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What You Don’t Know About 5G

Who wins 5G is more complicated than most people realize. Here’s what you need to know

China is winning the race to 5G!

Over recent months, you’ve likely noticed this fear popping up in headlines.

Just yesterday, The Wall Street Journal reported that a bipartisan senate panel is urging the White House to appoint a 5G coordinator.

Why exactly?

The eight senators said the role was vital to preventing the U.S. from falling behind on deploying the technology — seen as an economic and national security threat — while signaling to allies the seriousness of the administration’s commitment to the issue.

Okay, let’s slow down …

When we dig deeper, there’s actually something else going on here.

It’s not so much a 1-off “race” with the U.S. and China sprinting toward the same finish line …it’s more like a “battle” in which there are two different finish lines — the U.S. is running toward one while China races toward another.

Of course, whether the U.S. or China reaches its respective finish line first will play a huge role in which “race” the rest of the world decides to run … and that has major consequences.


Let’s dive in.


***Is U.S. 5G at risk of becoming the next BetaMax?

Younger readers might not remember, but long before On-Demand streaming video services … long before DVDs and LaserDiscs … there was BetaMax and VHS.

Beta and VHS were two competing videocassette formats. As such, their videotapes didn’t work on each other’s device.

I recall growing up, being aware of friends who were “Beta” families, while others were “VHS” families. Then, there was my one friend who had both Beta and VHS … which I viewed as the epitome of opulence.

Of course, it made no sense for the average family to own two different videotape players that did the exact same thing. So, it was inevitable that a “format war” would ensue, as these two technologies vied for home video supremacy.

It turns out VHS won, relegating Beta to the annals of runner-up history … though many claimed Beta’s technology was actually superior. Regardless, any companies or investors that had bet big on Beta suffered a major loss.


***We saw a similar type of format war as our cell phone technology developed


When cell carriers switched to 2G networks in the 90s, they chose between a handful of competing options. Over time, some of them lost out. But the two primary winners were CDMA (Code Division Multiple Access) and GSM (Global System for Mobiles).

Now, like BetaMax and VHS, you couldn’t cross from one format to the other. For example, if you have an older AT&T phone, this is the reason it won’t work on Verizon’s network.

Many U.S. carriers went with CDMA, while GSM was adopted by the rest of the world (some U.S. carriers went with GSM as well). But this division ended up being a firewall which made international travel tough.

Now, in theory, this CDMA/GSM division ended with 4G, also known as LTE. That’s because all carriers switched to a single, global standard for 4G. And this single standard was supposed to continue with 5G.

This brings us to today, and “5G race” everyone is talking about.

But as you’re about to see, this race actually has shades of a battle, similar to VHS and Betamax …

***The same format, but is it really?

This past spring, President Trump announced the largest-ever auction of radio spectrum as part of the U.S.’s 5G development.

You might recall him saying “we cannot allow any other country to out-compete the United States in this powerful industry of the future.” He went on to say that, by next year, the U.S. will “have more 5G spectrum than any other country in the world.”

But here’s what you likely don’t know about this …

Yes, this time around there’s a single global standard called 5G-NR. But within this standard, there are different options for the wavelength used as part of the 5G technology.

The 5G networks here in the U.S. are mostly being built on the higher frequency millimeter wave (MMWave) spectrum.

However, China and many European countries are building their 5G systems on lower frequency radio bands — the “sub-6” gigahertz spectrum.

Below is a graphic showing how, while it’s all “5G-NR,” there are different variations of it when you dig deeper.


Source: Slashgear.com


What this means is the U.S. is betting on a different 5G wavelength than China and much of the rest of the world … and that could lead to issues. After all, even though everyone will be using the same radio technology, thanks to frequency variations, “their” 5G networks might not play nice with “our” 5G network.

This isn’t just a “U.S./China” thing. According to PC Mag, there are already operability issues within the U.S. itself.

From PCMag:

The first 5G phones came out in April and May of 2019.

AT&T/Verizon and Sprint/T-Mobile are using two sets of very different radio channels for 5G. AT&T and Verizon are using high frequencies, Sprint is using lower frequencies, and T-Mobile is using a mix.

So while they’re all using common technology, the phones may not work on each other’s networks because they don’t have the right antennas to tune to each others’ channels.

This inoperability might be a foreshadowing of what’s to come between the U.S.’s version of 5G, and that of the rest of the world.

***So, what’s the difference in these spectrums and why are countries going after different ranges of bandwidth?

As you read the quote below, remember that the U.S. is focused primarily on developing the high-band mmWave 5G spectrum, while China and much of the rest of the world is developing low-band sub-6 frequencies.

From RCR Wireless:

High-band spectrum offers higher speeds and more capacity due to the amount of unused spectrum available at these frequencies, but mmWave is limited in geographic coverage needed for mobile deployments.

Low and mid-band wireless signals travel further and penetrate obstacles like buildings better than high-band spectrum.

Given this explanation, you might think that the U.S. choice to focus on the high-band spectrum is because it’s faster. Not so much …

Apparently, large volumes of the preferred, sub-6 spectrum are reserved exclusively for Pentagon use. This isn’t the case in China, where those frequencies are open for 5G deployment.

From Slashgear:

That has led to U.S. carriers focusing on mmWave, along with some limited sub-6 utilization.

“Because large swaths of the sub-6 bands in the United States are not available for civil/commercial use, U.S. carriers and the FCC (which controls civil spectrum in the US) are betting on mmWave spectrum as the core domestic 5G approach,” the (Department of Defense) study points out.

And this leads us to the core 5G problem. Again, from Slashgear:

The concern is that … other countries will push ahead with sub-6 and create a growing rift between international networks and device-makers, and the U.S.

In particular, Chinese companies like Huawei and ZTE will move to occupy spaces that might once have been dominated by American firms.

“This may bifurcate the global market and result in the majority of the world adopting 5G sub-6 technologies,” the study warns, “which will be dominated by the Chinese equipment and handset manufacturers.”

So, if 5G is a race, the U.S. might be winning, but are we running toward a different finish line than the rest of the world?

Or to put it another way, are we leading the charge toward BetaMax, while the rest of the world runs toward VHS?

***The recent decision by the FCC suggests the government is very aware of this danger


On Monday, we learned that the FCC is going to auction off some of the C-Band spectrum for 5G development.

What does that mean?

Well, C-band falls into the coveted “sub-6” category. This illustrates how our government is aware of the problem and wants to enable the U.S. private sector to develop technologies that sync with this bandwidth. So, at least with this auctioned bandwidth, we’re now running the same race as China.

Of course, how much of this spectrum the government (specifically, our defense agencies) is willing to hand over is yet to be seen.

It’s a complicated, but fascinating issue — one which we’ll continue to keep you up to speed on here in the Digest.

Have a good evening,

Jeff Remsburg

Article printed from InvestorPlace Media, https://investorplace.com/2019/11/what-you-dont-know-about-5g/.

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