The movie Inception, starring Leonardo DiCaprio, features characters going into dream worlds, and then going into dream worlds within those dream worlds and then dream worlds within those dream worlds -- until you can barely remember what's going on.

Will 5G be the same way?

Yes, there is a parallel between 5G and the movie Inception, but you'll have to stick with me here because we're going to get a bit technical. But I promise it will be worth it, in the end (and hopefully the end of this article will be more satisfying than the spinning top at the end of Inception).

Let's start at the beginning: 5G is all about a new wireless technology that transmits data really fast between a cell tower and a phone, right? That's true, but equally important to 5G is what that cell tower is connected to -- that's called backhaul. After all, it's that backhaul connection that plays a big role in how your phone ultimately reaches Facebook's servers or Netflix's CDN.

Most of the time, at least in this country, that cell tower routes (backhauls) the traffic it collects within its coverage area through a fiber running between the tower and a nearby switching center. Once the traffic hits that switching center, it's then routed to its destination along the nation's core Internet backbone. Think of it like driving around a city until you get onto the interstate.

Now here's where Inception kicks in: What if that cell tower didn't need a fiber connection? What if it just beamed its traffic to the switching center wirelessly? Dreams within dreams.

And then what if that switching center was actually located on a satellite? Or a balloon? Dreams within dreams within dreams!

Now, I don't want to go too far along this line of reasoning, mainly because there aren't many network technicians who do -- at least in the United States. But in other countries? The story is a little different.

According to a report last year by Ericsson, 40% of backhaul connections are expected to be based on wireless technology by 2023. And the standards group ETSI recently reported that wireless backhaul technologies serve more than 50% of the total cell site connections worldwide today. "They are apparently key solutions to address demands of mobile access networks at fast pace and in an economical way," ETSI reported of those wireless backhaul links.

As with most things though, the situation is a little different here in the United States. "We estimate North America is close to 26%" in its usage of wireless backhaul, wrote Jimmy Yu of research firm Dell'Oro.

But how might that situation change as we move into a 5G future?

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Speeding up wireless backhaul
Some are firm believers in a wireless backhaul future. "Many of our customers have asked us if we think microwave transport can handle the demands of a 5G radio access network," wrote Shane McClelland, head of transport in North America for equipment vendor Ericsson. (Microwave is often used as a synonym for wireless when discussing backhaul.) "The answer is yes."

"It's the customer's decision what they want to use," acknowledged Hans Mähler, head of microwave systems at Ericsson. However, he added: "What we want to show is that there’s a really good alternative to fiber."

Mähler is referring to a recent test Ericsson conducted with Deutsche Telekom to show off a commercial wireless backhaul link running at 40Gbps across a distance of around 0.87 miles by combining two 2GHz millimeter wave (E-band) channels, with latency of less than 100 microseconds (that's 0.1 milliseconds). And in case you're wondering: Yes, those metrics are impressive.

"While fiber is an important part of our portfolio, it is not the only option for backhaul," said Alex Jinsung Choi, SVP of strategy and technology innovation for Deutsche Telekom, in Ericsson's press release about the test.

(It's worth pointing out here that Ericsson definitely has skin in the game -- according to Dell'Oro, the top three vendors for wireless backhaul products in North America in the first nine months of 2018 were Nokia at 30% market share, followed by Aviat at 16% and Ericsson at 10%.)

Wireless backhaul "is no revolutionary technology... It's really a known technology,” said Ericsson's Jonas Hansryd, head of the company's microwave and millimeter-wave research, adding that wireless backhaul continues to improve as new wireless technologies -- including some of the elements in the 5G standard -- hit the market.

Further, Hansryd explained, Ericsson will likely be able to get even better performance in the future when it applies higher spectrum bands like the W Band (100 GHz) and the D Band (150 GHz) and additional wireless technologies like MIMO to wireless backhaul connections.

Incredibly, Ericsson's Hansryd and Mähler explained that wireless backhaul can even support lower latency than fiber backhaul. Meaning, if you want super duper low latency speeds, you actually want to use wireless backhaul, and you don't want to use fiber.

