Verizon 5G Home will begin accepting new customer orders for its in-home wireless broadband replacement as of this Thursday, Sept. 13, with a scheduled service launch date of Oct. 1.

The new high-speed wireless service will be available in select parts of Houston, Indianapolis, Los Angeles, and Sacramento.

Verizon CEO Hans Vestberg is calling the service part of Verizon’s 5G Ultra Wideband network. Initial reports indicate speed will range between 300-1,000 Mbps and existing Verizon Wireless customers will get a $20 price break on service — $50 a month instead of $70 for non-Verizon Wireless customers. We are still waiting word on any data caps or speed throttle information. Verizon informs Stop the Cap! there are no data caps or speed throttles. Service is effectively unlimited, unless hidden terms and conditions introduce unpublished limits.

Interested customers can determine their eligibility starting at 8 a.m. ET on Thursday from the Firston5G website. If you are not eligible initially, you can add your email address to be notified when service is available in your area.

Early adopters will be awarded with a series of goodies:

• Free installation (a big deal, since it could cost as much as $200 later. An external antenna is required, as well as in-home wiring and equipment.)
• 90 days of free service (a good idea, considering there may be bugs to work out)
• 90 days of free YouTube TV (a welcome gift for cord-cutters)
• Free Chromecast or Apple TV 4K (a common sign up enticement with streaming cable-TV replacements)
• Priority access to buy forthcoming line of 5G-capable mobile devices

Customers in the first four launch cities will be using equipment built around a draft standard of 5G, as the final release version is still forthcoming. Verizon is holding off on additional expansion of 5G services until the final 5G standard is released, and promises early adopters will receive upgraded technology when that happens.

Verizon is clearly providing a greater-than-average number of enticements for early adopters, undoubtedly to placate them if and when service anomalies and disruptions occur. Although Verizon has done limited beta testing of its 5G service, it is very likely the 5G network will get its first real shakeout with paying customers. Unanticipated challenges are likely to range from coverage and speed issues, unexpected interference, network traffic loading, the robustness of Verizon’s small cell network, and how well outside reception equipment will perform in different weather conditions, particularly heavy rain and snow. With a large number of freebies, and no charges for 90 days, customers are likely to be more forgiving of problems, at least initially.

Chromecast

Verizon’s 5G network depends on millimeter wave spectrum, which means it will be capable of providing very high-speed service with greater network capacity than traditional 4G LTE wireless networks. But Verizon will have to bring 5G antennas much closer to subscribers’ homes, because millimeter wave frequencies do not travel very far.

Verizon will combine a fiber backhaul network with small cell antennas placed on top of utility and light poles to reach customers. That explains why Verizon’s initial 5G deployment is unlikely to cover every customer inside city limits. There are substantial deployment costs and installation issues relating to small cells and the optical fiber network required to connect each small cell.

Verizon’s existing FiOS network areas will offer an easier path to introduce service, but where Verizon does not offer its fiber to the home service, it will need to bring fiber optic cables deep into neighborhoods.

AT&T sees a similar challenge to 5G and is openly questioning how useful wireless 5G can be for urban/suburban broadband service, considering it can simply extend fiber optic service to those homes and businesses instead, without a costly 5G small cell deployment.

Verizon introduces 5G wireless in-home broadband in four U.S. cities and starts taking new customer orders on Thursday. (1:00)

Article updated at 6:28pm ET with information about data caps and speed throttles provided by Verizon.

Morrow

Australia is learning a costly lesson finding ways to extend broadband service to rural areas in the country, choosing fixed wireless and satellite networks that will ultimately cost more than extending fiber optic broadband to rural customers.

Australia’s National Broadband Network (NBN) is tasked with supplying virtually all of Australia with internet access, using fiber/wired broadband in urban and suburban areas and fixed wireless and satellite internet access in the country’s most remote locations.

But just a few years after debuting satellite broadband and fixed LTE 4G wireless service in many parts of the country, demand has quickly begun to overwhelm capacity, forcing costly upgrades and punitive measures against so-called “heavy superusers.” The NBN has also scrapped plans to introduce higher-speed fixed wireless services, fearing it will only create additional demands on a network that was not envisioned to manage heavy broadband usage from video streaming.

NBN CEO Bill Morrow has elected to place most of the blame on his customers, specifically “superusers” that he characterized as “online gamers” who spend hours during the day and peak usage periods consuming large parts of the fixed wireless network’s available capacity.

“In the fixed wireless, there’s a large portion [of end users] that are using terabytes of data,” Morrow said. “We’re evaluating a form of fair use policy to say, ‘We would groom these extreme users.’ Now the grooming could be that, during the busy period of the day when these heavy users are impacting the majority, that they actually get throttled back to where they’re taking down what everybody else is taking down.”

Under the current NBN fair use policy, monthly downloads per household are capped at 400 GB, with maximum usage during peak usage periods limited to 150 GB a month, which is already significantly less than what most average American households consume each month. With expensive and unexpected early upgrades to more than 3,100 cell towers to manage rapidly growing usage, the cost of service is starting to rise substantially, even as usage limits and speed reductions make these networks less useful for consumers.

In areas where the NBN extends a fiber optic network, the fixed wholesale price for a 50/20 Mbps connection is $32.00 (U.S.) per month. (A 100/40 Mbps connection costs $46.25). For fixed wireless, prices are rising. A 50/20 Mbps fixed wireless connection (with usage cap) will now cost $46.25 a month.

Morrow took heat from members of Parliament over his claim that online gamers were chiefly responsible for slowing down the NBN’s fixed wireless network.

“With great respect to everything you said over the last 15 minutes, you have been saying to us the problem here is gamers,” said MP Stephen Jones (Whitlam).

Morrow clarified that online gamers were not the principal cause of congestion. The main issue is concurrency, which drags down network speeds when multiple family members unexpectedly use an internet connection at the same time. The worst congestion results when several family members launch internet video streams at the same time. Online video not only leads average users’ traffic, it can also quickly outstrip available cell tower capacity. High quality video streaming can quickly impact 4G LTE service during peak usage periods, driving speeds down for all users. The NBN now considers these newly revealed capacity constraints a limit on the feasibility of using wireless technology like LTE to supply internet access.

The current mitigation strategy includes limiting video bandwidth, discouraging video streaming with usage caps or speed throttles, capacity upgrades at cell towers, and public education requesting responsible usage during peak usage times. With capacity issues becoming more serious, Morrow canceled plans to upgrade fixed wireless to 100 Mbps speeds because of costs. The proposed upgrades would have cost “exponentially” more than wired internet access.

Hype vs. Reality: Most Australians reject fixed wireless and satellite internet as woefully inadequate. (Source: BIRRR)

Actual Fixed Wireless speeds

Actual Satellite Internet speeds

The concept of supplying fixed wireless or satellite internet access to rural areas may have made sense a decade ago, but there are growing questions about the suitability of this technology based on growth in consumer usage patterns, which increasingly includes streaming video. The cost to provide a sufficiently robust wireless network could easily rival or even outpace the costs of extending traditional fiber optic wired service to many rural properties currently considered cost prohibitive to serve. In Australia, fixed wireless and satellite has delivered sub-standard access for rural consumers, and requires the imposition of “fair usage” caps and speed throttles that inconvenience customers. For now, Morrow believes that is still the best solution, given that Australia’s national broadband plan relies heavily on wireless access in rural communities.

“[The benefit of a fair usage policy is] big enough to where if we did groom them during the busy time of the day, it would be a substantial [speed] lift for people,” he said. “I don’t think there’s a silver bullet in any of this – this is going to require us to think through a number of different areas.”

Better Internet for Rural, Regional and Rural Australia (a volunteer consumer group) shares horror stories about relying on satellite to solve rural broadband problems. (7:50)

A complaint from AT&T that the city of Lincoln, Neb. charged “high fees” that have “delayed its residents the benefits of AT&T’s small cell deployments,” was false and misleading, city officials tell the Federal Communications Commission.

AT&T is one of the chief proponents of industry-friendly national pole attachment and zoning reform, urging the FCC to issue a national policy that would override state and local authorities on pole attachment fees, cell tower and antenna placement, environmental/historic/tribal impact reviews, and paperwork requirements.

In short, AT&T wants to improve its chances of getting fast and inexpensive approval to place its wireless infrastructure in localities with time limits on public input and local reviews.

