Will Wireless ever Replace Broadband?

Mark Lowenstein / January 25th, 2017

It’s 2020. 5G wireless is being rolled out, with speeds exceeding 10 Gbps, latency below 1 millisecond, and the ability to accommodate vastly more traffic and connections. Will the average household, which doles out some $400 monthly for mobile, pay TV, and broadband today, be able to go wireless only?

The thought is enticing. This could be Cut the Cord 3.0. Version 1.0 cut the landline phone in favor of wireless only, which nearly 50% of households have already done. Version 2.0 has been about cutting the cable (pay TV) cord and going internet only for TV content. It’s happening slowly but steadily. With the 4G LTE and ultimately 5G roadmap promising speeds and latency as good as or exceeding today’s fixed broadband, might customers ultimately look to cut the wire that delivers fixed broadband?

This possibility might get a serious test drive in 2017. Verizon Wireless, which has developed some of its own “pre-5G” specifications, plans to test fixed wireless access in as many as ten cities this year. This would involve getting fiber or other ‘broadband’ infrastructure to within a couple of hundred meters of a household and then use wireless for the proverbial “last mile”. This approach has a lot of appeal to a company like Verizon. First, it allows them to bring broadband service to households without building fiber to every dwelling, the cost of which has slowed the rollout of FTTH services from FiOS to Google Fiber. Second, it allows Verizon to potentially offer a competitive broadband service outside its ‘landline’ footprint. This is compelling because, while the mobile market is very competitive with four national providers, broadband is a near monopoly in many U.S. markets and average speeds are decidedly middle of the pack when compared to other developed economies.

In addition to Verizon, a company called Starry, founded by the folks who did Aereo, has raised $60 million to build out a competitive broadband service using wireless. They’re currently testing in Boston using 28 GHz spectrum, which is one of four bands the FCC has allocated for 5G services. As another example, Redzone Wireless, a Wireless Internet Service Provider (WISP), is offering a “5GX” service to some areas in Maine, using a combination of LTE Advanced capabilities and unlicensed (Wi-Fi) spectrum, promising households average download speeds of 50 Mbps, for $80 per month.

This certainly bears watching. What are the barriers to Cutting the Cord 3.0? The most significant relates to the intertwined challenges of wireless capacity and economics. A typical wireless user consumes about 4 GB per month at an average retail price of roughly $10 per GB, all things considered. Let’s call that 10 GB for a 2.5 person ‘household’. Now, a typical Netflix-watching broadband household consumes some 250 GB per month. That’s a big delta between fixed and mobile consumption.

Mobile operators are acquiring more spectrum and investing in 5G in order to accommodate ~8-10x more traffic, circa 2020. But we should also consider there will be growth in fixed broadband usage too, with 4K, virtual reality, and so on coming down the pike. It’s not inconceivable that a broadband household could approach 1 terabyte (TB) of average monthly use within the next 3-5 years. That would be a tough number for wireless to digest, even with the technology being developed for 5G. Plus, that’s an awful lot of capacity the mobile operators would have to somehow build (or lease) within a few hundred meters of a home or building.

Wireless economics is a related challenge. It costs a wireless operator like Verizon $1-2 to deliver a GB of traffic to a consumer. That’s why everybody’s ‘unlimited’ plan comes with an asterisk, usually kicking in when usage exceeds 25 GB or so. One would have to take a pretty big whack at the costs of delivering those wireless GBs in order to get into the broadband neighborhood. Even if we chop the low-end of today’s $ per GB delivered by half, the math remains challenging.

A final issue many bring up is how do you get the equipment, which might look like a small dish or box, into a building or household? This is something folks have heretofore been hesitant to muck around with. I see this as the least of the barriers. After all, over the past few years, people have become more comfortable installing Nest thermostats, fancier Wi-Fi routers, mesh networks, and femtocells in their home. The equipment piece will sort of look like that by the time these services are ready for prime time.

