Wi-Fi is in coffee shops, McDonalds, and many other places and today it is free. Not too long ago some companies thought there was financial reward to be had by installing Wi-Fi and then reselling it to customers. This is no longer true and except for some hotels, I have not been asked to pay for a Wi-Fi connection in the past two years. So why would I pay to have a Wi-Fi connection in my car?

But that is what Audi and T-Mobile apparently expect us to do. At the time of purchase of the car, you can pay an additional $450 and get 30 months of Wi-Fi in your car, fed by T-Mobile’s 4G network. Or, if you want, you can pay nothing upfront and a monthly fee of $30. But if I have an iPhone or other smartphone or tablet that is connected to any of the 3G or 4G networks, I can set it in hotspot mode and accomplish the same thing. This has to be one of those ideas hatched my marketing folks (no, I don’t have anything against marketing folks) and not thought-out, tested, or run by the public to measure interest.

First I have to ask myself why I would want Wi-Fi in my car to begin with. So far I have come up with a couple of reasons. The first is that I might drive a carpool to and from work and it might be a nice perk to offer the passengers, but most of them have smartphones and plans with wide-area networks. Some may have tablets with Wi-Fi onboard, in which case it might be neat to give them access to the Internet on the drive.

If I took younger kids from place to place, perhaps I would want Wi-Fi in the car to save on their wireless bills for streaming video and game playing, but texting today is unlimited and free so unless I am taking the kids on a vacation and looking for a way to keep them occupied, I am not at all sure that an extra $30 per month over and above my existing wireless bills is something I would be very excited about.

In fact, the trend for wireless in vehicles seems to be going in the exact opposite direction. Several years ago I wrote an article about what I wanted from my wireless device and my car. Some of the things I asked for were:

1)     When I get into my car it recognizes me, adjusts the seats, mirrors, temperature, and sets the radio to my favorite channel at just the right volume level.

2)     If it is commute time, the car knows I am headed for work, sets the onboard navigation and traffic monitoring system, and warns me of any delays.

3)     When I leave the car, the phone locks the doors for me.

Some of this is already being done, and I know a lot of people who use their smartphones and tablets for navigation instead of paying the $2500 for an onboard system. I always thought it would be great to have a touchscreen in the car that my wireless device could talk to. The only obstacle I have seen so far with using a smartphone or tablet in the car is the battery life, and having to plug it into the accessory power plug (cigarette lighter) is a hassle, but strides are being made in charging, too, so that should not be a problem for much longer.

The major problem with building things into cars is the fact that cars tend to be owned for many years and technologies change. Look what happened to OnStar. It had analog phones installed in a lot of vehicles. When analog cellular was cancelled and 2G and 3G systems came online, the upgrade prices I heard quoted by the auto dealers were in the area of $500 to $600 per car. Obviously, that did not work well for customer retention for OnStar. Building technology into vehicles also takes time for the automobile maker to decide which technology, which partner, and more. Perhaps the best-known partnership success today is Ford and Microsoft but that does NOT include wireless built into the car. Rather, it provides syncing between wireless devices and the car, and it still has onboard navigation in the car.

So in this case I think that the T-Mobile/Audi relationship will not be well received, at least in the United States. In Europe where Wi-Fi is still plentiful but, in many cases, customers have to pay to use it, perhaps it will be more of a success, but my bottom line feeling here is that this was not well thought-out, not well-structured, and does not offer any really bargain when it comes to Wi-Fi services.

I am sure that the people at both companies who worked so hard on this project believe that it is a win-win. That is, for T-Mobile it would add car subscriptions to its wide-area network and to Audi perhaps the believe that it will be one more reason a potential customer would buy an Audi. I don’t think either will occur and instead, by the end of the first model year, the results will cause a re-thinking of this relationship. Perhaps if they work on future versions of in-vehicle wireless, they might hit on something that will prove to be a must-have for drivers, but this is not it!

Andrew Seybold

The event will not be branded as a “Wireless University” but rather as a full-day educational session entitled “Mobile – Today and Tomorrow. When we suggested the title “Broadband Today and Tomorrow,” we got pushback from the folks at the GSMA who did not believe that “Broadband” would be a draw for the event since LTE is not as big outside the United States. This got me to thinking about LTE or 4G wireless technology. It has been a perception for many years that Europe and other parts of the world are more advanced than the United States when it comes to wireless. After all, they did introduce GSM, a second-generation wireless technology, while we were still offering analog cellular service. It took some time before BellSouth, Cingular, and others moved from TDMA to GSM, and some of the first CDMA 2G systems were deployed in the United States by Verizon and Sprint.

