Migration From Wireless to Wired Networks During the Pandemic--It's More Than the Squint Factor

One small silver lining in the Covid-19 virulent cloud: an unsponsored and truly unbiased empirical test whether wireless broadband networks offer a direct competitive alternative to wired broadband.  The answer is clear: No.  Not even close.  Despite all the happy talk and sponsored researcher advocacy, broadband consumers understand the financial incentive to use Wi-Fi access to wired broadband wherever available.  When homebound consumers have access to wireless broadband access via their smartphones and wired broadband access via personal computers and Wi-Fi, they opt for the latter.  It makes sense both in terms of the user experience and the pocketbook.

Since 2017, FCC Chairman Pai brazenly has asserted that wireless broadband networks constitute a direct competitive alternative to wired options.  Here’s an example:

“I think we are increasingly going to see that wireless is not this ‘imperfect substitute’ for wired connections. . . .It is going to be the dominant means, the preferable means, by which people access the Internet.” Eggerton, Pai: Wired, Wireless Appear Very Competitive To Him https://www.multichannel.com/news/pai-wired-wireless-appear-very-competitive-him-412652.

This assertion supports his longstanding goal of deregulating early and often on grounds that the marketplace forces discipline and self-regulation without the need for government involvement.  If the FCC can determine that broadband access nears ubiquity, then the need to seek a remedy for “universal access” problems no longer exists.  Section 706 of the Telecommunications Act of 1996 requires the FCC to assess broadband accessibility and remedy inadequacies.  The FCC, and Chairman Pai in particular, has stated “mission accomplished,” having concluded since 2018 “that advanced telecommunications capability is being deployed on a reasonable and timely basis.”  See 2019 Broadband Deployment Report, ¶2; available at: https://docs.fcc.gov/public/attachments/FCC-19-44A1.pdf; and the 20^th Wireless Competition Report to Congress (2017); https://docs.fcc.gov/public/attachments/FCC-17-126A1.pdf (concluding that the wireless marketplace is robustly competitive).

            If the FCC has done its job fully and fairly, without bias and a preordained result in mind, it stands to reason that more hours at home would increase broadband consumption, but would not significantly shift the allocation of time between available broadband options, absent statistically significant reasons to do so. 

Today’s New York Times contains a credible analysis of broadband recent broadband consumption patterns; see https://www.nytimes.com/interactive/2020/04/07/technology/coronavirus-internet-use.html.  The Times reports both significant increases in broadband consumption and a shift from app-based access via smartphones to dot com, web site access via computers.  The authors of the article simply attribute the shift to eye squint reduction: why view Netflix on a smartphone screen when a high definition television is available?  This makes absolute sense, but there are other factors in play, particularly given the fact that smartphone users also can create a wireless broadband “hotspot” and “sling” video content to their television sets.

If you are still with me, I’ll offer several additional factors that explain the migration from wireless to wired broadband access at home and possibly help dispel recurring myths (mistruths) about the current broadband marketplace in the U.S.

Near 100% Smartphone Market Penetration Does Not Translate into Smartphone Use Anytime and Anyplace

            Most smartphone owners ration their broadband use, quite mindful that exceeding a data plan, using the device too often, or trying to log on during congestion at the closest tower will have harmful and possibly costly impacts.  Data plans establish a broadband consumption ceiling, which if exceeded will result in degraded service—so called throttling—and in some cases termination of service. A deep dive on the service terms and conditions of “unlimited” data plans typically reserves to the carrier the option of discontinuing service to so called bandwidth hogs.  Even less consumptive subscribers face the throttling if they unintentionally seek service at a time and from a tower where the carrier determines congestion exists.

            The wireless consumer response to the Covid-19 also shows that poor subscribers are reluctant to use their handsets for broadband, even for remote access to school lessons.  See, e.g.,

https://www.nytimes.com/2020/04/06/us/coronavirus-schools-attendance-absent.html.  There seems to be plenty of instances where rural access does not exist, or frequently gets congested and where families cannot afford to pay, despite the remote education opportunities available.

            Unlimited Access Does Not Mean Without Limitation and Adverse Consequences

            Wireless broadband subscribers have come to understand that carriers use the term unlimited to mean limited.  How else could AT&T, for example, offers at least three flavors of broadband access; “Unlimited Starter;” “Unlimited Extra;” and “Unlimited Elite.”  Is anyone surprised that the small print imposes limits to unlimited consumption?  See https://www.att.com/plans/unlimited-data-plans/.

            The Disconnect Between the 5G Promised Land and Now

            There may come a day when 5G offers a rising tide for all ships, thereby eliminating the need for data plan caps, network neutrality, wired broadband connections and the old school terrestrial Public Switched Telephone Network.  That time is not now.  Where the rubber meets the road right now, wireless subscribers have to make do with 4G networks that can experience congestion, especially now with rising peak demand, are metered and rationed and have serious limitations on broadband performance.

            Just now, the 5G solution appears overhyped in terms of likely performance enhancements, time to market and cost.  5G handset prototypes appear to generate more heat and deplete batteries faster than previous models and some current service trials have actual signal propagation far less than anticipated and advertised; see, e.g.,   : https://arstechnica.com/gadgets/2019/07/the-latest-barrier-to-5g-speeds-the-summer/; https://venturebeat.com/2018/07/30/huaweis-first-5g-phone-reportedly-guzzles-power-needs-big-heatsink/. McKinsey and Company, a major global consulting firm, reports that consumers cannot expect significant 5G commercial service to start until 2022 at the earliest; see https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/cutting-through-the-5g-hype-survey-shows-telcos-nuanced-views. Lastly, the first 5G rate plans cost more.

            Inconvenient truths.