I think there’s potential here but it might initially be focused on particular market segments. The lowest hanging fruit would be in rural areas, where mobile/internet coverage is currently lacking or sub-par. If we can get enough capacity close to a building, fixed wireless access might be a great solution. Another segment might be the burgeoning multiple dwelling unit (MDU) market, which has been a challenge for broadband anyway. This seems to be one of the target markets for companies like Starry. A third and potentially vital market segment might be households that are budget-challenged. $400 per month for today’s cocktail of mobile, pay TV, and broadband is a tough financial nugget for a lot of households. There’s definitely room for the “Metro PCS” or “Cricket Wireless” of broadband, offering a compelling plan, combining fixed and mobile, with some limits on broadband speeds and consumption, particularly during peak times (to address the ‘Netflix’ problem). Lord knows we could use some competition and pricing options in the broadband world.

One final consideration is how the industry structure might evolve to deliver on this vision. Comcast is aiming to get into wireless, through both an MVNO and apparently having also spent several billion dollars in the recent 600 MHz spectrum auctions. The wireless operators will be reliant on cable and other providers for small cell sites, capacity, and backhaul, in order to build 5G. Then there’s DISH which owns a treasure trove of spectrum that will have to be put to work at some point during our lifetime. And all the big internet players, from Netflix to Amazon to Facebook and Google, are playing in the 5G sandbox in some capacity thinking that, at some point and to some extent, they will need to be at least partial masters of their own network domain. And there’s been a very active M&A market in the fiber biz of late.

So while we are not yet forecasting a significant shift toward Cutting the Cord 3.0, this is the year discussions on the issue will get a serious start.

Mark Lowenstein

Mark Lowenstein is Managing Director of Mobile Ecosystem, an advisory services firm focused on mobile and digital media. He founded and led the Yankee Group's global wireless practices and was also VP, Market Strategy at Verizon Wireless. You can follow him on Twitter at @marklowenstein and sign up for his free Lens on Wireless newsletter here.
  • obarthelemy

    I doubt it except in edge cases, because wireless is, to a much higher degree than wire, subject to a) congestion b) degradation w/ distance. That second one especially means 4/5G requires a tower to be close by… and if a tower is close by, running a wire to your house isn’t a lot of work, especially with electrical wires (and landlines in most countries, though US carriers are trying to renege on their obligations) already hooked up to each home.

    Counting on tech to solve a policy problem in rarely successful. If you want competition and lower prices, look at what other countries have done to get just that. It’s very well documented.

    • I see this as less of a policy issue and more of an economic issue. If wireless was ubiquitous, fast, and unlimited data consumption, would you have a wired connection at all? Clearly we’ll never get there, but we’ll get closer, and I’d argue that there are a lot of HH that are having trouble affording BOTH.

      • obarthelemy

        But reciprocally, if xDSL/Fiber was $30/mo including all the basic stuff (*) as it is in most of Europe, would the need for a substitute to Cable/dsl/fiber be that pressing ?

        That was achieved via policy, not economics: force infrastructure sharing, force transparent pricing, limit unfathomable contractual entanglements, foster competition. And suppliers are faring OK, after some consolidation (we’re down to 4 national ISPs + some regional/vertical, from 20+ back in dial-up days).

        Again, policy is the issue. Not economics, not technology. As long as the US is a patchwork of local monopolies with weak consumer advocacy + rights, US consumers will get shitty deals. Pipedreams about tech aren’t the solution and hand-waving about economics are just a cop out.

        (*) that’s including taxes and all fees and is the sum total of what I pay each month to my ISP+telephony+TV provider for:
        – unlimited data
        – basic TV channels + timeshifting
        – basic landline phone service – or not so basic, mine is unlimited including landlines+mobiles in France and about 100 countries,
        – even radio
        – mine is nice and gives away a free 2h talk+unlimited texts wireless contract with each ISP subscription.

        • Vadim Dumin

          We need to remember that a population density of the US is 3.5 times less than France and it means more towers/cable to cover all the subscriber base.

          • obarthelemy

            That’s a red herring. 3 states have 3-4x the pop. density of France, 10 states have similar or higher, yet the US ISP situation is rotten even in those states, even though ISP are regulated and managed mostly at the state level.

          • Vadim Dumin

            The regulation mandates that the prices have to be the same nationwide in rural areas/cities. The situation in Europe may have something to do with EU regulations as well.

          • obarthelemy

            Sorry I deeply edited my first answer to you while you were typing this one ^^ Urban/rural ratio is the same across the board.

            The way they solved the rural issue in France is by a) national/regional subsidies in extreme cases, b) having ISPs agree on a fixed cost ($80k) to set up ADSL in areas where it’s not economically viable, funded by locally each county/village (or rather its French equivalent), often w/ subsidies too.

