Broadband

Fiber in the Sky

5G poses a fast, furious threat — and opportunity — for U.S. cable operators 3/06/2017 8:00 AM Eastern
Vendor Mimosa Networks has found that line of sight is key when using 5G-based technology to deliver fixed wireless broadband service in millimeter wave bands.
TakeAway

The emergence of super-fast 5G wireless technology could roil the market for wireline broadband services.

The 5G race is on.

Operators around the world are embarking on prestandard trials of 5G, an emerging, next-generation wireless technology that promises to deliver a jaw-dropping array of futuristic advances in communications: multi-Gigabit broadband speeds, innovative mobile services, the Internet of Things and such revolutionary applications as self-driving cars.

With its ability to tap into wide swaths of spectrum, 5G will deliver wireline-like multi-Gigabit speeds that could competitively upend the already shifting market of fiber- and cable-delivered broadband services. (See Translation Please.)

Though real-world service speeds are to be determined — providers are still working out the kinks — some early trials have shown the potential to deliver speeds of more than 30 Gigabits per second (on the extreme end), according to a survey of market activity from test and measurement firm Viavi.

That’s 30 times faster than the current gold standard of 1 Gbps delivered to residential customers by today’s all-fiber networks of ISPs such as Google Fiber, and by cable operators that have upgraded to DOCSIS 3.1. According to a recent Comcast estimate, a 1-Gbps connection would allow a consumer to download a 600-Megabyte TV episode in four seconds. Using that same estimate, a 30-Gbps link would allow a user to download multiple seasons of a TV series in that same short span.

RISKS AND OPPORTUNITIES
For cable operators, 5G will be friend and foe. Though it could pave the way for new competitive entrants, the technology’s wireline backhaul requirements represent a potentially lucrative business-services opportunity for MSOs. 5G is also expected to play a role as cable operators pursue and expand their own mobile and wireless strategies.

The delivery date for full 5G is widely debated, but the current consensus expectation is that the technology will be ready for market-wide launches by 2020. Phase I of the standard should be completed by mid-2018, while phase II, which will add some incremental capability, is expected by the fourth quarter of 2019, with 5G-enabled smartphones anticipated to hit the market by late 2019.

“Between 2019 and 2022, we’ll see that sharp, aggressive launch of 5G,” Glenn Laxdal, head of network products for Ericsson North America, said.

However, the initial impact of the new 5G infrastructure will be felt much sooner, as prestandard and precommercial implementations enter the fray. Imagine fast, fixed wireless access services delivered to the home that are easier to execute, in comparison to 5G’s trickier mobile and IoT aspects.

Verizon Communications is hitting on that fixed access idea early, with plans to launch 5G precommercial Gigabit broadband trials in 11 U.S. markets by mid-2017. Those trials, which will involve “several hundred cell sites that cover several thousand customer locations,” will test how the technology performs in various topologies in areas including Ann Arbor, Mich.; Atlanta, Bernardsville, N.J.; Brockton, Mass.; Dallas; Denver; Houston; Miami; Sacramento, Calif.; Seattle; and Washington, D.C.

Given its focus on Gigabit-class speeds, 5G will also need gobs of spectrum. One great place to look for that is in the millimeter wave (mmWave) bands. But there are some drawbacks, as mmWave requires smaller cell sizes than 4G and more of them in order to reach the Gigabit-class speeds and coverage 5G promises. Those mmWave signals are easily blocked by trees and buildings, so early 5G fixed wireless deployments will require good line of sight.

The good news for service providers is that 5G will work with both licensed spectrum, like what’s being set aside in the 28 GHz band and 37-39 GHz bands, but will also operate in unlicensed bands, like those available in lofty regions of 64-72 GHz.

Another area to look is the 3.5 GHz Citizens Broadband Radio Service band that is set for release. Laxdal said the use of beam-forming and beam-tracking with 5G, which points “beamlets” directly at a user’s smartphone, aims to ensure that such traffic does not interfere with WiFi traffic also operating in that band.

Jaime Fink, chief technology officer and cofounder of Mimosa Networks, said his company, which provides fixed wireless systems for thousands of ISPs, has experimented in those higher bands and has found that “perfect line of sight” is indeed required.