However, the United States has taken a commanding lead when it comes to 4^th-generation wireless. Verizon was first to move to LTE and did it with a bang. Normally, new wireless technologies are rolled out slowly over the course of many years, but Verizon jumped in with both feet and quickly began bringing up markets. It was dedicated to LTE and decided to make huge investments in the technology. AT&T has been playing catch-up but is making great progress while Clearwire and Sprint have thrown in the WiMAX towel and are placing their future bets on LTE. Even T-Mobile, the leader in HSPA+ 3G+ or as it called it, “4G technology,” has moved into the world of LTE.

LTE has gained traction in the United States faster than any other wireless technology. Why? It is not currently being used for voice except by MetroPCS, and Verizon has shelved its Voice over LTE plans for a couple of years. So LTE is about fast data speeds and capacity, plain and simple. Voice is still being carried on 2G and 3G networks and will be for some time, but LTE is about streaming video, fast access to the Internet, sharing pictures, and near-instantaneous data and video communications. The perfect storm for LTE was the explosion of the smartphone and tablet markets. Apple has led the pack in both of these areas. You might remember that when the first 3G iPhones came on the market AT&T was caught flatfooted and could not provide the capacity for these devices in major cities.

Just as we have all wanted fast and faster wired connectivity and access to the Internet, so too have we all wanted faster data speeds for our wireless devices. In this case, there was a very short lag between the introduction of LTE and the devices that supported it. 4G technologies were the first to be designed for fast data first, and oh, by the way, perhaps voice later. WiMAX and LTE are data-centric technologies whereas data was an afterthought for 2G and even 3G technologies.

That makes sense because wireless voice was the core “application” for wireless for many years. Then along came SMS or text messaging and voice customers found that text had great communication value as well, especially among the younger generation. Those of us who grew up with landline phones quickly embraced wireless voice because it gave us the mobility we wanted and needed. This generation has grown up with the Internet and just like we welcomed wireless voice, they have welcomed wireless data services in a huge way. Wireless data demand had grown at a rate of more than 100% per year for the past few years with no let-up in site. Network operators are facing spectrum shortages and are having to off-load customers to Wi-Fi and in-building femtocells. Still, in major metro areas, data speeds are not as good as they were only a few months ago, and as more customers come online and more videos are streamed, the situation will only worsen.

One reason for data growth in the United States is that the Federal Communications Commission (FCC) has never dictated that a certain portion of the spectrum can only be used for a specific technology as is the case in Europe and other parts of the world. This permitted U.S. network operators to deploy analog, then TDMA, CDMA, GSM and then GSM/EDGE, CDMA 1X and then CDMA EV-DO, and finally LTE. LTE is the first portion of the spectrum since the 800-MHz analog days where all of the network operators have chosen a single wireless standard.

In Europe, on the other hand, spectrum was always paired with a technology. The 900-MHz spectrum required GSM, as did the 1500-MHz spectrum. When 3G came along, it was allocated to the 2100-MHz spectrum, meaning that 3G required four times the towers to build than the GSM systems at 900 MHz, and also meaning that 3G was only a metro-area technology for many years. Now that LTE is on the scene, Europe continues to tie technology with spectrum. However, things are changing since all of the 2G and 3G systems will be replaced with 4G (LTE) systems over time. Until then, LTE is on yet a different band, and Europe continues to tie a technology to specific spectrum.

When it comes to voice and data pricing, the United States has some of the lowest pricing in the world. India’s pricing is lower, as is China’s, but generally, the rest of the world is still paying more for wireless services than we are in the United States. I keep getting into disagreements about this point but if you look at the various pricing offered in the different countries, it is easy to see that even with all-you-can-eat data pricing basically gone in the United States, we are still paying less for wireless services than in many other places around the world.

It should be interesting to put together our session for the Mobile World Congress. We will have access to the GSMA’s Wireless Intelligence group, which has great stats and numbers, and we will be comparing and contrasting them to what is occurring in North America. We are looking forward to this event, and we are certain that there will be a great deal of discussion regarding our contention that Europe has lost its wireless EDGE (sorry for the pun), and that the rest of the world is watching, with envy in many cases, the LTE developments in the United States.

Andrew M. Seybold

Looking back a few years, we see that when NextWave showed up at the PCS auctions in 1996, bid on, and won spectrum, the FCC and the federal government said it had too many foreign investors. What ensued was a long drawn-out battle that ended up in court with NextWave returning spectrum to the FCC, which signaled the end of NextWave as a viable network operator. Next came the failed AT&T purchase of T-Mobile.