            Also, price equality ionly applies where service is actually offered. If there’s no xDSL, Wimax and Satellite are more expensive possibilities (and still at much lower prices than in the US ^^)

          • Vadim Dumin

            The fiber installation is expensive. Google pulled out of Fiber by themselves due to the costs. I doubt municipalities have much interest/capabilities in ADSL/Fiber.

          • obarthelemy

            Fiber installation is made a lot more expensive by the various stonewalling tactics used by the incumbents ( http://arstechnica.com/tech-policy/2016/10/charter-like-att-sues-louisville-to-stall-google-fiber/ , http://www.dslreports.com/shownews/ISPs-Also-Blocking-Google-Fiber-Pole-Access-in-California-136481 , …)

            Some, few indeed, municipalities wanted to do it themselves. Telcos used their lobbying power at the state level to make sure it didn’t happen (http://www.extremetech.com/extreme/197567-missouri-attempts-to-ban-municipal-broadband-as-white-house-pushes-to-void-the-same-restrictions , http://motherboard.vice.com/read/the-21-laws-states-use-to-crush-broadband-competition ).

            And that was before the Trump administration, the coming years should be fun… from the outside ;-p

            Again,, one of the basic moves to free up the market was forced infrastructure sharing. Not only not preventing competitors to install their lines, but actually having to lease your own lines to them at a reasonable price, as quid pro quo for having privileged access to poles and ducts and coverage subsidies.

          • Vadim Dumin

            “And that was before the Trump administration, the coming years should be fun… from the outside ;-p”

            I would not be so glad to see it from the outside either. If the technology advancement stumbles due to the new US government, the waves of it will reach across the ocean in no time. The thing is that the US has been a bedrock for the innovation for many years (of course until its innovations had not been regulated out by EU bureaucrats :-b).

          • obarthelemy

            Which innovations do you think are being regulated out by EU bureaucrats ? DSL and Fiber and 3G and 4G penetration is much higher and prices are much lower on this side of the pond …

            More expensive doesn’t mean more innovative or better, it just means more expensive ;-p The main tenet of the Free Market is that competition foster innovation. If your market gets gummed up in monopolies (technical and/or political, in the US case, both), the impetus to compete (on price, features, quality, service,…) is lost. See Joe’s anecdote above.

          • Vadim Dumin

            We don’t have monopolies, we just have a limited number of incumbents because the costs are so high for the infrastructure deployment (on a national level), that not too many companies can compete on price, quality and service. Municipalities can only do so much and with heavy subsidies and the government is trying to avoid the need to subsidize if businesses can do the same in a Free Market without subsidies.

            I am referring to Google EU anti-monopoly suit, which doesn’t have a lot of merit in my view and just impedes the technological development in Europe.

          • obarthelemy

            The Google-EU monopoly suit has nothing to do with telcos, and has the same merit as the MS suit way back when, about using dominance in one market to eradicate competition in neighbouring ones + nascent competition in the main one. It’s at least worth being looked into.

            Back to telcos/cable, at the local level you mostly have monopolies, and at the national level you have an oligopoly. And ridiculously high prices combined with inferior service across the board. That’s not a sign of a free market.
            Also, to me, Free Market means free as in if citizens/consumers/municipalities want to enter the market, they should be free to do so. The US brand of free is cozy monopolies enforced by market dominance and laws/regulations aimed at entrenching incumbents, not freeing the market. The very fact that laws are being enacted to prevent new entrants sums up how free the US market is.

          • Vadim Dumin

            Free market to me is a market solely guided by the law of supply and demand without any regulation. Also, I am not strictly anti–monopoly. If you look at American history, this country was built by monopolists such as Rockefeller, JP Morgan, Vanderbilt during industrial revolution. I believe “some” competition is good for the economy, but not too much competition. Consumers get confused when given too much choice.