“I’m skeptical of it being a non-line-of-sight opportunity,” he said, noting that mmWave could work for very short range urban small cells and be useful for obtaining excess capacity that can expand and enrich the mobile network. Likewise, he said, mmWave could work across short-ranges on building rooftops.

And though 5G lab trials show promise in terms of supporting high speeds, “What is hard is delivering it en masse into neighborhoods … and that’s where it gets hazy,” Fink said.

Fink and others believe mmWave will need to be paired with services delivered in the sub-6 GHz bands that work better where foliage is present and in suburban markets.

Charles Cheevers, chief technology officer, consumer premises equipment at Arris, agreed that 5G will likely need to support a “dual-PHY” network architecture that taps mmWave with a fallback to sub-6GHz spectrum that doesn’t need direct line of sight.

AT&T will put some of those technical challenges to the test. It’s working with Nokia on a 5G fixed-wireless lab test that is streaming subscription over-the-top service DirecTV Now over a 29-GHz system using the vendor’s commercially available AirScale radio access platform.

AT&T, which is conducting the trial at its Middletown, N.J., facility, has said 39 GHz and the 28 GHz mmWave bands are “particularly attractive,” given the large amounts of bandwidth available there.

That idea falls in line with what some analysts expect. Strategy Analytics, for example, has said video is an “anchor” use case for 5G, arguing it could become a platform that could rival pay TV services delivered via cable, satellite and telco IPTV networks.

Even though 5G fixed wireless is an option being pursued by carriers like Verizon, the economics might not add up for other market entrants.

“It’s a tough proposition,” Cheevers said, noting that a newcomer would have to undercut the current provider in the market while also facing higher deployment costs.

Another challenge is the eye test, as any 5G fixed wireless setup will likely require an outdoor mount.

“The aesthetics are a problem, too, in order to win business from existing wired providers,” Cheevers said. “I think the cable industry is quite comfortable with the customers they currently have because of that dynamic.”

CABLE’S 5G OPPORTUNITY
While the competitive threat posed by fixed 5G is questionable, 5G’s need for small cells that must also be connected to rich fiber networks to backhaul all of that traffic is “where the cable operators come in,” Laxdal said.

Cable’s widespread broadband networks are also among the driving reason behind rumors that Verizon is interested in buying Charter Communications.

However, cable operators are also positioned to take advantage of other 5G use cases, including fixed wireless access in residential and business service areas where MSO wired networks have yet to reach.

Some cable providers could also take advantage of the future mobile use cases for 5G, as MSOs such as Comcast and Charter trigger and develop services fueled by mobile virtual network operator (MVNO) deals with carriers such as Verizon.

Those MSOs, which have mobile products in the works, have likewise started to show their 5G hands.

Charter, for example, is already conducting 5G tests, following up on its application for experimental licenses for the pilots from the Federal Communications Commission, company CEO Tom Rutledge said on the company’s earnings call in January.

“We intend to use these field trials as learning opportunities to provide us with better insight into the capabilities of our wireline network when attaching radios with high frequency licensed and unlicensed spectrum,” he said, noting that he views 5G as a capacity-enhancing play more so than a mobile service play.

Comcast, which plans to launch a mobile product by midyear, is also eager to explore the 5G waters, at least with respect to power and backhaul that can be supported by the MSO’s roughly 650,000 miles of plant.

“I think that 5G is an exciting evolution in the business,” Neil Smit, president and CEO of Comcast Cable, said on the company’s fourth-quarter earnings call in January. “We’re doing some testing right now. We think that it’s going need economical space, power and backhaul … We think that we’re well-positioned to participate in the 5G rollout, no matter how it happens, as a result of having all those assets in place already.”

Cheevers said the multiple-dwelling unit (MDU) market is one that’s wellsuited to 5G. Apartments and condominiums represent a simpler option that would let operators take advantage of facilities with good line of sight and buildings with access to fiber.

“If I was a cable operator, I’d look at the MDU acquisition [opportunity],” Cheevers said.

