The big picture for US comms contains a hole

Article By : Brian Santo

All Americans should be able to benefit from technological progress, but many haven’t. Will 5G be the means for including them?

In the last year or so, some of the largest cable companies have begun moving gingerly into the wireless portion of the market. Comcast began offering 4G services last summer through a mobile virtual network operator (MVNO) agreement with Verizon, right around the same time the company declared its network was ready to evolve to 5G. Charter (Spectrum), also working with Verizon, launched 4G on the last day of June; it subsequently said it is testing 5G in several markets. Altice recently said it is building its own core network and will begin offering 5G service in 2019, working through an MVNO arrangement with Sprint.

The 5G market is drawing in more wireless participants, which will represent a little more of the direct competition that is still mostly lacking among US communications services providers (CSP).

It’s the job of most EDN readers to focus on technology implementation details. Context tends to be information about industry horse races – which widget is gaining in popularity? Which company’s strategy is paying off? Every once in a while it’s useful to take yet another step back and look at the big picture. What is the industry doing, and why is it doing it?

Access to communications services has always been a safety issue – some services are described as “lifeline” for a reason. Access to the best communications services available has always been a component of economic prosperity; these days it is practically a prerequisite.

One of the guiding principles of communications policy in the United States for more than 30 years has been to encourage competition. Increasing competition is meant to achieve three ends: improved services, better prices for consumers, and the extension of services to those who are not already served or who are underserved. US policy rightfully covers all Americans. More than three decades after Ma Bell was broken up, creating the conditions for competition, those three policy goals have yet to be achieved for all Americans.

The hope was that after breaking up Ma Bell, the Baby Bells would compete with each other. They would not. The Telecommunications Act of 1996 was supposed to encourage major phone companies to start competing with each other in the telephony market, and similarly was supposed to encourage cable companies to compete with each other in the video market. None of that happened.

Eventually though, in most major markets, the local cable operator and the local phone company began to compete. Cable used its broadband infrastructure to get into telephony – and rates plummeted. Eventually the phone companies got into video, similarly using Internet-based technology. (Rates did not drop; the fees that pay-TV networks must render to content providers have always been rising costs.)

It wasn’t necessarily what most people who helped shape the 1996 laws were expecting, but it is competition. Until recently that competition has rarely been direct. In too many markets it still isn’t; there are areas where competition is weak, and a few areas yet where there’s none.

Direct competition requires a direct comparison, apples to apples. Comparing competing communications services is more like comparing apples and oranges, or like taking Oregon strawberries, which are the Platonic ideal of a strawberry but too fragile to ship, and comparing them to California strawberries, which are as hardy as cardboard during shipping, but also taste like cardboard. Or like comparing broccoli to kale; they’re nutritionally equivalent, but only masochists eat kale.

Satellite companies can’t do broadband effectively, which affects their pay TV services too; it makes time-shifting a complex proposition. Cable broadband has always been faster than DSL, but then DSL is usually cheaper. That’s a legitimate choice – unless the fastest broadband available is required, in which case there’s no real choice.

Phone companies improved by upgrading DSL with fiber to the node (FTTN) or replacing DSL with fiber to the premises (FTTP). Most large phone companies have upgraded to fiber to the whatever (FTTX), but none of those have upgraded their entire geographic footprints. Where they have FTTX, they’re more directly competitive with cable, but they’ve chosen to not be competitive everywhere that they could be – no large phone company has upgraded its entire network.

In smaller markets there might still be only one choice for a CSP, or one practical choice for a CSP based on the superior quality of one’s service bundle versus the other’s.

Verizon and AT&T can offer a quad play, but Sprint and T-Mobile can’t. Nonetheless, all four have roughly similar coverage maps and similar quality of service, and wireless prices have come down significantly. It remains to be seen what affect on the market the Sprint/T-Mobile merger will have, should it succeed.

CSPs price the triple play (wireline phone, video, broadband) or the quad play (the triple play plus wireless service) cheaper than buying services a la carte. But if customers want the best of each of the services they get, they’ll almost certainly have to patronize at least two CSPs and pay extra for the privilege.

It’s pretty rare to find two competitors with the same channel line-ups and extras. This one might have access to a sports league that one doesn’t; that one might be in a carriage spat with a content provider and lacks all of those channels.

Cable operators responded to the growing popularity of wireless communications by relying on Wi-Fi. It can be an effective strategy in the most densely populated places, but not so much everywhere else, which is why some of them are trying to find ways to provide some sort of 5G service.

And the upshot of all of this is that 44 years after the US started legal proceedings against AT&T, 34 years after it succeeded in breaking up Ma Bell, 22 years after the landmark Communications Act, the US still has mostly broccoli-versus-kale competition, some communications service prices have lowered and some have not, and while the technology progressed impressively, there are still underserved and unserved communities who haven’t seen some (or any) of those improvements.

There are several excellent reasons to anticipate 5G, most having to do with improved and new services based on faster rates, selectable quality of service, and lower latencies. But one of the reasons CSPs touted it was because it would be the means by which they would finally, as long promised, be able to economically reach underserved and unserved markets – markets that have been waiting literally for decades for better service. And now it seems like 5G isn’t the way to do that after all.

AT&T had been reassessing its plans for fixed wireless broadband. AT&T reportedly is (or should be) considering upgrading the company’s FTTN network to fiber to the home (FTTH). To offer fixed wireless broadband, the company would have to extend FTTN anyway in order to connect all the extra 5G basestations, which for a variety of reasons will have to be more closely spaced. FTTH, it turns out, might actually be not only cheaper but, end to end, probably more reliable and easier to maintain.

These considerations will be the same for every CSP, including the small, local companies that specialize in connectivity in sparsely populated areas. And so it remains unclear if it’s still too expensive to reach underserved and unserved areas, even with 5G.

How does the US communications industry reach underserved and unserved areas? That part of the big picture is still missing.

Brian Santo has been writing about science and technology for over 30 years, covering cable networks, broadband, wireless, the Internet of things, T&M, semiconductors, consumer electronics, and more.

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