          • obarthelemy

            1- once you get a monopoly or oligopolies, supply and demand no longer applies. If I have a monopoly on your air supply, I can force you to buy anything else from me too ^^
            2- supply and demand, like money, has no smell. Public suppliers aren’t non-free-market per se.
            3- “no regulation” never exists. The question is whether regulations entrench incumbents, or ease the way for new entrants.
            4- Consumers are confused by complicated things, whether monopolistic or free-market. An opaque contract in legalese backing an opaque sale with hidden fees and lock-in is more complicated than our managed “price must include all costs, commitments must be stated, can’t exceed 2yrs, and must be allowed to buy out of for the proportional remainder” across the board.
            5- the country was also fairly destroyed by monopolists, see banana wars, etc. Also, causality is dubious, the US was also built on aboriginal slaughter, slavery, civil war… do you want those back too ?

          • Vadim Dumin

            In a light of a new data I have to do more checking and maybe rethink my opinion. I thought the margins on broadband are really small and that’s why the quasi-monopolies don’t have much of a headroom and the prices are fair.

          • obarthelemy

            Wow. This is more outrageous than I thought.

          • jfutral

            Maybe. I live in a “transitional” neighborhood. We were lucky to get Comcast. Then Google Fiber pulled in and staked a claim (still are, I’m sure on contingency, though not sure how that will all play out) and all of a sudden both AT&T and Comcast can’t roll out Gb in our neighborhood fast enough. [eta: and we couldn’t even get regular AT&T Uverse before.]


          • Another aspect in Europe is the density of their major cities. We don’t have that in the U.S., with the exception of a few (NYC, Boston, SF, a few others). Places like Phoenix, Dallas, Atlanta…much tougher.

          • obarthelemy

            For having sold network installs in Paris, and seen what has to get done, I assure you too much room is often way easier and cheaper to handle than not enough.
            Ditto more modern buildings – anything post WWII is much easier to deal with than older stuff, and the older, the worst. I once had to quote wiring for a medieval building, getting the *estimate* would have cost me a few grands, my boss didn’t approve it (we were obviously a filler quote).

          • obarthelemy

            Topical quote from Ars Technica today: “anyone who thinks caps aren’t a pure revenue play should send me an e-mail, because I’ve got a bridge to sell you, cheap!”

  • Glaurung-Quena

    So we should replace our current broadband near-monopoly, consisting of a handful of greedy companies that massively overcharge for internet access, have made customer dis-service into an art form, and seem to regard human beings as inconvenient appendages to a monthly bank transfer… with a different near-monopoly of even more greedy companies that overcharge even more for their services, are even more customer hostile, and give every indication that they regard human beings as vermin to be exterminated. Great idea!

    You should try getting a job at a new startup called skynet, I hear they’re looking for people with your outlook on things.

  • klahanas

    Why does it have to be either/or?

    Should one form of tech be vastly superior to the other, could it not make sense to move the more demanding jobs to the more superior tech, leaving the more mundane to the other?

    Is this a means of keeping net neutrality alive and well, since the demand won’t be constrained? That alone, would be worth it.

  • Space Gorilla

    We live pretty much in the middle of nowhere in Canada and use two wireless solutions. The first is satellite which is good but of course lags. For most use cases the lag is no problem. Our second network is fixed LTE to a tower 15 km from our house with great line of sight (the provider has a 100 ft tower and we have a 60 ft tower). It’s a bit slower than satellite but no lag at all, fine for games like Overwatch (which won’t work on satellite, not properly). The satellite service is data capped, the fixed LTE is unlimited (Netflix et al works great) and from a small provider that can put up towers at low cost and can therefore manage the pipeline much better. Both internet services are up and more than fast enough pretty much all the time. I can’t remember the last time we had an issue with either service. This wireless situation is very much improved from just two or three years ago, both fixed wireless and satellite have improved tremendously. We also have a cell signal booster on a smaller tower allowing us to ditch land lines for phone service. And TV is of course satellite (but that’s still a bundled rip off).

  • Vadim Dumin

    I am deeply skeptical about 5G. Isn’t the range at 5G frequencies is about 2 feet? Wouldn’t it lead to economical and deployment nightmare where every light pole in a sight will be crowned with an antenna?

    You can’t beat the physics. Wireless is much more limited then optical broadband in terms of a speed at range. And with the traffic going up as you suggest FTTH may be the only solution.

    • Agree. This is an issue that has not gotten enough attention. Look how much difficulty the carriers are having today deploying small cells at any scale!

    • Ken Telona

      “Isn’t the range at 5G frequencies is about 2 feet?”

      Mark Lowenstein mentions 28 GHz as one of four bands the FCC has allocated for 5G services.

