Why 5G network slicing is a big deal for IoT

This week, Ericsson announced that it’s made network slicing commercially available for networks running its 5G equipment. This is a game changer for the industrial and enterprise IoT, and maybe later, for consumers. Network slicing may also allow telco carriers to make a return on their investment in 5G by charging more for a higher quality of service. And now, it’s finally here!

So what is network slicing? In a wireless network, bits are crammed into the airwaves in blocks of spectrum called channels. There are hundreds of megahertz available for splitting into channels depending on what spectrum a company is using. Network traffic could either flow freely across all of those channels in a best-effort fashion, or with network slicing, certain packets or data streams could get a dedicated chunk of spectrum. So if you own a factory, you might want network slicing to guarantee a set latency for your controls traffic, as it would ensure that production data from machines arrives in milliseconds.

From a practical standpoint, network slicing offers a carrier the ability to segment traffic out for guaranteed latency, security, or bandwidth. Ericsson says that companies are already building plans for consumer AR, VR, and cloud gaming using network slicing. This somewhat surprised me since I thought enterprises would be more willing to pay extra for a guaranteed quality of service.

According to Ericsson’s research, however, enterprises are mostly looking at network slices for smart surveillance and factory automation; the chart above offers some possible examples. But there are some other implications around network slicing that will affect the telcos, primarily around packaging different slices into a new virtual network.

Large tech providers like Microsoft or Amazon could package up slices of connectivity from different carriers as part of their own IoT cloud offerings, for example. Or a company like Twilio might package up slices to offer a global network to a company such as Tesla, which wants to provide service to connected cars around the world.

For enterprises, these repackaged networks help eliminate the complexity of dealing with multiple carriers if you’re a multinational corporation, and offers another value-add service for companies like Twilio that might want to deal with multiple telcos. But even as network slicing helps change the wireless market, it will also open up new regulatory quagmires.

As Ericsson notes in its report on network slicing: “Slice-aware RAN QoS implementation enables service providers to create differentiation in their networks both between subscribers and between services. It also allows them to allocate and supply adequate network resources (including both spectrum and hardware resources) based on subscriber and service requirements.” (emphasis mine)

What that means is that telcos can not only carve out special plans for specific services, they can also create slices for different subscribers. In other words, the telcos could end up going the way of the airlines, with everyone on the network getting service at different prices and with different amenities (in the case of a wireless network, an amenity might be faster video downloads).

This is where the regulatory quagmire comes in. For decades, the concept of network neutrality — the idea that network providers can’t differentiate between different types of traffic and traffic coming from different sites — has governed the internet. The goal was to prevent ISPs from charging more for certain types of traffic or for speedy delivery of traffic from certain sites.

On wireline networks, where congestion is much rarer and typically a function of a provider that is unwilling to invest in network upgrades, network neutrality makes a lot of sense. But on wireless networks, things get a bit trickier. There are only so many bits of data that a company can cram into a hertz of spectrum, and only so much spectrum available. Every new version of cellular technology attempts to make the bits/per/hertz more efficient, but the airwaves are limited.

One reason many of the 5G deployments can deliver so much bandwidth is because there are so many megahertz in high-frequency bands. The downside of those bands (and the reason they’re less crowded) is that the bits can’t travel as far. This won’t matter in private 5G networks, but for consumers and providers of certain enterprise services, such as wireless for cars, there will be congestion.

That is why, originally, network neutrality didn’t apply to wireless networks. But if carriers start segmenting out their networks and subscribers, regulators will need to lay down some rules about what level of wireless broadband a telco should deliver. It won’t be pretty, but if you believe that broadband — be it wireless or wireline — is an essential utility or fundamental right, then regulators will need to ensure fair access, and fair pricing, for some level of it.

So while I’m excited about the potential for 5G network slicing because it will enable new services and new market opportunities, I’m dreading the inevitable regulatory fight.