CableLabs, the cable industry’s R&D organization, has been heavily engaged with wireless, including work with the 3rd Generation Partnership Project (3GPP) and as a board member of the MulteFire Alliance, which is eying 5G services in unlicensed bands.

“We are following 5G very actively … It’s on our radar,” Belal Hamzeh, vice president of wireless technologies at CableLabs, said, noting that nearly half of the organization’s global members are also mobile operators.

5G operators will need a pervasive infrastructure power and backhaul, which “aligns well with the cable infrastructure,” he said. “Having the cable industry involved in 5G should not be a surprise to anybody.”

But not all cable operators are sold on the promise of 5G. For one, Liberty Global, which operates both fixed and mobile service in Europe and other regions, is wary the returns won’t justify the capital requirements.

CAPEX CONCERNS
“We worry about that leap,” Liberty Global CEO Mike Fries said last week at the Mobile World Congress show in Barcelona, Spain.

“We think 5G is actually at a crossroads,” he said, noting that capital requirements should be part of a 5G discussion that has centered on collaboration and cooperation. “It’s not predestined.”

Fries said he fears that such an investment might not be forthcoming, particularly in Europe, if the environment in which Liberty Global and others operate doesn’t become healthier, and if the continent’s mobile market doesn’t undergo a much-needed wave of consolidation.

“One hundred twenty operators vying for declining revenues is a difficult place to be in,” Fries said. By comparison, he said, the U.S. “has it right in many respects” when it comes to the number of mobile competitors vying for share.

“It’s going to be a difficult act here in Europe to see this 5G vision come to fruition if we don’t create a more stable competitive environment,” Fries said. “There are too many mobile operators in Europe today. It’s very difficult to see a return with that much competition.”

Amid that uncertainty, top cable technology suppliers are keying on this wireless shift and are adjusting accordingly.

Casa Systems, a vendor that has traditionally focused on products for hybrid fiber coaxial networks, has been expanding into mobile and wireless in recent years to match the pursuits of its MSO partners and as a way for the vendor to enter new markets. Of recent note, it added 5G-focused small cell products and management products to its portfolio.

Casa’s mobile-facing products are getting “considerable momentum” and now counts about 25 “customer engagements,” according to Andrew Gibbs, the company’s vice president of product management.

MSOs are in a great position to “be the dominant service providers going forward as 5G takes shape,” he said, noting that have the wired infrastructure to support and invest in small cell systems that serve schools, enterprises, hospitality venues and, later, smart cities.

Arris, another top MSO supplier that counts Comcast and Charter as top customers, is going deeper into wireless and mobile through a proposed $800 million acquisition that includes Brocade Communications’s Ruckus Wireless unit.

Arris CEO Bruce McClelland said the deal represents a critical, defining moment in the company’s history, as many of its MSO customers pivot into wireless and mobile services.

“If I’m right, I think we’ll look back at this five years from now and say, ‘Gosh, that was a great move,’ ” McClelland said. “It could take a variety of different forms, but I think at the end of the day they’re all going to be wireless operators.”

5G may enter the picture at Arris down the road, but early on McClelland expects the pending deal to initially focus on augmenting capacity for standard 4G LTE mobile applications.

SIDEBAR > 5G: Five Things to Know
The initial use case for “precommercial” 5G products will be Gigabit-class, fixed wireless broadband access speeds to the home.

The move to full 5G technology and more advanced use cases, such as mobility, support for the Internet of Things and low-latency apps like self-driving cars, aren’t expected to emerge on a widespread commercial basis until 2020.

5G is not the sole domain of carriers with licensed spectrum. It will operate in both licensed and unlicensed spectrum.

5G will rely partly on spectrum in the millimeter wave bands, which require short distances to deliver high speeds and good line-of-sight connections. Given that scenario, 5G operators will likely want to also employ spectrum in the bands below 6 GHz as a fallback.

5G is a wireless technology, but underpinning it with solid, wired backhaul networks will be critical. That’s a major opportunity for cable operators with massive fiber-rich networks, and could drive more M&A activity as mobile carriers seek important backhaul options.

Want to read more stories like this?
Get our Free Newsletter Here!