If you are expecting fancy, mind-blowing applications and services from 5G right away, you will be disappointed to know that the first use of the technology is for so-called “fixed wireless” service. This is just a fancy way of saying home broadband Internet access. In other words, the same service most of us get via cable, DSL or maybe fiber. Instead of a house (or business) having access to the Internet via some physical cable that extends outside the premises, the connection will be via a wireless signal to a small base station (sometimes called a “small cell”) located somewhere between 500 and 2,000 feet away. The small cell will be managed by the service provider and will be attached to some physical structure such as a utility pool, light post or short cell tower.
Although this is not a very sexy use of 5G technology there are some practical reasons for service providers to embark on this path and there is a great potential advantage to customers. From a purely technical perspective, the reason 5G can compete with cable/DSL service to offer 100Mbps and higher Internet speeds is due to the use of “millimeter wave” technology. Currently, all cellular networks (including LTE) operate at frequencies below 6Ghz—most often well below at for example 700Mhz or 1900Mhz. The advantage of lower frequencies is they can travel long distances (many miles) with relatively low obstruction from buildings, trees etc. The disadvantage is they cannot practically handle data rates much above 30 or 40Mbps. With the advent of 5G, new frequencies around 30Ghz are being used for cellular communication for the very first time. For example, Verizon is reportedly using 28Ghz in their early fixed wireless field trial in Sacramento, California. Governments continue to auction these new millimeter wave frequencies and service providers are buying them up in anticipation of a wide push into broadband Internet service.
From a business perspective, there is some need for competition in the broadband access market. Because of the immense cost involved in providing a physical connection to a house or business—the so-called “last mile” problem—most residences and businesses, even in major metropolitan areas, have at most two broadband service providers and often their service speed is very poor. For example—though I live in Silicon Valley—until two years ago the only 100Mbps option I had was Comcast cable. AT&T, fortunately, introduced fiber into my neighborhood, but it is quite expensive at $100/month for 1Gbps. This leaves room for new service providers such as Verizon, Sprint and others to set up 5G based fixed wireless service and compete with the incumbent providers such as cable companies. I expect these rollouts to take time because of the new technology challenges with higher frequencies and related cost, but over time I expect fixed wireless to bring down overall broadband Internet cost for consumers and businesses. I can already imagine mobile operators bundling cellular phone service with home Internet access so we will probably all get our communications service from just one provider. If this comes to pass, any service provider that doesn’t offer mobile service could be in trouble. If the cable companies want to survive long-term they better start building or acquiring cellular companies.