      You need to know that 10 GHz had a range of at least 100 miles – and that was using 1950s technology.

      • Vadim Dumin

        “You need to know that 10 GHz had a range of at least 100 miles – and that was using 1950s technology.”

        The question I would like to ask is “at what speed”? It might be an analog network with speeds like 300bps, while 5G is supposed to be 10 to 20 Gbps. Moreover, the range of 5G network of 28Ghz is LOS (line-of-sight) only.

        This article for example claims that 5G range is in a range of a “few feet” only.

        • jsebean

          I have no doubt 100 miles can be achieved, I wouldn’t dispute that… this is done at great speeds today such as Ubiquiti AirFiber, but of course given the high frequency it demands it to be perfect Line of sight with an unobscured fresnel zone. Face it… unless you live in a very large metro area, you’re not going to have perfect line of sight to the tower.

      • You need to know that 10 GHz had a range of at least 100 miles – and that was using 1950s technology.


        What’s the speed at what range? So I may get 25mb/s at 100 feet from the tower but what about 100yards? 500 yards? etc.

  • Kumar Natarajan

    This article hit the nail on the head – wireless economics!! this is going to be the biggest challenge. At mmWave, coverage will be shorter, means many more towers and closer to the homes. What would be the number of homes covered vs internet revenue per home? this in my mind would determine success of broadband wireless.

  • jfutral

    For all the talk of speed advantages of broadband, how many people have a set-up to actually take advantage of it? What is the average speed of most of the wifi in their laptops and even desktops, never mind their phones and tablets. Many of the twenty somethings I know only use their phones, and a few their tablets. So they are opting for only wireless. This is not changing in our generation or even the next, but that third gen (depending on how old you are—third for me, probably next gen for some of you), they probably won’t understand why anyone would have paid twice.


    • klahanas

      Think multiple machines accessing at the same time. Need a wide pipe.
      Not just PCs and tablets and phones, but TVs too. And they can all be accessing high bandwidth media at the same time.

      • jfutral

        But wireless has made streaming content much more efficient, which was my earlier point about the iPhone effect. Higher quality at lower bandwidth needs. For companies like Netflix in a more uncertain net-neutrality world are going to keep pushing down how much bandwidth they actually need. They’ll have to for survival. So those multiple machines will need less bandwidth to do the same things. Besides, if everyone is in front of the TV, there will be fewer other devices needing high bandwidth while they watch.


        • obarthelemy

          Data burn is about 10GB per hour (or 20 Mbps) for x265 4K. Even staying at FHD. Those contracts better be unlimited indeed, and if you’re on LTE, you better be getting excellent signal.

          • jfutral

            I don’t argue that this isn’t our current condition. But I do argue that this condition will change. First that what technology does—smaller, faster, more for less, larger space-time ratio, etc., whatever. For the Netflix’s of the world now and in the future, it is their only chance at survival.

            Trump as president will no doubt let the ISPs (wireless and wired) throttle and cap/uncap to their hearts content, and no doubt they will come up with politically convincing business rationalizations that having nothing to do with customer happiness. They don’t have to. And since for broadband ISPs, like Comcast, they have monopoly markets. That’s the problem with being pro free-market in this discussion. There is no free market involved for much and even most of the US.

            And the trend is already starting of people questioning the necessity of two bills that accomplish the same purpose in the same location. That is what the question is, just as it was with landline/cell phone.

            And this is why Comcast should not own NBC/Universal. They will have no vested interest in releasing content in more compact, higher quality form. They would rather keep UHD streaming needs high to justify charging for broadband. The content creators’ purpose is to get their work out to as many people as possible. The gatekeepers’ purpose is to make people come to them for content. Comcast has no incentive to see video streaming made more efficient.

            (Crossing topics a bit with Jan’s article.)


    • obarthelemy

      Things change once you get over 20 something. With kids comes the need for videos and/or TV, then games, many online and/or with hefty downloads. With age, phones start to be awfully small ;-p

      • jfutral

        Both Bob and Jan, I believe, have done a couple of surveys of devices use by age group. I hope they continue to do some follow up to see how much of those trends are age specific and how much travel with the users habits. The 20 somethings I knew who are now thirty somethings haven’t changed their habits much. The twenty somethings I know are even less interested in either TV or PCs. They’ll have one laptop the way us older folks used to have one TV, for communal viewing. Drives me nuts.


