Tag Archives: verizon

5G phone prices start high while 5G availability is low

by Steve Blum • , , ,

5g mwca 12sep2018

The first 5G capable smart phones are beginning the hit the market, and already there’s wailing about sticker shock – a Samsung Galaxy Note 10 Plus 5G will cost $1,300 and only be available through Verizon, at least for the next few months. That’s a lot of money for an Android phone (although not exactly nosebleed territory for iOS fans). But it doesn’t say much about what it’s going to cost the average consumer to upgrade to 5G, by the time the average consumer can find 5G service.

The initial price of 5G phones isn’t indicative of anything except manufacturers starting at the top of the marginal price curve and getting ready for a quick downhill run. As manufacturing ramps up, and product bugs are squashed, the price will come down.

The first target market is technophiles – people who will buy it because it’s new tech. That’s probably a six-figure market in the U.S. They’ll pay the most. Second target market is early adopters – people who perceive a significant benefit from the increased performance 5G phones presumably will offer. That market is probably in the seven figure range. By the time 5G phones break out into the general market – eight and nine figures – price points will be in familiar, 4G territory.

Hardware and service adoption will follow service availability, and that will be the limiting factor for 5G uptake over the next two to three years. There’s very little 5G service available right now, and commercial-scale deployments won’t begin until next year. What we’re seeing from carriers now are pilot projects aimed at preparing for the buildout that’ll begin in 2020 and continue for the next five to ten years.

There’s no need for manufacturers to rush into 5G production or push down phone prices in the coming year. They’re wisely positioning themselves for the long haul.

Top mobile execs let air out of the 5G balloon, which will “never reach rural America”

by Steve Blum • , , ,

Deflating balloon

It’s one thing to promise the moon to customers and city councils, but quite another to mislead Wall Street. Creating outrageous expectations there can land you in jail. Which, presumably, is why two top executives from Verizon and T-Mobile are walking back expectations of a universal 5G wonderland.

According to a story by Sean Hollister in The Verge, it’s about the new frequency bands that mobile companies plan to use for high speed, low latency 5G service. Those bands are way up the spectrum chart, in the millimeter wave range, where data capacity is high but range and penetrating power is low. So to make it work, mobile carriers need to build a lot of small cell sites. Which is expensive and only pencils out where revenue potential is equally high…

“We all need to remind ourselves this is not a coverage spectrum,” Verizon CEO Hans Vestberg told analysts on the company’s Q1 2019 earnings call on Tuesday — just one day after T-Mobile CTO Neville Ray decried Verizon’s 5G rollout as one that would “never reach rural America.”

“Millimeter wave (mmWave) spectrum has great potential in terms of speed and capacity, but it doesn’t travel far from the cell site and doesn’t penetrate materials at all. It will never materially scale beyond small pockets of 5G hotspots in dense urban environments,” Ray wrote.

5G technology can be used on any frequency band, and over time – decades, likely – it’ll replace 4G and older equipment. And there are plans to use it on a few lower frequencies with less data capacity and greater reach in the near term. But without network densification – lots of short range small cell sites – 5G will just be a tech upgrade, and not a quantum leap into a hyper connected world.

It’s a tech upgrade that will bring significant benefits, as did upgrades from 2G to 3G, and 3G to 4G, but it will take a long time for rural and suburban California to notice the difference.

Eight essential characteristics of 5G networks defined by Verizon CEO

by Steve Blum • , , ,

Vestberg keynote ces 8jan2019

Hans Vestberg, Verizon’s CEO, did a rockstar, black t-shirt keynote at CES in Las Vegas yesterday. Vestberg took over the top spot at Verizon last year. As he often did in his former job as head of Ericsson, Vestberg offered a clear and credible explanation of what 5G networks and technology – particularly, Verizon’s – will deliver.

According to Vestberg, the eight “currencies”, or defining characteristics, of 5G are…

  • Peak data rate of 10 gigabits per second. This is what the technology can deliver, the question will be whether the infrastructure and resources are deployed to support it in any given location.
  • Mobile “data volume”, aka network capacity, of 10 terabits per second per square kilometer. Again, depends on whether a given network is fully built out and provisioned.
  • Mobility. Users can connect while travelling at 500 kilometers per hour. That’s roughly 300 miles per hour and good enough for high speed trains. Not quite airliner speeds, though.
  • One million connected devices per square kilometer. That’s versus a similarly theoretical maximum of 100,000 connected devices per square kilometer for 4G networks.
  • End to end latency of 5 milliseconds. That’s at least ten times faster than what 4G networks deliver. The plain meaning of the words implies a roundtrip (end to end to end) latency of 10 milliseconds, which was also a spec Vestberg mentioned on stage.
  • Reliability of 99.999%. It’s the traditional and often attained “five nines” goal of copper phone networks.
  • Service deployment of 90 minutes. To logically configure a bespoke network, that is. One of the touted benefits of 5G technology is “network slicing”, the ability to easily create subnetworks for specialised uses such as, say, for first responders or internal organisational networks.
  • Energy efficiency of 10% of current consumption. It’s not clear if Vestberg means that individual 5G small sites will use 10% of the energy that a 4G macro site uses, which is credible, or if he’s talking about the entire network, which would be difficult to take on faith.