NTT DoCoMo, the largest network provider in Japan, had, I believe, a 20% investment in AT&T at the time of the Cingular/AT&T merger, but AT&T bought NTT out either before or during the merger. At one point, SK Telecom, a Korean network, made a bid for Sprint that was rejected.

As you can see, there is a long history of foreign investors coming after U.S. networks, and you can’t blame them because we have some of the lowest customer prices while maintaining relatively high margins. I am not writing this article because I am against SoftBank’s purchase of Sprint. If it will strengthen Sprint it will be good for the industry as a whole. However, since SoftBank will obviously have majority control over the board of directors and may not fully understand the differences between the Japanese market and our market, the result might actually be to lessen the competitiveness of Sprint, and thus Clearwire. We will have to wait and see.

The issue I have is why the shift within the federal government to permit foreign companies to own a majority of these networks when we are trying to keep jobs and money in our own country. I am curious about the ownership rules apparently changing over time and, of course, I am concerned as a U.S. citizen about the profits from these foreign-owned companies flowing off-shore and perhaps not being used for further investment and/or research and development here.

Companies that invest in or buy other companies do so for several reasons, but primarily to make more money for the company and its shareholders. They do not make money by leaving all of the profits in the companies they purchase; they take the money out of the company and put it into their own coffers. In the case of Verizon Wireless, for example, over the past few years, Vodafone UK has received many billions of dollars. This is great for Vodafone, and certainly a return on its investment, but I am not so sure that in the long term it is good for the U.S. wireless marketplace. One could argue that it was partly Vodafone’s investment in Verizon that enabled Verizon to expand its network and service offerings and therefore it is entitled to a return on that investment. There is no clear or definitive, black-and-white answer for foreign investment.

Certainly Sprint can use the billions it will receive from SoftBank, and certainly Sprint has taken steps to end up with control over Clearwire and Clearwire’ s spectrum holdings (which are substantial). However, I have to wonder whether the investment directly into Sprint will be enough to help it get back on track. Sprint appears to be on its way back in any event, and perhaps this will enable it to move more rapidly. More than half of the SoftBank investment will go to existing Sprint shareholders—good for them—but it doesn’t really help Sprint in either the long term or the short term. Further, with only 30% of the Sprint stock still in play, I am not at all sure what this will do to Sprint’s ability to raise additional funds when and if needed.

It really confuses me when our federal government denies AT&T and T-Mobile the ability to become one company and to reduce the foreign ownership of T-Mobile in the bargain, and then, if the Sprint-SoftBank deal passes, to permit yet another of the top four networks to become not only foreign owned, but to acquire by control a huge amount of additional spectrum from Clearwire. What I don’t see in the U.S. policy for commercial wireless networks is any consistency. There should be one set of rules that is known to everyone and those in the business of providing commercial wireless service should know and understand the rules.

Today it seems that if there are any rules in place they are simply guidelines and each situation is looked at differently. I am guessing that this purchase will fly through the U.S. government because it strengthens one of the four major network operators as opposed to consolidating the top four into three as the AT&T/T-Mobile deal would have done. But at the same time I have to ask whether making money for a Japanese company is something that is okay with our government instead of helping make our network operators stronger within the United States and keeping the re-investment and profits in the United States. I have to wonder what will happen a few years from now when Sprint/SoftBank decides to buy T-Mobile.

Andrew Seybold

However, over the past couple of years, the FCC has stalled a number of spectrum swaps, consolidations, and sales. Am I the only one confused by the FCC’s statements versus actions? The FCC and the Department of Justice put a halt to the proposed merger of AT&T and T-Mobile, a move that would have given AT&T more spectrum for broadband and more towers on which to deploy it. The stated reason was that it would be bad for competition, reducing the number of “nationwide” operators from 4 to 3, and that somehow this would stifle competition and drive up consumer prices. Yet in many other countries there is a trend to shrink the number of commercial networks, and study after study has shown that pricing for voice and data services has come down year after year.

Next up is the still unresolved Verizon deal with a number of cable companies. In this deal, Verizon would purchase spectrum that is not being used and that the cable companies have no intention of building out, in exchange for a marketing agreement that would bring more competitors into the marketplace. As part of this deal, Verizon has also agreed to a spectrum swap with T-Mobile in the AWS-1 band that would make it more practical and efficient for both companies to offer fourth-generation broadband services. Dish network is waiting patiently for the FCC to act on its waiver request to use some satellite spectrum for a terrestrial 4G network that will not interfere with our GPS system as the LightSquared network would have.

