But Isn’t 5G Cheaper?
The club wielded by 5G advocates over fiber-to-the-home networks is a combination of speed to service and costs; it must be cheaper and quicker to have one antenna serve tens of homes over the air than connect each home to a new fiber optic line, and the air does not need to be broken up and then repaired in areas where a fiber optic line must be routed under streets and sidewalks and through concrete walls into homes. At face value we must admit the truth of such a claim, indeed the allure of such a claim. Anyone at Verizon will have horror stories of getting under sidewalks and through walls and up elevator shafts in apartment buildings during its deployment of FIOS.
But the argument, while not fully impeached, does suffer from a few factors. One is that the antenna and the Core Network are costs not incurred by a fiber-to-the-home network, and they are not insignificant. A $20,000 antenna (we guess at the price including installation) must actually serve more than 40 homes to break even against the $500 it typically costs to pull a wire from a pole into a home (both must supply home electronics—transceivers and WiFi routers), which will be the most common connection in America with 175 million telephone poles. At 50% take rate, the antenna must cover 80 homes. If antennas must be located 300 feet apart, it may take three or four such antennas to actually cover 80 homes, and the nod goes to fiber networks. There is then the question of each carrier supplying its own antennas (the likely outcome without public policy changes). Now each antenna is splitting the market into smaller pieces. If three per cell area, the $60,000 investment starts to look a lot like a losing proposition compared to fiber optics.
Secondly, antennas have active components and mechanical parts with much higher failure rates than passive wiring; any fiber-to-the-home network will be more reliable than any alternative. Thus recurring costs favor fiber-to-the-home networks. Over a twenty-year span recurring costs will approach capital costs, hence a figure not to be discounted. Thirdly, the variability of existing mobile networks is much greater than the variability of wire-line networks. 4G can be as high as 210 mbps and as low as 5 mbps, depending upon many factors but network traffic stands top of the list. We grant that, in the early phases of 5G, network variability will be much less as 5G capacity is so much greater than 4G. But when each antenna is trying to talk to 50,000 devices and support autonomous vehicles, smart city traffic conditions, and medical applications that cannot tolerate variations in latency and rate, there would seem to be a time downstream when the perils of 4G creeps into 5G, where the only anodyne is the only anodyne for 4G now—more antennas to create greater network density, each antenna now asked to do less work.
Finally, the killer problem with the argument favoring 5G costs is time. It is one thing to argue for its superiority as a network in theory, quite another to argue for its superiority when it doesn’t exist. Having a network with modest speed increases for fixed wireless in parts of fewer than 40 cities, none in the northeast yet, does not a national network with full 5G capacity make. America has more than 19,000 communities, more than 2.5 million miles of maintained roadway, and 175 million telephone poles. We are not privy enough to internal design and release schedules to project when the first fully compliant network will be installed somewhere, but the difficulties would make 2025 a sensible guess. From there to a national network must be a decade, even with many miles of fiber optic cabling installed during early trials. The current push for fiber-to-the-home networks will have most of America wired by that time.
