signed famed film director and producer J.J. Abrams to a $250 million deal. The Star Wars director will create film, TV and game content exclusively to bolster the digital business.

It’s a brand new world turned upside down by 5G. The new access to America’s living rooms means new business models. It means new players, and new opportunities.

Disney is getting ready to launch a media streaming service with the combined assets of Marvel, Pixar, 21st Century Fox and Disney Studios, among others. Apple will release nine shows Nov. 1 under its Apple TV+ banner. And Netflix, the streaming leader, is spending heavily to enhance its network.

The entire broadcast media industry is in a state of flux. The catalyst is faster networks and the prospect of direct access to America’s living rooms.