  • Vaudevillainv

    10 Gbps / user in area.

    When cell towers are usually heavily subscribed to. That might be a problem. Also the price of bandwidth on the cell network is insane. On average I use 350gb a month. On the best wireless plan that would cost me around $1395 a month taxes out (I live in canada). Right now I pay under $70.

    Too much shinanigans by the companies on wireless as well, makes that product not usable for much else then one way transmission of info.

    • jsebean

      Bell and Rogers offer 100GB Data for $145. Telus offers even better prices in some rural parts of Western Canada with up to 500GB for ~$90 iirc (which I unfortunately can’t take advantage of) all on the LTE cellular network.

      • Glaurung-Quena

        “Bell and Rogers offer 100GB Data for $145”

        Or I can buy 200gb at 250mbps for $80 per month from teksavvy. No contest. And if I don’t need 250mbps, the price difference is even more stark. We currently pay less than $30 per month for 200gb of broadband, and we could have unlimited if we wanted for only $10 more.

        Wireless is not going to come anywhere near overcoming wired broadband until such time as the mobile providers massively scale back their profit margins. In other words, when hell freezes over.

        • jsebean

          Not an argument for replacing wireline, personally the article is a bit idealistic in that thought, though it’s interesting to toy around with. All I’m saying was the $1395/mo for 350GB is an exaggeration. The plans I posted are from big 3 providers, so that isn’t even counting smaller indie LTE networks. In practice today however, the higher bandwidth allotments from the wireless providers is only useful for rural areas for people who have the money and are willing to pay for it… in other words, people who can’t get TekSavvy and don’t want to rely on high latency satellite options.

          I think it signifies we’ll see better data plans on wireless as time goes on though. It’ll never replace wired service (the “perfect 5G world” will never be more than a dream for many given the high frequency propagation properties), but considering the data plans offered even ~1 year ago… it’s slowly going up hill. Emphasis on slowly.

  • Walter Lambert

    These folks cannot manage their networks today. What makes anyone think that because now they have more speed/bandwidth that they will be able to manage them any better? Beyond that, the price! Also, T-Mo relies more upon any Wi-Fi network I am attached to than their own network already. They charge me for their network but I rarely access it. And when it is my only option it rarely works well.

  • Matthew Roccella

    As Internet providers implement data caps and traditional TV providers raise prices, I see people going back to Over-The-Air TV and radio to save money.

  • Martin

    While the assumptions made are detailed and interesting, I think you are being super conservative on what can happen over 4 years, @marklowenstein.

    1 – The monthly average spending on services is not going to be close to 400/family. This is simply way too high.

    2 – The most significant factor is going to be cost to the customer. If it costs 200 for a month for wireless service vs 100 for wired service, the choice will be decided by economics. Also, the price for using the wireless connection as the main network at home would NEVER approach 10/GB! This doesn’t make any sense for a home-use case!

    3 – I see the industry going into the direction of optimizing connections to each user based on overall load – independent of application/service being used at the time. If a person pays more, they will have access to higher priority for all their data. In other words, they receive higher speeds at times when the network is congested. For people paying less, significant discounts may be given to those that experience very poor network quality.

    4 – Due to the ‘shared’ nature of wireless connections, I believe that the technology will essentially be offered cheaper to customers than wired connections for those subscribing to lower priority connections (lower guaranteed speeds). However, for high-end, quick speeds, the service costs will be higher than wired connections due to it being a more limited resource.

    At least, this is much more of the direction being taken in Europe… If you are coming from Verizon and have inside plans as to what is going to happen, then oh boy, there will remain quite a bit of room for competition!!!

  • We — household of four — get 75mbs speeds to my home via Comcast Xfinity and use about 350-500GB of data per month streaming Netflix/iTunes, playing games, and web surfing. Will Verizon LTE provide a stable alternative to the $65/month Comcast wire?

  • Kumar Natarajan

    Its not entirely a matter of what speeds customer can get and how much they’ll be willing to pay.
    Imagine if wireless broadband costs far less to install for the service operator compared to fiber. They’ll gladly replace fiber and copper with wireless, wouldn’t they ?

    And they could offer broadband service that is cheaper than traditional wireline broadband

Protected by Gerben Law