Verizon will only be able to hit these benchmarks, assuming it can, where 5G infrastructure is fully deployed. That means deploying a lot of small cell sites and stringing a lot of fiber to connect them.

5G smartphones, systems ready for 2019 exhibition season

by Steve Blum • , , , ,

It’s a lot like spring training. Mobile 5G service is moving into the “proof of concept” stage, according to a joint press release from Samsung and Verizon. They trotted out a design they intend to offer to consumers “in the first half of 2019” at a Qualcomm meeting this week.

Both Verizon and AT&T plan to light up very limited 5G (or in Verizon’s case, near–5G) networks in several U.S. cities by the end of the month. Those, too, will be demonstration and testing platforms, rather than full-on, consumer facing service. And it’ll be fixed – not mobile – service, delivered to people in homes and businesses via WiFi “pucks” (as AT&T describes them).

Those are workouts, not regular season games, and they’re necessary. It’s one thing to develop standards and design new systems, it’s quite another to deploy them in the wild. Paying customers will evaluate the service based on their expectations, not on design specs. Cell sites will go where terrain, access and capital budgets allow. Smartphones – the critical link in the system – have to fulfil those expectations while working within network constraints.

It’s no surprise that Apple plans to sit out this next round in the 5G deployment saga. According to a story in Bloomberg, the company is sticking to its playbook and waiting for the dust to settle before adopting the new standard…

As with 3G and 4G, the two previous generations of mobile technology, Apple will wait as long as a year after the initial deployment of the new networks before its main product gets the capability to access them, said the people, who asked not to be identified discussing the company’s plans.

Apple’s previous calculations – proven correct – were that the new networks and the first versions of rival smartphones would come with problems such as spotty coverage, making consumers less compelled to immediately make the jump.

With its 5G smartphone still just a proof of concept product, Samsung is unlikely to get enough into the market next year to make much of a dent in demand, but it will earn a place in the spotlight for being first. We won’t see 5G service deployed to a meaningful degree in 2019 but, like Cactus League baseball, it’ll still be a lot of fun to watch.

The rent in our contract is more than the FCC likes, so rip it up, Verizon tells city

by Steve Blum • , , , ,

Chevy chase chainsaw

Verizon is waving the Federal Communications Commission’s pole ownership preemption order like a chainsaw as it tries to shred existing lease contracts it signed, but doesn’t like. In a request to put that order on hold, the City of North Little Rock included a copy of a letter it received from Verizon, in response to a wireless ordinance it adopted in July.

In it, Verizon told the city…

We’ve also compared our existing Master Lease Agreement (“MLA”) with the City to the FCC Order. As an initial matter, we note that the base rent amount of $2500 as well as the 10% increase of the rent during each extension term exceeds the presumptively reasonable rates established in the FCC Order, as outlined above. Thus, we’re hopeful that the City will re-examine each fee imposed by the MLA accordingly.

The FCC order attempts to set a “safe harbor” limit of $270 per site per year for pole attachment leases, but doesn’t say anything about existing, valid contracts between cities and carriers. Verizon isn’t exactly saying that it’s no longer obligated to follow contracts it doesn’t like, but it clearly intends to stretch the language of the FCC order as far as it can get away with doing.

For example, Verizon’s letter also claims…

  • A 35 foot height limit on wireless attachments to city-owned poles – enacted to protect electric workers – is illegal “because such limitation is ”more burdensome than those the state or locality applies to similar infrastructure deployments". Verizon offered no support for that statement.
  • The total fees charged by the city, on a one time and annual basis, “are inconsistent with the FCC Order because such fees exceed the allowable thresholds”. The FCC most recently characterised those thresholds as “only safe harbors”.
  • A rule that says that companies can only apply for “a maximum of twenty-five locations” at once could be “a direct prohibition on the deployment of wireless services”.

Along with the Missouri Association of Municipal Utilities, North Little Rock filed its appeal and “motion for stay” on Friday, in a St. Louis-based federal appeals court. It’s the first city to formally ask a federal court to delay the implementation of the FCC’s order, which is otherwise scheduled to take effect on 14 January 2018.