"Free air is almost the same speed as light, but if you take light in another medium, like glass [in a fiber connection], it's lower, based on the diffraction index," Mähler said, adding that the theoretical maximum measurement of latency across 10 km of fiber would be about 50 microseconds, whereas wireless backhaul would lower that to 30 microseconds across the same distance.

"All the big stock markets, like for instance between Chicago and New York … for where you need to have a really low latency when you have a remote service that is doing the buying and selling, they are going over microwave just to have the lowest latency." Hansryd added.

So wireless backhaul is ultimately better than fiber backhaul, right? Well, not really, at least according to most top US operators.

Verizon, Rise and others talk backhaul
“We do use microwave in certain special niche conditions. Clearly, fiber is best simply because of its ability to expand, especially when you talk about gigabits coming from the cell. When you have many users using gigabits, fiber is definitely the medium to get that done," said Mike Haberman, VP of Verizon's network engineering. He declined to say exactly how much of Verizon's traffic was backhauled through wireless. "It [fiber] is certainly available in most all places. It’s really come a long way in the last 10 years. We especially like dark fiber, in that way you can expand it and do what you need to do."

In fact, the Fiber Broadband Association recently reported that fiber surpassed DSL to become the second most common connection for home internet in North America after cable. The association added that fiber now passes 41 million unique homes in the United States and connects 18.6 million homes -- a 17% increase in homes passed by fiber since 2017.

Concluded Verizon's Haberman: "From our standpoint fiber is the way to go. Now certainly there have been some discussions in the industry for wireless backhaul... But right now, the preferable way to go is fiber."

It's those kinds of comments that have in part drummed up interest in fiber providers. "Investments in U.S. fiber networks have become an area of focus for infrastructure funds looking to take advantage of the industry's tailwinds and strategic buyers who want to diversify their business or gain operating leverage," said CoBank's Lead Communications Economist Jeff Johnston, in a recent report. "As a result, fiber valuations have increased approximately 30 percent over the last 12 months, and we expect them to remain elevated for the foreseeable future."

But Verizon has focused much of its attention on covering urban and suburban areas with LTE for smartphones. Other operators, those in different areas with different business models, have a different view.

"90% of Rise's customers are served by some flavor of wireless backhaul. The remaining 10% is on the towers or locations in which we have circuits/fiber connects to the tower," said Jeff Kohler, the co-founder, and chief development officer of Rise Broadband, likely the nation's largest fixed wireless internet provider. Rise counts roughly 200,000 customers across rural parts of Colorado, Idaho, Nevada, Oklahoma, Texas, Utah and elsewhere, offering speeds of 5 Mbps to 50 Mbps, and up, through technologies including LTE.

Kohler explained that Rise runs its backhaul across a range of spectrum bands from 5GHz to 70GHz, though he said the most popular bands are 11-24GHz. He said that most of Rise's customers use around 150GB of data per month, and therefore Rise can economically get 1GB of capacity to its tower wirelessly, which he said is suitable for even a heavily used tower site.

However, when usage runs higher than that, Kohler said Rise turns to fiber. "Distance is a factor: at less than 1/4 mile, wireless is a suitable replacement and even suitable over longer distances with normal-to-lower backhaul requirements. For high bandwidth needs over 1GB and longer distances, it is not a suitable replacement."

And what of 5G? "The urban use case, and all of the applications of 5G, will be an urban phenomena for the foreseeable future and will demand much more bandwidth and lower latency," Kohler explained. "Therefore, fiber would be a safer choice for these higher populated areas."

Not surprisingly, Rise isn't the only fixed wireless internet provider using a variety of backhaul technologies: "Using a combination of wireless and fiber backhaul gives you the flexibility to serve sites that may not have easy or cost-effective access to fiber. In network deployment, you want to have options, and wireless backhaul is another tool in the toolkit," said a representative from Starry, which is in the midst of a major fixed wireless buildout to more than a dozen of the country's biggest cities.

But as the wireless industry -- including the nation's biggest carriers like AT&T and Sprint -- move toward 5G deployments, wireless backhaul could play a larger role. Though probably not a starring one.