But Lincoln city officials tell the FCC AT&T never even applied.

“A review of our records fails to reveal any permit applications filed by AT&T for such as deployment,” Lincoln officials wrote. “That means that AT&T either deployed without permission and unknown to the city, or AT&T provided misleading statements to the Commission. Lincoln has researched our rates, submitted them to national companies for evaluation, and as a result has signed small cell agreements with three different companies.”

Local officials around the country complain that the wireless industry is misrepresenting a handful of bad actors as indicative of rampant overcharging, and that a profitable, multi-billion dollar industry is seeking a government mandate to force preferential treatment for its infrastructure at below-market rates. Local government officials who hold a position on the FCC’s Broadband Deployment Advisory Committee issued a strong opinion that the wireless industry is getting a government-sanctioned benefit its competitors do not.

“It is unfair to prioritize one industry over all others in pricing the public rights-of-way and public infrastructure access,” the local officials advised. “Equal pricing of private access to public assets is especially a concern where there is no obligation for providers to serve all residents.”

Telecom companies in four states will receive almost 50% of the $1.488 billion the FCC has set aside in support to expand rural broadband service in unserved areas of 45 states.

Missouri ($254,773,117.90), California ($149,026,913.20), Oklahoma ($113,599,113.70), and Virginia ($108,923,612.60) were the only states to win more than $100 million each to expand internet access to a total of 257.436 residents, and many of the award winners are planning to offer fixed wireless service.

The FCC claims 713,176 homes and businesses will get internet service over the next six years from 103 different providers as a result of the auction, with half getting the option of 100 Mbps. An additional 19% will have gigabit service available. All but 0.25% will have at least 25 Mbps service available, meeting the FCC’s current broadband definition. Many of the providers will charge substantially for faster speed service, however. Some wireless ISPs offering fixed wireless service currently charge up to $999.95 a month for 100/100 Mbps service.

“The successful conclusion of this first-of-its kind auction is great news for the residents of these rural communities, who will finally be able to share in the 21st-century digital opportunities that broadband provides,” said FCC Chairman Ajit Pai. “By tapping the mechanisms of the marketplace, the Phase II auction served as the most appropriate and cost effective way to allocate funding for broadband in these unserved communities, bringing the highest-quality broadband services to the most consumers at the lowest cost to the ratepayer.”

The winners are a mix of phone, cable, satellite, and fixed wireless companies and several rural utility co-ops. The biggest recipient is Wisper ISP, a Mascoutah, Ill. company awarded over $220 million to expand its fixed wireless service in Arkansas, Illinois, Indiana, Kansas, Missouri and Oklahoma. Other significant auction winners include California’s Cal.net, a fixed wireless provider serving rural areas east of Sacramento as far as South Lake Tahoe and Commnet Wireless, LLC which provides cell service and fixed wireless in rural Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming.

Providers must build out to 40 percent of the assigned homes and businesses in a state within three years and increase by 20 percent in each subsequent year, until complete buildout is reached at the end of the sixth year.

The Connect America Fund Phase II auction is part of a broader effort by the FCC to close the digital divide in rural America. In addition to the funding that will provided by this auction, the Commission is working toward the launch of a $4.53 billion Mobility Fund Phase II auction to expand 4G LTE wireless coverage throughout rural America. And the Connect America Fund is in the midst of providing over $9 billion over a six-year period for rural broadband in areas served by large carriers.

For more information:

Files

• FCC Public Notice
• FCC News Release
• Attachment A: Winning Bidder Summary
• Attachment B: State Results Summary

This week, the FCC announced bidding has finished for the latest Connect America Fund (CAF) broadband subsidies auction.

Once again, the FCC gave first priority to incumbent phone companies to bid for the subsidies, which defray the cost of expanding internet access to homes and businesses otherwise unprofitable to serve. Nearly $2 billion was left on the table by disinterested phone companies after the first round of bidding was complete, so the FCC’s second round opened up the leftover money to other telecom companies.

Winning bidders will receive their portion of $198 million annually in 120 monthly installments over the next ten years to build out rural networks. In return, providers must promise to deliver one broadband and voice service product at rates comparable to what urban residents pay for service. The winning bids, still to be publicly announced, will come from rural electric and phone cooperatives, satellite internet providers, fixed wireless companies, and possibly a handful of cable operators. But much of the money overall will be spent by independent phone companies rolling out slow, copper-based, DSL service.