While operators wait for more spectrum to be available at auction, including ASW-2 and ASW-3 bands and the incentive TV auctions, they are trying to find other ways to obtain more spectrum as quickly as possible. AT&T bought the Qualcomm 700-MHz spectrum and it took the FCC a long time to rule on that purchase. Now AT&T is in a deal with NextWave for additional spectrum and I have to wonder how long that will take. How can the FCC say one thing and consistently do something else?

Yes, the FCC and the NTIA seem to be working together to “find” additional spectrum, and they are certainly looking at other ways of making spectrum available including spectrum sharing (which I don’t think is a great idea at this point), cognitive and smart radio use, and more. But the fact remains that even if and when they “find” spectrum it will be years before it can be placed into commercial service. It has to be identified, existing users have to be moved somewhere else, it has to go to auction, and existing users have to be given enough time to move. Someone has to pay for the relocation, and once the spectrum is cleared, network construction can begin and devices can be designed to operate on the new spectrum. It is anyone’s guess how long this process will take, but at the very minimum it will be 3-5 years before any of the new spectrum is available for commercial use.

In the meantime, operators are trying to manage the increasing demand in a multitude of ways. The first was that all-you-can-eat data pricing became a thing of the past on most commercial networks. Operators are off-loading traffic to Wi-Fi access points and femtocells within homes and businesses, applying for permits to build more sites closer together (takes time and lots of money), and trying to make deals with other spectrum holders for spectrum that is not in service. It seems to me that the logic here is for the FCC to act quickly when idle spectrum is made available to someone who will put it into use and build out more broadband coverage. It seems to me that spectrum swaps to help provide more efficient use of the spectrum and spectrum purchasing and other ways to make more spectrum available should be welcomed by the FCC and encouraged, not sat on and debated ad nauseam.

Verizon is not my client, but I watch the ongoing battle for what seems to be a simple solution for both Verizon and the cable companies. Take the spectrum that the cable companies paid the federal government for that is NOT in use, sell it to Verizon for more than what the cable companies paid for it, and permit the cable companies to essentially act as Mobile Virtual Network Operators (MVNOs) on the Verizon network. When Sprint, T-Mobile, or one of the other network operators adds an MVNO it is simply announced, no FCC action required. It astonishes me that the Communications Workers of America (CWA), Sprint, and others are fighting this transaction as much as they are. I have read the arguments on both sides, since each week it seems, I receive emails from the CWA about its position on this, and frankly I don’t get it. Like the failed AT&T and T-Mobile Merger, the Verizon/cable company deal should be welcomed and quickly approved.

Cable operators have been interested in wireless since the 1996 PCS auctions when they teamed up with Sprint on the bid. Since then they have, on several occasions, worked with Sprint on joint ventures, all of which were announced with grand fanfare and none of which ever went anywhere. This time around they have spectrum to throw into the pot so they have something to barter with, thus the deal makes a lot of sense. The FCC took what seemed like forever to approve the AT&T purchase of the Qualcomm 700-MHz spectrum. If it had been approved on a timely basis it would already be in service and helping to add capacity to the AT&T broadband network.

Until the FCC and NTIA come together and decide what spectrum will be made available to fulfill the FCC’s promise of 500 MHz of additional broadband spectrum, it seems only logical that they would be in favor of deals that will put more spectrum into service as quickly as possible. Since the demand for wireless broadband is increasing more rapidly than the network operators’ ability to handle the demand, and since there are interim solutions out there involving unused spectrum, spectrum swapping, companies that want to buy spectrum, and companies that want to sell it, the FCC should be working toward a common goal—a goal the FCC continues to restate—of putting more wireless broadband spectrum into service as fast as possible.

Andrew Seybold

In May of 1982 I worked at the IBM Thomas J. Watson Research Center in Yorktown Heights, New York. Along with several colleagues, I was exploring ways to improve the usability of IBM’s mainframe timesharing system of that time, VM/370.

Let me remind you of the state of technology thirty years ago. Personal computers were still largely regarded as hobbyist toys. The Apple II was just beginning to see uptake by businesses. The IBM PC had been launched the previous August and was just beginning to be recognized as a huge and unanticipated success. The MacIntosh was two years away. Mainframe computers represented the majority of the computing power in the world. If you used a computer, you used it at work. There were no tablets or laptops, no portable computers of any kind. The Internet had yet to be born (although its predecessor, Arpanet, was available to universities).

At home, the world was quite different from today. There were no cellular phones or even cordless phones at home. You got your phone from the phone company: desktop, wall, or princess (remember that?). Answering machines were only beginning to appear, and voicemail was an experimental project at IBM Research residing on (again) a mainframe computer. So your telephone was quite easy to use. If it rang, someone was calling. If you wanted to call someone, you pressed the keys, and that was it.

