Time Capsule losing connection

Very good chance of it..

External Antenna might look unattractive but they still work better than internal set.. just the extra size and spacing makes a difference.

There is not a lot of settings.. by default wireless will choose the best channels for your area and will set wireless power to max.

But wireless also has limitations.. 5ghz which is the fast AC wireless has limited range and penetration of solid walls.. which is more often the case in townhouse than standard timber frame home. Do a wireless survey around your house.. and check what signal strength you get in locations you would typically be using internet.

If you do need more wireless in a dead area.. DO NOT extend wireless if at all possible.

Your TC would be perfect as a WAP but must be connected back to the Asus by ethernet or alternative like powerline adapter.. which can work very well (or poorly or not at all). If you own the place we always recommend people spend the money and properly install ethernet. It is hugely better than other methods.

BUT Asus is well aware of what is happening and new firmware coming out has added MESH ability.. so if you get another Asus router it can be set up not just as wireless extender but proper mesh system.. !! Worth a look.. albeit the cost of installing ethernet IMHO always gives better results.. always.

I live in a 1500sq. ft. townhouse so you’d think this router should be capable of providing good coverage throughout my entire house.

It's possible that the new router might provide more range than the Time Capsule, but keep in mind that the broadcast power of wireless routers is limited by law, so there won't normally be a lot of difference from brand to brand.....although a router with external WiFi antennas will likely work better than one that uses internal antennas (or, antennae).

Also keep in mind that a lot of newer construction utilizes wall insulation that has a foil backing on at least one side of the insulation, and often both sides of the insulation will have foil backing material. As you can already guess, the metal foil is going to really slow down and absorb a good amount of the WiFi signal that is trying to pass through the wall.

So would you say I'm better off just setting the channel to auto for both the 2.4 and 5G network or should I specify a channel that's not being used by any other networks that I can see?

The reality is that playing will make very little difference.. but it can satisfy you that you really do need to add a WAP or Extender..

I guess, in my situation, I want the point proven before using what is either expensive or very costly in terms of speed..

Using a wireless extender will slow your entire network.. and clients on the extender (repeater in non-apple terminology) will get less than half the speed of the worst connected clients on the Asus. That is just the physics of wireless repeaters.

Design and layout of the house and construction methods make big difference.. Single storey with hollow plasterboard walls and you will get far superior results cf double or worse triple storey with solid brick and concrete.

The ideal is ethernet.. Let me tell you I only just replaced the last wireless repeater link in the house.. because I got lazy and it made a great test setup.. I had a pair of airports.. physically about 6ft apart.. one on top floor (timber) and matching unit on the bottom floor.. with a bit of tweaking they linked at full speed.. but wife continually complained about how poor her Skype and whatsapp was to our son living on the other side of the country.. or family living in another country.. I just never associated it with the repeater setup.. since I was getting 450Mbps on the link.. and my ADSL speed is only 6/1Mbps. However, when wife was in Europe I also got sick of the poor performance.. remember on mobile phone with whatsapp running over wifi this is double hop wireless.. I simply took the phone downstairs and it linked directly to the Asus.. problem went away. The repeater link was fine for streaming TV.. although it was somewhat unreliable and needed a weekly reboot. So I eliminated the repeater.. ran ethernet.. now I have 5 wifi points in the house... all ethernet back to the Asus. (This is far more than needed.. but I maintain it all to answer questions about wifi). The problem is eliminated.. wireless is ok for data.. and one way streaming like TV even over two hops.. but the moment you start trying to be interactive.. as in two way voice or video conversation.. forget about it. One hop wireless is OK.. in direct presence of a WAP.. that is ethernet connected back to main router.. wireless and even mesh systems just cannot match that performance.

Even the latest Netgear Orbi which is not true mesh.. it uses a superior second 5ghz channel for backhaul.. is constantly dropping connections to mobile devices. And I see complaints about it in another forum here.. just glanced at a post today.. same thing.

Wireless is half-duplex.. ie it can send TX or Receive RX but not at the same time..

Wireless can only talk to one client at a time.. so it must time slice between clients.

It must stop to allow other clients access as long as devices are turned on.. hence if you run a ping test you will see big increase in ping times every few seconds.

Ethernet is duplex.. it can Tx and Rx at the same time.. and using modern switches can talk to several different devices at once. (not from a single source though).

Wireless is getting better.. my son and I setup a home theatre system a few years ago that can send HD video to projector on the ceiling using 60Ghz..

If you even walked around the room it would affect the video stream.. brilliant that they are getting speeds that high.. near to useless in reality without perfect configuration and a lot of patience.. ended up running yet another HDMI through the wall, 1.4 as well as 1.2.. so we can watch HD blue ray.

The problem is the same.. what is on paper and reality are two different things. The blueray player could not easily detect the projector.. as it would dropout all the time. So the stream would not start.

The main point of the rant.. is that what is promised.. no wires.. works sort of .. kind of in a very specific set of circumstances.. and the lesson is wire it.

Just type into google orbi dropout I think you will find lots of posts.

Mesh means stress? - Netgear - Modems/Routers

There is NO wireless based extend system that will work 100% .. it is simply impossible at this point in the technology. Especially home systems .. hugely expensive Cisco might be a different story.. go into your apple store sometime and ask what wifi system they use.

There is no Time Machine support in the Orbi itself.

Should I try getting an external HD that I can connect to the Orbi router via Ethernet?

There is no such thing as an External HD that connects by Ethernet.. that is actually a device that will end up being a Time Capsule or a NAS of some sort. It must have an operating system that will handle all the network connection.. and the computer that makes the connection to it will then have no control over it.

If you want to go that way.. why not use the TC?? It is already what you are talking about. But use it with Carbon Copy Cloner.. TM is not reliable to network drives now no matter which brand they are. CCC should work ok.. but the TC should be setup in bridge mode with a static IP.. or it should be setup in DHCP mode with wireless active and used over wireless to your computer instead of the orbi system.. Apple computers could also be plugged by ethernet directly to the TC but I am assuming you are still trying to avoid that.

WD makes many different single disk NAS.. MyCloud for example.

Correctly they are NOT external Hard Disks. You cannot plug it into your computer for example and format the drive as you can with USB, Firewire, Thunderbolt. You must use the internal OS of the mycloud to do it because it has a full processor.. and the USB port on it cannot be plugged into a computer.

You’re saying that this definitely won’t work?

Sorry you are not reading carefully what I wrote..

WD makes many different single disk NAS.. MyCloud for example.

The reference you have is to a MyCloud.. exactly what I said will work.

IT IS A NAS.. IT IS NOT AN EXTERNAL DRIVE.

Huge difference between them.. but you already have a TC which is functionally identical to the MyCloud for the job of backing up.. and the MyCloud is not without issues.. TM has been very unreliable on the MyCloud.. as you have also experienced on the TC.. due to changes in security to network drives in Sierra and High Sierra.

That is why I recommended to you.. just give the TC a go.. but use Carbon Copy Cloner instead.