Wireless spec has a complicated relationship with cable networks

Some mobile operators that are positioning themselves at the forefront of the drive to bring some flavors of 5G to market are increasingly vociferous in their claims that 5G will be a competitor to cable’s broadband connectivity. Is 5G, presumably in its fixed mobile flavor, a true substitute for cable’s fixed broadband offering?

Chris Nicoll (l.) and Liliane Offredo of ACG Research

Chris Nicoll (l.) and Liliane Offredo of ACG Research

What complicates the question is that cable operators are also partners to mobile operators that use their fiber and DOCSIS networks for small-cell backhaul. So, are the MNOs and MSOs friends, competitors or frenemies?

For the time being, the answer is all of the above.

Today, cable’s fixed broadband offers more bandwidth, is more reliable than wireless broadband, and is often used to backhaul wireless broadband. Cable operators have also been making significant investments in their plants to meet the ever-increasing demand for bandwidth, which is driven by video streaming and other applications. Some of the technologies the MSOs are actively deploying or considering for the near future include:
DOCSIS 3.1: Supports network capacity of up to 10 Gigabits per second downstream and up to 1 Gbps upstream. Most major operators will have deployed DOCSIS 3.1 across their footprint by the end of 2018. This is already being used for strand-mount small cells for backhaul for the cable operators, but also for the mobile operators.

Full Duplex DOCSIS 3.1 (FDX): Enables upstream and downstream traffic to go up to 10 Gbps concurrently. The FD spec is complete, and interoperability testing is already underway. Early deployments will start toward the end of 2019. N+0, which means that there are no active components between the access node and the CPE, is needed to enable Full Duplex DOCSIS, and operators are already planning to move to N+0 as part of their migration to a Distributed Access Architecture, which is already underway.

These investments will provide cable companies a competitive advantage in the near future, particularly since 5G speeds are initially only incrementally faster than LTE-A networks. For example, the 5G Fixed Wireless Access (FWA) services being deployed by Verizon will offer speeds in the 300 Mbps range with peak speeds approaching 1 Gbps. At least initially, cable offers a speed and reliability advantage. Indeed, the fact that most MSOs (except Cox Communications) eschewed the FCC mmWave auction in October of 2018 points to the fact that they see their fixed plant as the best way forward for the foreseeable future.

This said, 5G FWA offers a faster time to market and can be a competitive overlay to an existing cable operator’s area, offering a competitive alternative for home fixed services in areas where the only competition to cable comes from satellite-based service such as AT&T’s DirecTV, which is not ideal for bidirectional internet services. So 5G is a competitive offering as well.

Up to this point, the fixed plant has always offered superior reliability, throughput and capacity to wireless services, which have traditionally been spectrum-constrained. With 5G and mmWave spectrum, those spectrum limitations have been removed and much higher bandwidths, into the Gigabit range, are now possible.

It is still very early days for 5G, but 5G FWA is coming, and while much of the focus of 5G is on small cells, the early implementations are with mobile 5G and FWA. 5G will open up new areas for video services for the MNOs, but also provide opportunities for the MSOs to utilize their cable plants to offer small cell backhaul. Will this translate into a win-win? Stay tuned. 

Chris Nicoll and Liliane Offredo are principal analysts at ACG Research.