Television was also quite simple: You turned it on and selected the channel you wanted to watch. I had twenty or so cable TV channels, which I accessed through the television tuner. Cable set-top boxes had yet to appear. VCRs had been introduced only a couple of years earlier and were still quite rare. For most people, if you wanted to watch a television show or sporting event, you had to be in front of your TV at the time of the broadcast.

I relate this because at a lunchtime conversation at IBM Research in early 1982, a colleague of mine lamented that if only we could make computers as easy to use as televisions or phones we would make quite a lot of progress. We all agreed that this was a worthy goal.

Now, it is thirty years later. After returning from CTIA in New Orleans a couple of weeks ago, I observe that we have indeed made quite a lot of progress: Our televisions and phones are now as difficult to use as our computers!

It takes four separate remote controls to operate my television, cable box, disc player, and amplifier, and multiple button presses on them to acquire what I want to view. Thirty years ago I simply turned the TV on and it was playing the channel I had last watched.

To make a call on my smartphone I must press two different buttons then tap the screen before I can begin dialing a number. Thirty years ago, I simply picked up the handset and started dialing.

As for computers, well, I will leave them out of this. While still complicated, they have come a long way from the days of MS-DOS or the mainframe timesharing systems. Computers are indeed easier to use than those of thirty years ago.

What has happened?

Our televisions are more difficult to use because they are no longer merely televisions.

Thirty years ago, I had cable TV at my house, but no cable box was required. Rather, the television’s tuner accessed the twenty or thirty available channels. VCRs were beginning to hit the market, and I did not yet own one. So my television was only a television, and the single remote control was all I needed.

My television today is no longer a standalone device. Rather, it is one component of a sophisticated home entertainment system. Its 55-inch high-definition flat screen puts the 1978 Sylvania 25-inch CRT to shame. Instead of the single six-inch speaker in the old TV, I now have a five-speaker surround sound system that provides immersive high fidelity music and soundtracks. Through the cable box, I have access to scores of channels plus movies and special events on demand. I also have a Blu-Ray disk player that delivers beautiful movies from disks the same size as the floppies on my original IBM PC. The player also has a set of applications, including Facebook, Netflix, Pandora, and Vudu that provide access to all sorts of media from the Internet.

Of course, the television, cable box, disk player, and amplifier each have their own remote controls. Turning it all on and off or selecting the proper input or application for the television takes quite a bit of doing. In fact, I have had to write up a one-page document on how to watch television in our house!

While I would not trade the capabilities of today’s entertainment system for my television of thirty years ago, I do miss its simplicity and ease of use. This leads me to ask, what is the source of the complexity, and how can it be reduced? I believe there are two main problems: poor integration among the multiple devices that make up a home entertainment system, and the use of one-way infrared signals to control those devices.

DLNA, the Digital Living Network Alliance, was supposed to solve the integration problem. It provides a means for the various devices to recognize each other and transfer control and media among them. In theory, it should enable me to build a home entertainment system using components from different manufacturers. This is a great goal, but in my experience the reality falls short.

In order to watch television, I must turn on the television, the cable box, and the amplifier. The television and amplifier are DLNA-compliant, but the cable box is not. My amplifier cannot be controlled from my television. It worked with an older television, but not with the newer one. Thus I have two choices: Use the multiple remote controls provided, or purchase a smarter, programmable remote control.

This leads us to the second problem—trying to control multiple devices with a single remote control. Such programmable remotes are surprising easy to program, although I’ve never wanted to spend an hour or more programming them. That accomplished, we are still left with the inadequacies of the one-way infrared signaling system. The key problem is that the remote control cannot know the state of the device it is trying to control. In particular, it cannot turn the device on or off; it can only toggle between on or off.

When I use the remote control to begin watching television, it first sends a signal to turn on the television, then a second signal to turn on the amplifier, then a third signal to turn on the cable box. This takes close to five seconds, during which time I must continue to aim the remote control at the devices. If I fail to hold it steady, one of the three devices will not turn on. If I use the remote to try to turn the others off, those that are on will turn off, and the one that is off will turn on. Thus I must get up and go over to turn it on manually.

Once everything is all powered up, I must still navigate to the Netflix application if I want to watch a movie, and must remember that to get to Netflix the Blu-Ray player must be powered up and I need to select it as the input source for the television. Sound complicated? It is.

Our telephones are more difficult to use because they are no longer merely telephones.

