In Business Model, Internet Access, Spectrum

A recent study of 5G speeds by Opensignal found U.S. and U.K. speeds lagging those of several other countries that have deployed 5G. This actually is a fairly typical outcome, both early in deployment as well as later, when the networks are fully built out. You might wonder why. There is a a short-term answer and a long-term answer. The short-term explanation in the United States is that spectrum assets used to deploy 5G have used low band and millimeter wave, rather than mid-band spectrum. Millimeter provides very-high bandwidths, but takes a while to achieve coverage, while low-band provides good coverage, but limited bandwidth.

In the United Kingdom the story is the deployment of 5G using low-band spectrum, with mid-band and millimeter yet to happen at scale, though that is coming.

source: Opensignal

The long-term issue, at least for the U.S. market, is its continental size and the huge amount of rural and unpopulated areas. We often forget that six percent of the U.S. landmass is where most people live. About 94 percent of the land mass is unpopulated or lightly populated. And rural areas present the greatest challenge for deployment of communications facilities, or use of apps that require such facilities. Also, the U.S. mobile operators at present use very little mid-band spectrum, which has boosted 5G speeds in many markets. That problem corrects itself over time as new mid-band spectrum is deployed.

The “U.S. lags” story is quite typical. In fact, the “U.S. is behind” meme never goes away, where it comes to communications. The latest assertion in some quarters is that the United States is falling behind in 5G. That claim has been made many times about other key technologies and always has proven wrong.

In the past, it has been argued that the United States was behind, or falling behind, for use of mobile phones, smartphones, text messaging, broadband coverage, fiber to home, broadband speed or broadband price.

Consider voice adoption, where the best the United States ever ranked was about 15th globally, for teledensity (people provided with phone service). A couple of thoughts are worth keeping in mind. First, large countries always move slower than small countries or city-states, simply because construction of networks takes time and lots of capital.

With the caveat that some rural and isolated locations never got fixed network phone service, not many would seriously argue that the supply or use of fixed network voice was an issue of any serious importance for the nation as a whole, though it is an issue for rural residents who cannot buy it.

Some even have argued the United States was falling behind in spectrum auctions. That seems almost silly given the amount of spectrum not being released for use in the U.S. market, roughly an order of magnitude more spectrum than previously available for mobile services.

What such observations often miss is a highly dynamic environment, where apparently lagging metrics quickly are closed.

To be sure, adoption rates have sometimes lagged other regions.

Some assertions are repeated so often they seem true. Among such statements are beliefs that U.S. internet access is slow and expensive, or that internet service providers have not managed to make gigabit speeds available on a widespread basis. In fact, gigabit coverage is about 80 percent, but take rates might be as low as two percent.

Other statements, such as the claim that U.S. internet access prices or mobile prices are high, are not made in context, or qualified and adjusted for currency, local prices and incomes or other relevant inputs, including the comparison methodology itself.

Both U.S. fixed network internet prices and U.S. mobile costs have dropped since 2000, for example.

The bottom line is that it is quite typical for U.S. performance for almost any important new infrastructure-related technology to lag other nations. It never matters, in the end. Eventually, the U.S. ranks somewhere between 10th and 20th on any given measure of technology adoption. That has been the pattern since the time of analog voice.

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