Because the total committed will take a decade to reach providers, rural Americans will likely face a long wait before what purports to be “broadband” actually reaches their homes and businesses.

While many co-ops will spend the money to expand their own homegrown fiber-to-the-home services, most for-profit providers will rely on wireless or copper networks to deliver service.

Telefónica Spain

Overseas, broadband expansion is headed in another direction — expansion of fiber-to-the-home service, with little interest in investing significant sums on furthering old technology copper wire based DSL and fixed wireless services. The expansion is moving so quickly, Verizon made certain to sign long-term contracts with optical fiber suppliers like Corning in 2017 to guarantee they will not be affected by expected shortages in optical fiber some providers are already starting to experience.

Virtually everywhere in developed countries (except the United States), fiber broadband is quickly crowding out other technologies, despite the significant cost of replacing copper networks with new optical fiber cables. If a provider is brave enough to discount investor demand for quick returns and staying away from big budget upgrade efforts, the rewards include happier customers and a clear path to increased revenue and business success.

Not every Wall Street bank is reluctant to support fiber upgrades. Credit Suisse sees a need for optical fiber today, not tomorrow among incumbent phone and cable companies.

“The cost of building fiber is less than the cost of not building fiber,” the bank advised its clients. The reason is protecting market share and revenue. Phone companies that refuse to upgrade or move at a snail’s pace to improve their broadband product (typically DSL offering 2-12 Mbps) have lost significant market share, and those losses are accelerating. Ditching copper also saves companies millions in maintenance and repair costs.

Canada’s Telus is a case in point. Its CEO, Darren Entwistle, reports Telus’ effort to expand fiber optics across its western Canada service area is already paying off.

“We see churn rates on fiber that are 25% lower than copper,” Entwistle said. “35% lower in high-speed internet access, and 15% lower on TV — 25% lower on average. We’re seeing a reduction in repair volumes to the tune of 40%. We’re seeing a nice improvement in revenue per home of close to 10%.”

Telus promotes its fiber to the home initiative in western Canada as a boost to medical care, education, the economy, and the Canadian communities it serves. (1:31)

Telus’ chief competitor is Shaw Communications, western Canada’s largest cable company. Fiber optics allows Telus to vastly expand internet speeds and reliability, an improvement over distance sensitive DSL. Shaw Cable has boosted its own broadband speeds and offers product bundles that have been largely responsible for Telus’ lost customers, until its fiber network was switched on.

In economically challenged regions, fiber optic expansion is also growing, despite the cost. In Spain, Telefónica already provides service to 20 million Spaniards, roughly 70% of the country, and plans to continue reaching an additional two million homes and businesses a year until the country is completely wired with optical fiber. In Brazil, seven million customers will have access to fiber to the home service this year, expanding to ten million by 2020.

Verizon and AT&T regularly ring alarm bells in Congress that China is outpacing the United States in 5G wireless development, but are strangely silent about China’s vast and fast expansion into fiber optic broadband that companies like Verizon stopped significantly expanding almost a decade ago. China already has 328 million homes and businesses wired for fiber and added another five million homes in the month of June alone. AT&T will take a year to bring the same number of its own customers to its fiber to the home network.

The three countries that are most closely aligned with the mentality of most U.S. providers — the United Kingdom, Australia, and Germany — are changing their collective minds about past arguments that fiber to the home service is too costly and isn’t necessary.

The government of Martin Turnbull’s cost concerns forced a modification of the ambitious proposal by the previous government to deploy fiber to the home service to most homes and businesses in the country. That decision to spend less is coming back to haunt the country after Anne Hurley, a former chief executive of the Communications Alliance involved in the National Broadband Network (NBN), admitted the cheaper NBN will face an expensive, large-scale replacement within a decade.

ABC Australia reports on findings that the country’s slimmed-down National Broadband Network is inadequate, and parts will have to be scrapped within 5-10 years (1:37)

Turnbull’s government advocated for less expensive fiber to the neighborhood technology that would still rely on a significant amount of copper wiring installed decades ago. The result, according to figures provided to a Senate committee, found only a quarter of Australians will be able to get 100 Mbps service from the NBN, with most getting top speeds between 25-50 Mbps.