My smartphone is a computer. Of course, since it is a cellular telephone I can use it almost anywhere in the world. And, of course, it does so much more than the corded landline phones of 1982. Today I use Microsoft Outlook on my computer and access the same Exchange server from my phone. My email, address book, calendar, and tasks are all automatically synchronized. This works really well and was simple to set up.

Beyond that, from my phone I can access friends on Facebook and colleagues on LinkedIn. Because my phone has a GPS receiver, I can get driving directions and a traffic app to help me avoid backups. With the browser, I can access any website in the world. Simply amazing from a device that fits in my shirt pocket.

While all of this capability is wonderful, it makes the phone more complex. I must navigate through different screens to access the information I want. Applications I never use clutter the screen. Since my Facebook friends are displayed in the contacts application, I must wade through all of them to find the person I actually want to call.

What is the solution? Better design. This is easy to say but difficult to do well. I’m not about to teach anyone how to build a better television or phone. Instead, I offer three principals that are often lacking in many of today’s mobile phones.

1. Prioritize. What is the most important function of the product? If it does ten things and all of those are of equal priority, the product will be complicated. Having said that, I recognize that different people may use the same product in different ways. For example, I talk much more than I text. With my children it is the opposite. See point 3 for a solution to this.
2. Hide the details. There needs to be more of this in products. Prioritizing the most important functions does not mean other capabilities must be removed. Hide those extra capabilities, but still make them accessible.
3. Support profiles. Great products allow for creation of profiles or customizations. That way I can make the product work better for me, which is no doubt different from the way my children will use it.

I’ve used smartphones based on each of the main platforms, and in my experience they all demonstrate this problem to a greater or lesser extent.

There you have it. I await better designed devices that will make my life simpler!

Robert O’Hara

The operators defend these fees by pointing to the increased cost of the devices and their inability to bear the cost of additional subsidies. Yep. The devices are becoming more expensive. So is the price of gasoline at the pump. But I’ve yet to get a bill from Exxon Mobile asking me to pay an upgrade fee if I switch from regular to premium. There is no mention of how much more it costs to provide that upgraded octane, it simply adds the upgrade cost to the price per gallon.

Operators also claim there is an additional cost to provide sufficient customer support for those purchasing smartphones. Yep. There probably is, at least for some customers, but not all subscribers. The more technically savvy users can handle their own setup. In my personal experience, the only issues I’ve had with setting up my smartphones have been software related when the device was released before the vendor and network operator were in sync and the device and software were not quite ready for primetime. Covering the cost of training and support for new users has been handled quite effectively by the computer industry. It provides various levels of technical support – for an optional fee. Solutions range from short windows of free tech support to multi-year contracts. Customers pay to play.

A recently published PwC survey of trends in the North American Wireless Industry indicates “on average, 46 percent of subscribers are on family plans in 2011.” This means it is not easy, convenient, or economical for loyal customers to go elsewhere for a better deal on a new smartphone and they will most likely stay with their current network.

It is understandable that operators should charge data hogs extra for clogging their networks and causing disruptions in service to other users. It is understandable that operators should charge for enhanced applications that make users’ lives easier and more productive. But is it reasonable to charge subscribers who merely want to take advantage of the newer technologies and enhanced services being offered by the operators a fee to upgrade? Or is it reasonable to do so given the understanding that upgraded phones will result in enhanced revenue to the wireless operator? Does it make sense to initiate a revenue source that will be perceived by customers with the same distain as the irritating itemized fees the airline industry now implements? What’s next? Incremental charges for customer care phone calls? Higher rates to contact customer care over your mobile as opposed to a landline?

Wireless network operators need to meet their investors’ demands for increased stock value, and they need to grow their individual businesses in a commodity market. But they must take into consideration the opinions of their customers and manage their businesses in a customer-friendly manner. My eyeballs already roll when I see my phone bill for our family. Being hit with another “fee” will not be warmly received. Why not simply add the extra $18, $30, or $36 amortized over the normal 24-month contract? Frankly, I wouldn’t even notice an extra $1.50 in the monthly service fee given the plethora of line items currently on my 9-page bill.

U.S. operators are very successful in generating data revenue compared with many other global operators. They should package their offerings so they do not bite the hand that feeds them and avoid negative publicity such as that airline carriers have brought upon themselves.

Bob Chapin

I think Apple has a great new product but the way it is handling early deliveries was not well thought out. It seems that so many people pre-ordered a new iPad that Apple would not have been able to fill those orders and have any of the first batch available for the stores. So what did it do? You know by now that Apple decided to stiff those who pre-ordered and pre-paid in favor of stocking the stores with the new iPads so there would be news stories about the lines outside the stores and those who just have to be in the first wave of new iPad owners. If I had pre-ordered a new iPad I would not be very happy at the moment.

Granted, Apple stated that if I had pre-ordered the iPad it would have been delivered by March 19, but that is not the point. The point in pre-ordering is so you can be the first kid on the block to have and flaunt the newest iPad. Now the guy who lives next door and stands in line on March 16 will have those bragging rights. What does a three-day wait really mean? In the long term not much, but in the short term Apple made a commitment to customers who pre-ordered that they would get their iPad first and then changed its mind. Granted, the change was based on what Apple called overwhelming demand, but I still think that it is unfair to change the rules after the game has already begun.

iPad 2 Pricing

Meanwhile, Apple also dealt a blow to those who want to sell their iPad 2 in order to upgrade to a new iPad. It has lowered the price of the iPad 2 in an obvious attempt to move the balance of the inventory, but in doing so, the resale price has plummeted except at Amazon. On Amazon you can trade in your iPad 2 for a gift card. A 16 GB Wi-Fi-enabled iPad 2 will get you $320 while a 32 GB unit gets you $375 and so on. While a gift card is not real cash, it is still a smart move on Amazon’s part. On eBay there are thousands of iPad 2s available new, refurbished, and for resale. The price to buy one of the new or refurbished units is dropping quickly and individuals who are trying to sell theirs online are competing with stores and dealers selling hundreds of them for discounted prices.

If you have to have a new iPad the best bet is to hand down your iPad 2 to your kids, your mother or father, or even your grandmother. Have you ever seen a kid turned loose with an iPad? Elder adults who are computer phobic also tend to take quickly to an iPad. As all of us who have to be first to have the newest and latest electronic gadget knows that being first comes at a price!

The iPad and the host of tablets has certainly changed the way many of us work, and sometimes for the best. I still won’t give up my laptop, partly because I need to write articles while I am traveling and partly because it syncs with my desktop system every time I return to the office so it has all of my files and information on it. Some will say I should make use of the cloud but I am still not convinced that I will always be able to access my data, and sometimes I need something when I am out of wireless coverage. And I still don’t trust the “cloud” with my data. Too many cyber attacks are happening too often. I view a cloud that is storing not only my information but also that of many other people as a target in the sky. If I were a hacker I would not waste my time looking for small companies or individuals to hack. I would go after the mother lode of data that is stored in the cloud. Yes, you can tell me that clouds are secure and immune from being hacked but tell that to the CIA, FBI, and NSA, all of which were hacked last year. If hackers can get into these sites, how can a cloud service be truly secure?

Conclusions

The new iPad looks like a great evolution of the iPad family. Many people are buying it and the gaming and video communities are welcoming it as a great new platform because of its superior screen. All that is well and good. My iPad 2 does what I need it to do, I have a Wi-Fi-to-4GLTE hub so I already have 4G for my iPad and other devices, and while the new screen would be nice, I will sit out this evolution of the product.

4GLTE is a worldwide standard for wireless broadband and it should enable us to go anywhere in the world and be able to access 4G services. However, while we do now have a worldwide standard, it is a shame for Apple that it is being deployed on more than 42 different portions of the spectrum around the world. Thus there is no way that an iPad or any other device can be built to provide access to 4GLTE everywhere. Someday perhaps we will have a common wireless standard and some standardized wireless spectrum—but by the time that happens my grandkids will have grandkids.

Andrew M. Seybold

In its Petition for Declaratory Ruling, LightSquared is basically saying that it has the right to make use of this spectrum for a terrestrial LTE broadband system even if doing so might interfere with existing GPS receivers. The reason, LightSquared states, is not because its network might cause the interference but rather because the GPS industry receivers were not sufficiently protected as to reject interference from the LightSquared spectrum. One of the most interesting (to me) statements in this document is, “It does not matter whether the Commission characterizes commercial GPS receivers as unlicensed receive-only earth stations that operate under Part 25 of the Commission’s rules, or as unlicensed devices that operate under Part 15 of the Commission’s rules. The relevant precedent under either analysis reaches the same inescapable result: unlicensed commercial GPS receivers simply are not entitled to interference protection from LightSquared’s licensed operations in the MSS band.”

What this really says is: We don’t care if we interfere with GPS receivers; it is not our fault but the fault of the receivers, which should not be afforded any protection in any event; this is our spectrum and we want to use it for a purpose for which it was not intended regardless of the outcome. I cannot believe that this document was well received at the FCC, and to me it shows how desperate LightSquared is becoming as it digs a deeper hole for itself, or rather a number of holes.