Sprint, AT&T see growth in wireless backhaul
"Small cells will become more intelligent, so as we deploy more of these to serve at let's say a city park, they can be deployed in a manner -- not today, but in the near future -- where they can actually form a mesh network in terms of how they connect to each other and backhaul the traffic," Andre Fuetsch, President of AT&T Labs and the operator's CTO, told ZDNet. "So you would only essentially need one particular node that would have to have a fiber connection. And this is important because today, you're basically having to make sure that there's a fiber facility to serve it; in the future, we have the option to take advantage of millimeter-wave as a backhaul mechanism, and then over time as demand grows, it buys you time to eventually fiber them up."

It's worth noting here that small cells have been discussed as a major element of future 5G networks, considering operators are working to densify their networks and transmit the kid of short-range, millimeter-wave signals well-suited for small cells.

Some network construction companies largely agree with Fuetsch's outlook on wireless backhaul, particularly as it relates to 5G and small cells. "Fiber backhaul has been the topology in use with 3G and 4G LTE networks," explained Tormod Larsen, CTO at ExteNet Systems, a network construction company that focuses in part on small cell networks. "The network densification requirements with 5G may require ‘short laterals’ from our fiber grid utilizing wireless backhaul, essentially complementary to the fiber backhaul. Fiber will remain the longer-term solution, with wireless backhaul being used in shorter distances and hard-to-reach areas.”

As a major nationwide wireless network operator that is planning to launch 5G NR in nine markets in the coming months, Sprint provided perhaps the clearest look into the potential of wireless backhaul. The company said that microwave represents about 20% of its macro tower backhaul; the rest is fiber-based. The operator also boasted that it has one of the largest microwave backhaul networks in the country, with over 10,000 in-service links. Further, Sprint said its growing deployment of outdoor small cells rely heavily (85%) on UE Relay for backhaul. (Sprint's Magic Box is a User Equipment (UE) Relay product that backhauls traffic through the operator's licensed spectrum, including 2.5GHz.)

Further, Sprint uses a range of backhaul technologies (Docsis, Ethernet, fiber and microwave) spectrum bands (licensed spectrum bands 6 GHz, 11 GHz, 18 GHz, 23 GHz; lightly licensed 80 GHz; and unlicensed sub-6 GHz) and configurations (line-of-sight and non-line-of-sight).

So does that mean Sprint plans to increase the use of wireless backhaul technologies as it moves to 5G? "Yes," the operator said in responses to questions from Light Reading. "As microwave technology throughput capabilities continue to advance to 10 Gbps and beyond, we do see certain use cases that will be viable for supporting 5G backhaul. 2019 will see the arrival of multi-band systems capable of high capacity via 80 GHz paired with a higher availability 18 GHz or 23 GHz link to handle fade events."

However, Sprint said that its current backhaul mix is shifting toward wired backhaul for its macro sites, although the operator said wireless would continue to play a significant role, particularly in areas where there is limited or no Ethernet competition and backhaul connection prices remain high.

A lackluster market
In general, though, analysts' attitude toward the market potential for wireless backhaul can be described as "meh."

"We have been tracking wireless backhaul for years, and honestly it has never accelerated because operators prefer to future-proof with fiber," said Joe Madden of Mobile Experts. "So it has turned out to be a fairly boring segment of the market."

And Earl Lum of EJL Wireless Research said that wireless can be a perfectly suitable replacement for fiber if the bandwidth requirement is not expected to grow dramatically over time, or where digging a fiber trench would be impossible for legal or physical reasons. However, he said that wireless backhaul could be affected by a variety of issues including severe wind or weather that would knock a transmitter out of alignment, or a pole-mounted site that might not have the room to fit in a wireless backhaul transmitter.

And that relatively ho-hum view of wireless backhaul is also held by Ericsson's Hansryd and Mähler, the two executives who are probably the deepest into the Inception-like nature of wireless and wireless backhaul.

"You really need to have multiple backhaul solutions." Mähler said, explaining that it makes sense to use fiber where it's available (and it's readily available in large parts of developed countries like Japan and the United States) and to use wireless where it makes sense (like in developing countries, where it's really expensive to deploy fiber).

“They are two complementing technologies," he said.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano