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 20th 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.
