We’ve talked and written a lot about the coming 5G revolution in wireless communication, but our emphasis on latency, speed, and ubiquitous coverage is only part of the story. As we move from 4G LTE to 5G, we’re going to need a lot more base stations, and these base stations will be very close together. It’s like a sprinkler hose that squirts water on your garden beds every few inches, where the water is the wireless signals and the hose is the fiber backhaul. The density of the small cells required by 5G makes it impractical in many instances for carriers to own the basestations. So we’re going to see a different kind of configuration for the last hop in this hybrid network of wired and wireless networks.

We know what that new setup will look like because we have something like it today in stadiums and other public spaces. By necessity, stadiums use Distributed Antenna Systems (DAS) that are shared by all the carriers providing signals in the stadium. This year’s Super Bowl – the greatest football game of all time because the Broncos won – was able to set a record of sorts for data transferred because the carriers shared a common set of antennas:

The videos, web searches, social media updates and more made by Verizon customers in the Bay Area on game day and throughout Super Bowl week added up to 68.6 terabytes (TB) of wireless data, or the equivalent of 45 million social media posts.

The golden anniversary Super Bowl now holds the unofficial record as the most connected and shared championship game in history.

In a DAS, upstream signals from the antennas go to a common signal processor at the site and are separated for transmission on wired backhaul brought in by each of the carriers; downstream signals are merged from incoming wires to outgoing radio signals.

DAS isn’t without problems because the signal processor is closely bound with the peculiarities of each network. This can be troublesome at upgrade time because each DAS signal processor has to be in step with each carrier network it serves. Consequently, DAS is only used today where it needs to be used.

The more general term for basestations that serve multiple carriers is “Neutral Hosting.” Huawei is a big player in the NH game, betting that it will take off as 5G rolls out. Some problems need to be overcome for this to happen, as Alan Gatherer, CTO for baseband Systems on Chips at Huawei points out in the IEEE Communications Society’s CommSoc Technology News:

5G might provide an impetus for neutral hosting as 5G may rely on 4G to provide outdoor coverage and focus on indoor and dense area networks. As an emerging standard it can be developed with neutral hosting in mind. In 4G, outdoor and macro networks still dominate the revenue, making it hard to focus on such an unconventional market. But 5G may flip that equation. In addition, there needs to be an acceptable, at least de facto, standard interface to allow the operators to differentiate on shared hardware. The current hardware doesn’t support shared access, as such isolation comes at a cost. But 5G may also flip that equation because of its focus on multi-use (MBB, uMTC, mMTC) modems. The industry is already discussing Service Oriented Radio (SOR) for 5G. So in summary, neutral hosting is certainly worth keeping an eye on. We are already creeping down this road but there is a long way to go and many business and technical hurdles need to be overcome before the progress really starts to accelerate.

As you can see, there’s a bit of wishful thinking here because Huawei has an interest in selling neutral hosting hardware. But neutral hosting is a logical extension of a second technology trend that’s nearly as important as 5G, namely the virtualization of networks. Network virtualization – AKA Software Defined Networks (SDN) and Network Function Virtualization (NFV) – comes about when physical network are over-deployed and software is used to define service packages and to manage networks. With SDNs, carriers can add or reduce capacity at a connection point without rolling a truck, climbing a pole, and changing hardware in the field. This is a great thing to have, whether the carrier’s field service crew is on strike or on the job.

Neutral hosting on a large scale – bigger than a hotel or a stadium – creates a new market that shares some features with the carrier-independent towers leased by companies like Crown Castle and American Tower. On leased towers, carriers install their own basestation electronics, but in the NH scenario they only need to install software and proved access to backhaul, which is commonly leased. If 5G evolves toward NH with leased backhaul fiber, we’ll see networks that contain more software than hardware and rely more on leases than on purchases.

One implication of this scenario is a more diverse set of service plans and customers. We already see carriers making deals with car companies as well as consumers to provide mobile Wi-Fi hotspots in cars that use LTE for backhaul, and as 5G and the IoT explode we can expect to see more of that.

We can also expect to see more companies entering the market for mobile and fixed broadband service because leasing reduces a significant barrier to entry. So 5G is designed to create competition. This is going to be fun to watch.