Can wire­less chal­lenge ca­ble for home in­ter­net ser­vice?

Penticton Herald - - HOMES - By MAE AN­DER­SON

THE AS­SO­CI­ATED PRESS

NEW YORK -- Cel­lu­lar com­pa­nies such as Ver­i­zon are look­ing to chal­lenge tra­di­tional ca­ble com­pa­nies with res­i­den­tial in­ter­net ser­vice that prom­ises to be ul­tra-fast, af­ford­able and wire­less.

Us­ing an emerg­ing wire­less tech­nol­ogy known as 5G, Ver­i­zon's 5G Home ser­vice pro­vides an al­ter­na­tive to ca­ble for con­nect­ing lap­tops, phones, TVs and other de­vices over Wi-Fi. It launches in four U.S. cities on Mon­day.

Ver­i­zon won't be match­ing ca­ble com­pa­nies on pack­ages that also come with TV chan­nels and home phone ser­vice. But fewer peo­ple have been sub­scrib­ing to such bun­dles any­way, as they em­brace stream­ing ser­vices such as Net­flix for video and cell­phone ser­vices in­stead of land­line.

"That's the trend that ca­ble has been hav­ing prob­lems with for sev­eral years, and a trend that phone com­pa­nies can take ad­van­tage of," Gart­ner an­a­lyst Bill Menezes said.

That's if the wire­less com­pa­nies can of­fer a ser­vice that proves af­ford­able and ef­fec­tive.

T-Mo­bile and Sprint are also plan­ning a res­i­den­tial 5G ser­vice as part of their merger pro­posal, though few de­tails are known.

Ver­i­zon's broad­band-only ser­vice will cost $70 a month, with a $20 dis­count for Ver­i­zon cel­lu­lar cus­tomers. Ac­cord­ing to Le­icht­man Re­search Group, the av­er­age price for broad­band in­ter­net is about $60, mean­ing only some cus­tomers will be sav­ing money.

Even so, Ver­i­zon can try to win over some cus­tomers with prom­ises of re­li­a­bil­ity.

Ver­i­zon says its ser­vice will be much faster than ca­ble. That means down­load­ing a two-hour movie in high def­i­ni­tion in two min­utes rather than 21. The ser­vice prom­ises to let fam­i­lies play data-in­ten­sive games and watch video on mul­ti­ple de­vices at once, with lit­tle or no lag.

"The things that re­ally mat­ter to a cus­tomer are how fast it is and how re­li­able it is," long­time tele­com an­a­lyst Dave Burstein said. In tests of Ver­i­zon's 5G so far, he said, "re­li­a­bil­ity is prov­ing out quite nicely."

Ver­i­zon could also cap­i­tal­ize on many peo­ple's frus­tra­tion with their ca­ble com­pa­nies. Con­sumer Re­ports mag­a­zine says cus­tomers have long been un­happy with per­ceived weak cus­tomer ser­vice, high prices and hid­den fees.

The res­i­den­tial 5G ser­vice is part of a broader up­grade in wire­less tech­nol­ogy.

Ver­i­zon has spent bil­lions of dol­lars for rights to pre­vi­ously un­used ra­dio waves at the high end of the fre­quency spec­trum. It's a short-range sig­nal, ideal for city blocks and apart­ment build­ings, but less so for sprawl­ing sub­urbs or ru­ral com­mu­ni­ties. That's why Ver­i­zon is push­ing res­i­den­tial ser­vice first, while AT&T is build­ing a more tra­di­tional cel­lu­lar net­work for peo­ple on the go, us­ing ra­dio waves at the lower end.

AT&T is aim­ing to launch its 5G mo­bile net­work this year in 12 cities, in­clud­ing At­lanta and Char­lotte, North Carolina. Dish also has plans for a 5G net­work, but it's fo­cused on con­nect­ing the so-called "In­ter­net of Things," ev­ery­thing from laun­dry ma­chines to park­ing me­ters, rather than cell­phones or res­i­den­tial broad­band.

Sprint tried to in­tro­duce res­i­den­tial wire­less ser­vice be­fore, us­ing a tech­nol­ogy called WiMax, but it failed to gain many sub­scribers as LTE trumped WiMax as the dom­i­nant cel­lu­lar tech­nol­ogy. This time, Ver­i­zon is us­ing the same 5G tech­nol­ogy that will even­tu­ally make its way into 5G cel­lu­lar net­works.

The Ver­i­zon ser­vice will start in parts of Hous­ton, In­di­anapo­lis, Los An­ge­les, and Sacra­mento, Cal­i­for­nia.

"These are small ar­eas but sig­nif­i­cant," said Ro­nan Dunne, pres­i­dent of Ver­i­zon Wire­less. "Tens of thou­sands of homes, not hun­dreds of thou­sands of homes." Even­tu­ally, Ver­i­zon projects 30 mil­lion homes in the U.S. will be el­i­gi­ble, though there's no time­line.

For now, Ver­i­zon isn't plan­ning to hit mar­kets where it al­ready has its ca­ble-like Fios ser­vice. Ver­i­zon stopped ex­pand­ing Fios around 2010, in part be­cause it was ex­pen­sive to dig up streets and lay fiber-op­tic lines. Ver­i­zon can build 5G more cheaply be­cause it can use the same tow­ers avail­able for cel­lu­lar ser­vice.

That said, Ver­i­zon might not re­coup its costs if it ends up draw­ing only cus­tomers who stand to save money over ca­ble, said John Hor­ri­gan, a broad­band ex­pert at the Tech­nol­ogy Pol­icy In­sti­tute.

And while Ver­i­zon says the new net­work will be able to han­dle lots of de­vices at once, any­one who's tried to use a phone dur­ing con­certs and con­fer­ences will know that the air­waves can get con­gested quickly.

What Ver­i­zon's ser­vice won't do is ex­tend high-speed in­ter­net ac­cess to ru­ral Amer­ica, where many house­holds can't get broad­band at all, let alone com­pe­ti­tion. Ca­ble and other com­pa­nies haven't found it prof­itable to ex­tend wires to re­mote parts of the coun­try. But Ver­i­zon will face the same prob­lem, given that its short-range sig­nal will re­quire sev­eral wire­less tow­ers closer to­gether. That's fea­si­ble only in densely pop­u­lated ar­eas.

That's not good enough, said Harold Feld, se­nior vice-pres­i­dent of the ad­vo­cacy group Pub­lic Knowl­edge. He said in­ter­net ser­vice at rea­son­able prices is "fun­da­men­tal" for all Amer­i­cans -- not just those who live in pop­u­lated ar­eas.

T-Mo­bile and Sprint want to jointly cre­ate a 5G net­work that would also of­fer res­i­den­tial wire­less broad­band, but not for a few years. In seek­ing reg­u­la­tory ap­proval, the com­pa­nies say 20 per cent to 25 per cent of sub­scribers will be in ru­ral ar­eas that have limited ac­cess to broad­band. But the com­pa­nies of­fered no de­tails on how they would do so. T-Mo­bile and Sprint de­clined to com­ment.

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