Cole Crawford at Vapor IO is building a network designed to bypass the telco entirely. He's installed an "aggregation box" a hop or three from the towers. Iyad Terazi's Federated Wireless is ready to connect it with a dedicated radio in 3.5 GHz shared spectrum. That's natural for certain kinds of IoT. The speed will be much better than the carriers. Interesting stuff. Packet, MobiledgeX and others are ready with the hardware and software that will make it work. 

Cole gave me reasons he thought the telcos should buy in. Maybe. It's also possible services like IoT create enough of a niche to become profitable. Vapor says a single hub could serve hundreds of towers, which would bring the cost down. (I've asked how that would affect latency and am waiting to hear from the company. I would guess 3-8 ms with high performance gear but do not have data.)

What if Google, Amazon and a few others jump in to bypass the telcos? There's no evidence that's in their plans, but interesting talk. The software and programming talent at the web giants outclasses the ability of anywhere else. Google's network is the largest civilian system in history. It works well all around the world at an amazingly low cost. The scale dwarfs Deutsche Telekom, Vodafone, or AT&T. 

Zachary Smith of Packet supplies "bare metal" hardware for distributed computing. He's working with Vapor and also bigger companies like Sprint. Zac believes, "Technology enabled enterprises who use software + hardware as their weapon to delivery their value, will be dominant in the next decade." That could be right, although I wouldn't want to underestimate the ability of the telcos to fight back.

The world has gone to software, AI, big data, and the tools that start there.  Google is in a remarkable situation: they win even if they take a moderate loss. The carriers will fight back by improving their own networks. Anything that improves networks helps Google sell advertising.  

Other prospects include cable giants Comcast and Charter. Both have enormous teams working on their soon come 5G network. Currently, they are reselling Verizon, so expensive their losses are into the US$ billions. The easy assumption was that Charter and Comcast would work together, as they do with near nationwide Wi-Fi. That deal isn't final yet, however, nor do the two companies cover all the country.  

My first thought was video was unlikely to pay more than the (extremely low) rates of CDN's like Akamai. Once the movie starts, the latency is unimportant. Your home Wi-Fi is far more likely the culprit if you have a problem. Channel changing and lookup will be crisper, but I didn't think that would be sufficient unless the Edge Cloud owners would come close to CDN pricing.
     The market dynamics could change that, especially when AT&T's Time Warner and DirecTV extend their video on demand over the top. Subscription VOD is exploding. Netflix, Amazon, and Hulu are all growing rapidly. Disney, Comcast, and Time Warner will soon be fighting for customers. All will be looking for an advantage. 
Comcast and Charter have similar choices. Almost certainly they will soon build a 5G network, probably in 3.5-4.2 GHz. Comcast is already installing remote phys throughout its network. (Remote phys are small units, very close to the customer, which will enable upstream into the gigabits.) 
Would that win customers for video? I don't know, but I'm sure some are thinking about it. 
   

 

dave askOn Oct 1, Verizon turned on the first $20B 5G mmWave network with extraordinary hopes. The actual results the first four months have been dismal. Good engineers tell me that will change. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 4X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.

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5G Why Verizon thinks differently and what to do about it is a new report I wrote for STL Partners and their clients.

STL Partners, a British consulting outfit I respect, commissioned me to ask why. That report is now out. If you're a client, download it here. If not, and corporate priced research is interesting to you, ask me to introduce you to one of the principals.

It was fascinating work because the answers aren't obvious. Lowell McAdam's company is spending $20B to cover 30M+ homes in the first stage. The progress in low & mid-band, both "4G" and "5G," has been remarkable. In most territories, millimetre wave will not be necessary to meet expected demand.