Podcast: Play in new window
Marconi, Inventor of Radio
C.T.I.A., representing wireless carriers, is meeting in San Diego this week. Yesterday, Julius Genachowski, chairman of the Federal Communications Commission, gave the keynote address, stressing the need for increased electromagnetic spectrum to combat the “looming spectrum crisis.”
“Looming” is a word that makes for great speeches and press coverage but not necessarily consensual agreement among those in the wireless industry. It invariably leads to diatribes about dividing up the wireless spectrum without answers about how to equitably do it.
In the midst of the debate between regulators and mobile broadband providers, a comprehensive solution addressing the projected demand of mobile users has yet to emerge. Each provider competes for increased wireless spectrum without a strategic plan addressing future needs of their customers. Meanwhile, new and innovative mobile devices, such as the Kindle and Roku Video Player compete with innovative services that challenge established company profits.
Wireless Spectrum: A Precious Resource
Like air and water, wireless spectrum is a limited resource. It’s finite, universally fixed, divided into bands of frequencies, separated by channels and bandwidth.
The Federal Government assigns wireless frequency ranges for radio, television, two-radio radios, government, GPS and cellular. In the pre-mobile analog age, frequency assignments for the different classes of services was not a critical concern. As the world went digital, television broadcasters changed to digital frequencies, opening the 700Mhz analog spectrum to mobile carriers. Verizon Wireless and AT&T grabbed most of this spectrum.
Two informative Gizmodo articles about wireless are worth reading:
“Mobile Term Madness: LTE, WiMax, EV-DO and More Explained”
“Gizmodo Explains Why WiMax and LTE Wireless 4G Data Will Blow Your Mind”
Unless we can somehow tap into a parallel Universe, wireless spectrum is not expandable like a rubber band. Existing and emerging telecommunications technologies–LTE, WiMax, 4G–will improve wireless network performance, but demand for voice, video and data delivery will continue exceeding supply.
Wireless Carriers and Cable Companies
The fight for wireless space has become so intense that T-Mobile proposed using frequencies set aside for public safety. Apparently, T-Mobile believes its services exceed the importance of frequencies assigned to police officers and fire fighters.
To improve AT&T’s iPhone voice and data overload problem , it started rolling out 850Mhz band frequencies, while continuing its LTE wireless broadband network development.
Meanwhile, Comcast invested over $1 billion in Clearwire’s WiMax service blanketing metro areas with broadband wireless Internet coverage. The giant cable company is integrating its on-demand video service with voice services that compete with Verizon. This is an interesting change for Comcast–a media company that sold its 800,000 residential cellular operations to SBC Communications (now AT&T) in 1999.
Cox Cable’s expansion into wireless is even more dramatic. Like Rogers Communications in Canada, Cox wants to reduce customer churn by offering cellular services. Cox has already targeted 3G CDMA networks in 15 states and plans to upgrade its wireless network to 4G LTE with speeds of 100Mbps, serving 24 million people. The media giant will offer WiFi access free to its home broadband subscribers.
Cox has a competitive edge over wireless carriers. The cable giant can “backhaul” voice and data from cell towers to its fiber-optic backbone network and offer its customers multimedia wireless connectivity.
Wireless Spectrum Fight by Media vs. Utility Companies
Utility companies, many owned by municipalities, deliver water, electricity and gas to their customers. They’re heavily regulated and need approval before raising prices. They don’t offer value-added services and customers have few alternatives.
When cable and wireless companies first started, they were similar to utilities. Cable companies offered reasonably priced basic cable service and cell phone company voice service, while not inexpensive, was affordable by most consumers.
Mergers and Consolidations
Mergers and consolidations among media and telecommunications conglomerates changed the scene. Large cable companies competed with fast-growing satellite TV and other entertainment companies. When DSL appeared, telcos and other providers challenged high-priced cable Internet services. AT&T and Verizon launched bundled TV, telephone and Internet services at competitive rates. Comcast and other cable companies countered by doing the same.
Wireless carriers directly confronted Verizon and other telephone companies offering voice land lines as customers switched from wired to wireless or VoIP telephone service. Just recently, after the FCC announced an investigation of wireless carrier policies, Verizon and AT&T approved Google Voice, a service that bypasses carrier networks. And Microsoft wants to buy Skype for $5B-$6B.
5 Predictions for the Future
Predicting the future is usually left for soothsayers or market research firms. I’m neither, but I have a few informed opinions about the next five years in wireless:
- Improvements in smartphones and other mobile devices will maximize wireless performance. Faster processors and devices that automatically go to sleep, like laptops, will improve user engagement and extend battery life.
- 4G networks will significantly improve mobile device performance, but greater demand for wireless broadband spectrum will off-set some of the improvement.
- Comcast and other larger cable companies will become dominant players in wireless and a direct threat to the 45 smaller wireless operators in the U.S.. They’re likely targets for takeovers by the larger carriers.
- Voice-Over-Internet-Protocol will rapidly grow. With voice and data convergence, mobile service customers will pay a flat fee per month for both with unlimited access.
- The FCC will enforce net neutrality among wired and wireless Internet providers.