- Many Americans have only a single option for internet service providers (ISPs) that effectively hold a monopoly over an area.
- ISPs that control an area often have no incentive to lower their prices, or even improve their services and products. As an example, my ISP charges me $US80 per month while another ISP might charge $US40 per month for the exact same service.
- Netgear CEO Patrick Lo told Business Insider that 5G wireless networks would change that, and would allow new ISPs and operators to enter areas that have been mostly controlled by a single company for years.
- 5G home internet will bring much-needed competition and variety to Americans who have been stuck with whatever ISP they have been forced to use exclusively.
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There’s only one internet service provider (ISP) in my area, and if I want internet, $US80 per month is the price I pay for 200 megabits per second (Mbps).
I was actually quite happy with my service until I discovered that another ISP offered 940 Mbps internet speeds for the same price – $US80. That meant the other ISP offered 470% more “product” – or, internet speeds – for the same price I’m paying now.
The logical thing in my brain is to immediately switch over to the other ISP that offers 470% more speeds for the same price. But I can’t, because my current ISP is my only choice.
And the same thing – having a single ISP option in your area – might go for you, too. Even when I lived in New York City, I only had one option. I, and many other Americans, are bound to whichever ISP happens to monopolize the area.
Indeed, the operative word here is monopoly. Some ISPs have a stranglehold on certain parts of the country. That’s unequivocally a bad thing. Without competition, my ISP has no incentive to lower its prices, or improve its products and services. It can charge whatever it wants, and if I want internet or cable TV, I have no power or control over that. That’s why I’m paying $US80 a month for half the internet speeds I could be getting with a different company.
One of the reasons that some ISPs have a pseudo-monopoly in certain areas is because it’s so expensive to lay down the cables for internet. If you live in a one-internet town, it’s likely that the cables were laid down a long time ago at the expense of now-bankrupt companies, Netgear CEO Patrick Lo told Business Insider during an interview at CES 2020. As a result, an ISP was able to swoop up that pre-installed cable network for relatively cheap. And because cables are so expensive to install, few ISPs would lay their own new cables to compete.
But that’s set to change within a couple years, and “with the 5G arrival, that monopoly is going to be broken,” Lo said.
5G is the next generation of wireless mobile networks after 4G LTE. Apart from connecting smartphones to the internet, 5G has the capacity to be used for home internet, among a wide variety of other applications, too.
The reason why 5G will “break up” the ISP monopolies is because 5G networks are much easier and cheaper to deploy than laying down cables. 5G networks are broadcast wirelessly from several small, “dirt cheap” cellular antennas, Lo said, and all they’re doing is just relaying the traffic to and from “the cloud” where internet data is managed.
Once 5G home internet services start popping up, incumbent ISPs that have firm grips on certain areas might suddenly have competition from other ISPs that lay out a 5G network, and you’ll suddenly have a choice. For those incumbent ISPs, “the monopoly will last for another 12 to 18 months, and then it really is game over,” Lo said. They’re either gonna lose customers, or “they better come up with something better.”
Specifically, the FCC will begin auctioning the 3.5GHz frequency to operators for 5G this year, which Lo suggests will allow fast gigabit (1,000 Mbps) speeds, and he estimates that fast 5G home internet services will begin to be deployed more widely by 2021.
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