Despite claims of technical advancements in DSL technology which have claimed dramatic speed improvements, Hurley was unimpressed with performance tests in the field and declared large swaths of the remaining copper network will have to be ripped up and replaced with optical fiber in just 5-10 years.

“If you look around the world other nations are not embracing fiber-to-the-[neighborhood] and copper … so yes, it’s all going to have to go and have to be replaced,” she said.

In the United Kingdom, austerity measures from a Conservative government and a reluctant phone company proved ruinous to the government’s promise to deliver “superfast broadband” (at least 24 Mbps) over a fiber to the neighborhood network critics called inadequate from the moment it was switched on in 2012. The government had no interest in financing a fiber to the home network across the UK, and BT Openreach saw little upside from spending billions upgrading the nation’s phone lines it now was responsible for maintaining as a spun-off entity from BT. In 2015, BT Openreach’s chief technology officer called fiber to the home service in Britain “impossible” and too expensive.

Two years later, while the rest of Europe was accelerating deployment of fiber to the home service, the government was embarrassed to report its broadband initiative was a flop in comparison, and broke a key promise made in 2012 that the UK would have the fastest broadband in Europe by 2015. Instead, the UK has dropped in global speed rankings, and is now in mediocre 35th place, behind the United States and over a dozen poorer members of the EU.

What was “impossible” two years ago is now essential today. The latest government commitment is to promote optical fiber broadband using a mix of targeted direct funding, “incentives” for private companies to wire fiber without the government’s help, and a voucher program defraying costs for enterprising villages and communities that develop their own innovative broadband enhancements. The best the government is willing to promise is that by 2033 — 15 years from now — every home in the UK will have fiber broadband.

Deutsche Telekom echoed BT Openreach with claims it was impossible to deliver fiber optic broadband throughout an entire country.

Deutsche Telekom’s dependence on broadband-enhancements-on-the-cheap — namely speed improvements by using vectoring and bonded DSL are increasingly unpopular for offering too little, too late in the country. Deutsche Telekom applauded itself for supplying more than 2.5 million new households with VDSL service in 2017, bringing the total number served by copper wire DSL in Germany to around 30 million. The company, which handles landline, broadband and wireless phone services, is slowly being dragged into fiber broadband expansion, but on a much smaller scale.

In March, Telekom announced a fiber to the home project in north-east Germany’s Western Pomerania/Rügen district for 40,000 homes and businesses. The network will offer speeds up to 1 Gbps. In July, Telekom was back with another announcement it was building a fiber optic network for Stuttgart and five surrounding districts Böblingen, Esslingen, Göppingen, Ludwigsburg, and Rems-Murr, encompassing 179 cities and municipalities. But most of the work will focus on wiring business parks. Residents will have a 50% chance of getting fiber to the home service by 2025, with the rest by 2030.

In contrast, the chances of getting fiber optic broadband in the U.S. is largely dependent on which provider(s) offer service. In the northeast, Verizon and Altice/Cablevision will go head to head competing with all-fiber networks. Customers serviced by AT&T also have a good chance of getting fiber to the home service… eventually, if they live in an urban or suburban community. Overbuilders and community broadband networks generally offer fiber service as an alternative to incumbent phone and cable companies, but many consumers don’t know about these under-advertised competitors. The chances for fiber optic service are much lower if you live in an area served by a legacy independent phone company like Frontier, Consolidated, Windstream, or CenturyLink. Their cable competitors face little pressure to rush upgrades to compete with companies that still sell DSL service offering speeds below 6 Mbps.

CAF funding from the FCC offers some rural areas a practical path to upgrades with the help of public funding, but with limited funds, a significant amount will be spent on yesterday’s technology. In just a few short years, residents will be faced with a choice of costly upgrades or a dramatic increase in the number of underserved Americans stuck with inadequate broadband. Policymakers should not repeat the costly mistakes of the United Kingdom and Australia, which resulted in penny wise-pound foolish decisions that will cost taxpayers significant sums and further delay necessary upgrades for the 21st century digital economy. The time for fiber upgrades is now, not in the distant future.