Investing in 5G and the next-generation, digital-age infrastructure

Consumers continue to “cut the cord,” replacing home cable with their mobile devices and internet-only applications to access their favorite content. However, these smartphones, smart TVs, and other devices need network access to support the delivery of video streaming and web-based content — and they need a network and digital infrastructure that can support the significant increase in digital entertainment and data consumption.

Via REUTERS

Rising demand for faster, more efficient network connections is pushing network operators to move toward 5th generation or “5G” mobile networks, the next generation of internet connectivity. 5G will be key to meeting the digital infrastructure needs of the future — it will run on a hybrid infrastructure of wireless and wireline networks working seamlessly to deliver the faster internet speeds to satisfy data-hungry consumers’ needs. But making the move to 5G a reality will require both increased investment by the capital markets in fiber network build-out and regulations that favor growth.

The innovation to support 5G infrastructure is moving through engineering standards bodies at a rapid pace — these are the key architectural changes needed to meet the network demands of all the proposed technologies on the horizon. Information technology companies that depend on network operations to deliver their applications and products need to participate in these standard-setting processes and the migration to the next-generation digital infrastructure.

While tech companies know the growth and expansion of the networks are paramount to their success in the digital future, there is a continued need to reinforce this idea to policymakers. Regulatory decisions have a strong effect on where money flows in the markets. For example, with the implementation of antiquated Title II (net neutrality) regulations on the internet by the Federal Communications Commission (FCC), investment in broadband dropped in 2016. Companies such as Intel, Cisco Systems, Qualcomm, and IBM have made public their concerns about Title II on the capital market investment in network build-out and noted Title II could result in a loss of up to $45.4 billion in capital investment.

The projected increase in network activity with high bandwidth consumption to deliver artificial intelligence, internet of things, and machine-to-machine (m2m) transactions won’t become a reality if there is a continued misunderstanding that innovation can only be at the edge of the internet and should not happen at the network level. If network traffic is controlled by the antiquated wireline regulatory barriers of the 1980s that do not recognize the need for speed and efficiency, these new types of services will be difficult to deliver to the end users.

As the FCC moves to repeal Title II regulations, it’s hard to understand why the rhetoric of net neutrality continues to have such a hold on the technology industry. The innovation promised by these new technologies will need access to the underlying next-generation networks. A recent analysis shows that hybrid networks creating 5G cellular when combined with more efficient broadband deployment “will result in almost three times the annual gain in wireless network capacity over the next 10 years compared to the average annual gain over the past two decades.” All technology that connects to the internet eventually depends on wireline backhaul support for its core interconnections to network operations that support their business models.

A recent RCRWireless report on transitioning to a 5G world notes 5G truly is a revolutionary step, but all of it depends on the infrastructure build-out — fiber is fuel for 5G. For the consumer, the boundaries will continue to blur between using Wi-Fi and cellular networks. Regulating new technologies with old ideas impedes progress. These planned improvements will improve the speed and efficiency of the end user’s experience by increasing fiber deployment for more broadband connectivity. But fiber-to-the-home is an expensive investment. It’s more efficient to expand wireless capacity by deploying a layered approach that can maximize investment in both fiber to the networks and 5G small-cell deployment to neighborhoods.

Our current connectivity has insufficient capacity and cannot withstand the demand of the technologies of the future. We will need more bandwidth to boost capacity, efficiency, quality, and coverage for connectivity. Speeding up the deployment of 5G and understanding how the proposed changes in broadband build-out and small cells will boost connectivity to mobile networks and will require collaboration among investors and the cooperation of policy thought leaders to clear the path for a new era of connected devices and smarter networks.