Dozens of other cities have also challenged the FCC order, and more requests for a stay are expected. At present, all the cases – thirteen, according to the FCC – involving dozens of cities are in the process of being “consolidated” in the federal tenth circuit appeals court, headquartered in Denver.

North Little Rock and Missouri Association of Municipal Utilities, motion for stay pending appeal of FCC wireless ruling and order, 14 December 2018.

Verizon letter to North Little Rock City Attorney, 5 December 2018.

Small Wireless Communication Facility Regulation, City of North Little Rock, 23v July 2018.

Links to petitions, court documents and background material are here.

Race to 5G is ready to go, but don’t be distracted by false starts

by Steve Blum • , , , ,

The easiest way to win the race to 5G is to simply declare victory. It’s what mobile carriers did a decade ago with 4G, and what they’re doing now. That’s causing confusion, as an editorial by FierceWireless’ Monica Alleven describes…

One of the problems with defining 5G is, practically speaking, there’s no single judge currently determining what is or isn’t 5G. Is it ITU’s job, or 3GPP’s? Mostly, it’s the individual marketing departments at carriers and vendors, or “all of the above"…

Verizon is probably the most justified to date to actually call its 5G Home service a 5G service. It’s not using equipment built on 3GPP’s 5G standard, it’s using the Verizon Technical Forum specification for 5G. But it’s close enough to pass the test for most in-the-know analysts, and we’re told it’s a relatively easy upgrade to the real deal when that’s ready. (That’s not to say that I think Verizon’s fixed wireless access version of 5G is really all that mind-blowing. It’s not. But that’s a different discussion.)

Verizon’s proto–5G fixed wireless service is still just a test bed. The technology is intended as an upgrade to mobile networks, even though it can serve as a platform for fixed wireless too. But it’s nearly there and, as Alleven points out, Verizon should get credit for it.

Other carriers are jumping in as well, with marketing claims that are running ahead of the state of the art. AT&T laid down a notorious smokescreen last year, when it pasted its “5G Evolution” branding on its 4G network.

T-Mobile has hung back a bit so far, but keep an eye on them: it’ll be easy for them to dust off their 4G playbook and run the same deception again. Back when all they had was a 3G network, the marketing department decided it was so excellent that it should be called 4G too.

T-Mobile’s 3G service was good then. So is AT&T’s 4G network now. But that doesn’t justify a phoney promotion to the next generation of technology. Policy makers – at the federal, state and local level – have a lot of work ahead of them, to prepare for the day that true 5G mobile networks are deployed, 5G phones are on the market and customers – of all kinds – get the full benefit of the technology.

It’s urgent work, but not the crisis that mobile companies often make it out to be.

5g, of a sort, coming to “parts of” two Californian cities in October

by Steve Blum • , , , ,

Verizon grabbed what media spotlight was shining yesterday at the opening of the second Mobile World Congress Americas show in Los Angeles. Its announcement that it would be first to market with 5G fixed wireless service wasn’t a surprise – it’s been talking about it for months – but putting a price tag and a launch date on it makes it much more real. Whether it’s really a big deal or not is a matter of how you look at it.

Mobile customers can add the fixed Verizon service to their accounts for $50 a month, standalone subscriptions are $70 a month. Verizon says users “should expect typical network speeds around 300 Mbps” with no data caps (although a mobile carrier’s definition of a data cap and yours is probably different – as the Santa Clara County Fire Department found out). The new service will be available “in parts of” Los Angeles, Sacramento, Indianapolis and Houston, beginning next month.

A very limited, fixed service-only roll out of 5G service gains two things for Verizon: a day or two of media buzz, and a test platform for 5G service, of a sort. The fixed wireless gear they’ll be installing (a service call is required) isn’t fully compliant with the official 5G spec, and will have to be replaced when the real stuff is available sometime next year. But it’s a legitimate beta test with actual customers, and that could give Verizon an operational and marketing edge down the road.

The announcement also helps to let some of the hot air out of the 5G balloon. Earlier this year, Verizon hyped 1 Gbps throughput, which it still claims is the “peak” speed for its 5G fixed service. There’s no reason to doubt that 5G networks can support gigabit throughputs, but that’s a long way from consistently delivering it to customers. Dialling expectations back to 300 Mbps is a good move.

Fiber can compete, but no competition, no fiber

by Steve Blum • , ,

Fiber-to-the-home broadband service can effectively compete against cable company offerings, but copper-based DSL service can’t. That’s a lesson that’s coming into sharp focus as telcos report 2017 financial results.

Verizon backed away from legacy telephone service, selling its California systems to Frontier among other things, but hung on to its FiOS business, which is concentrated in the northeastern U.S. As a result, Frontier is bleeding DSL subscribers (although it’s doing better where it offers FTTH service), while Verizon’s share of broadband subscribers in its FiOS territory is climbing.

Speaking at a Morgan Stanley conference, Matt Ellis, Verizon’s chief financial officer, said gains from its fiber-based broadband service even offsets declines in its video business…

We’re above 40% penetration on broadband where we have FiOS deployed…So if a customer decides to cut the cord on the video piece, I’m not getting the video revenue anymore, but I also have a significant cost component that goes away too and when those customers decide to cut the cord and rely on [the Internet] for their video entertainment, the quality of their broadband connection becomes even more important.

Verizon and AT&T posted overall broadband subscriber gains in the first nine months of 2017 – the only two major telcos to do so – despite losing a combined 172,000 DSL subs. Fiber to the home service was the reason.

As subscribers continue to dump DSL in favor of DOCSIS-based service from cable companies, telcos will invest in upgrading copper plant and/or replacing it with fiber. But only where there’s 1. competitive pressure to do so and 2. a sufficiently affluent target market. The absence of both is why AT&T and Frontier are heading rapidly in the opposite direction in rural California. Where there’s no cable service and effective competition is lacking, they are shutting down their DSL business and installing low capacity fixed wireless systems.

Where there’s no competition, there’s no need to invest in competitive service.

Verizon’s Sacramento 5G deal is about R&D and politics now, mobile service later

by Steve Blum • , , ,

The City of Sacramento’s 5G deployment deal with Verizon will expand the broadband service choices consumers have by a little bit, and pave the way for faster mobile service in the future.

The deal allows Verizon to use city assets to install what will initially be an experimental 5G network that’ll provide fixed service, presumably into homes and businesses, in competition with AT&T and Comcast. But it’s immediate value is as a development project, with technical and political benefits.

It’s no coincidence that the company chose California’s capital city. Verizon was one of the main backers of senate bill 649, which was approved by legislators but was vetoed by governor Jerry Brown. In his veto message, he said he was looking for “a more balanced solution”, which guarantees it’ll be back next year. SB 649 would have given mobile carriers at-will access to city and county-owned property, such as light poles and traffic signals, at below market rates. During legislative hearings, Verizon offered lawmakers rides around Sacramento in its 5G demo van, and generally made its presence known. The deal reached with Sacramento mayor Darrell Steinberg, a termed-out but formerly high profile state senator, will help keep Verizon top of mind at the capitol.

Leading off with fixed service allows Verizon to test 5G technology while it is still in the development stage. It can deploy a limited amount of network equipment based on the recently finalised initial set of 5G specifications without having to worry about full mobile coverage. Same with customer premise equipment. It’ll be a while before 5G mobile phones are widely available to consumers, but Verizon will have no problem sourcing and installing early and limited versions of gear that’ll support fixed service.

The deal puts Sacramento first in line for true, mobile 5G service, as it launches on a full commercial basis over the next few years. When and where that build out happens will depend to a great degree on both the political and technical results.

Swat away state broadband laws, Verizon tells FCC

by Steve Blum • , , , ,

Verizon doesn’t like it when states pass laws that affect its business, and now it wants the Federal Communications Commission to simply sweep those annoying rules away with a single, blanket preemption.

In a white paper filed with the FCC, Verizon points to ongoing efforts in California, and several other states, to re-impose Internet privacy rules that were overturned earlier this year by the federal government. It also fears that states will try to reinstate net neutrality requirements, and other common carrier obligations that the FCC is likely to scrap in the coming months.

The white paper offers excruciatingly detailed arguments about why the FCC has the authority to take any and all broadband regulation out of states’ hands, but it boils down to treating it as a purely interstate service…

The Commission can ensure nationwide uniformity for interstate services by preempting state and local laws that interfere with its exclusive jurisdiction over such services and are inconsistent with federal policies for those services, including federal polices providing for less regulation. The Commission has a long history of setting a deregulatory policy for an interstate service and preempting state and local laws that threaten to impede that policy, and courts have consistently upheld these exercises of the Commission’s preemptive power.

This latest move at the FCC is running parallel with an overhaul of wireless permitting rules, that’s also expected to result in less state and local discretion regarding issuing permits for building cell towers or other wireless infrastructure.

Verizon wants the FCC to include this overarching preemption in what is expected to be a reversal of its 2015 order classifying broadband as a common carrier service, which could come as soon as next month. Even if this kind of blanket preemption isn’t rolled into the common carrier decision, though, the concept will find willing ears among commissioners. It’s a good bet that we haven’t seen the last of it.