The first problem is that it may, according to some sources, be running out of money. Next is the fact that its deal with Sprint was supposed to expire at the end of 2011 but Sprint gave LightSquared a thirty-day reprieve to obtain permission from the FCC to build its terrestrial network. The FCC has never acted on anything I can remember within thirty days—certainly the FCC does not care about these types of business deal deadlines. Congress is stirred up about the GPS interference as is the DOD, FAA, and other agencies, and now LightSquared is basically threatening the FCC by demanding to be permitted to use its spectrum for something other than what it was originally licensed for (satellite communications with SOME infill of terrestrial stations to cover dead spots). Not only is it threatening the FCC, LightSquared is also saying that it doesn’t have any obligation to fix any interference problems it creates to GPS systems including those that could result in deaths and severe accidents if GPS devices fail to work properly.

The only word I have for LightSquared at this point is “arrogant.” It followed a method of selling wholesale services prior to having a network in place to “prove” it is relevant. It is also promising lots of new jobs and an influx of revenue. LightSquared hit the scene when there were questions about the number of network operators, yet neither the FCC nor the Department of Justice took it seriously enough to help mitigate the ATT/T-Mobile merger. Instead, the ATT deal died because it would reduce competition and stifle competitiveness—which we all know is simply not true. I have to ask if LightSquared was a serious player, wouldn’t the FCC and DOJ have taken that into consideration before they opposed the merger?

Since they did not, do you suppose there is a reason? Perhaps both the DOJ and FCC saw the writing on the wall and decided that LightSquared was not a serious competitor to AT&T and Verizon since LightSquared doesn’t even have permission to build out its network. Or perhaps both the FCC and DOJ are aware of the true investment that must be made by LightSquared and decided that the company does not have the resources to make its network happen. In any event, it appears as though LightSquared may be taking its last breaths of air, and that means it is getting desperate, pulling out all of the stops for permission to build out its network. But what happens if it fails to gain the approval of the FCC, and Congress is in a position to stop the FCC from giving LightSquared the green light? While Congress doesn’t control the FCC, it does control the FCC’s funding, which is the same as controlling the FCC.

So if LightSquared tanks, and I think it will, what is next for it and the industry? The partial answer is that LightSquared spectrum value would drop dramatically, its investors would take a beating, and the wireless industry is back where it started except that the thirty or so companies that signed up to resell the LightSquared broadband service are now in the wind. However, the names of these companies are now known and it won’t take long for the nationwide network operators to propose agreements with them and see if they really have the stomach for the type of investment it takes to play in the wireless market space.

My best guess is that of the thirty companies that have signed on to the LightSquared network, only about ten have the desire to proceed to bring LTE into their markets. Perhaps the rest of them will go back to what they were doing prior to the LightSquared deal, or perhaps they will try to work with another operator and come face to face with the reality of the marketing dollars involved in entering the wireless marketplace. No matter what, not all thirty-plus of these companies will ever be in a position to offer wireless broadband services. Rather, I think that many of them have been sold on the wonderful opportunities as portrayed by LightSquared and that when reality hits them in the face, many will simply cut their losses and go home. Wireless broadband service is about size and scale, money, spectrum, and above all, marketing dollars. Regardless of what they have been told by the LightSquared folks, selling against the big guys won’t be an easy task.

LightSquared is a perfect example of companies bitten by the wireless bug. They never open a spreadsheet and go to DC with a story that those who make the rules want to believe: Affordable broadband for all, very quickly; an opportunity to provide broadband in competition with the big boys; and the ability to make money in markets where no money has ever been made before. This is merely a pipe dream but giving LightSquared credit, it has certainly stirred up a hornet’s nest and made promises it cannot possibly keep.

So I, for one, hope the FCC and Congress stick to their guns and don’t let the false promises of a zillion new jobs and two zillion in income sway them to even consider permitting LightSquared to build a terrestrial system in this spectrum. We cannot afford to have any network that could, potentially, disrupt our GPS system. It would be a disaster and all of the jobs promised and the infusion of dollars promised could never make up for the loss of a single life because of the malfunction of a GPS receiver due to interference.

Andrew M. Seybold

When you look at the United States on a market-by-market basis it is clear that in most major markets there would still have been five or even six competitors fighting for customers and both LightSquared and Dish Network have expressed a desire to enter the LTE market. Add to that the fact that Verizon has cut a deal with the major cable companies to not only purchase their spectrum but for these companies to become resellers on the Verizon network, and there are at least one if not two more competitors on the horizon.

Now mix in the fact that while the FCC has pledged to “find” an additional 500 MHz of spectrum that could be auctioned for wireless broadband services but the dysfunctional Congress did not include spectrum auctions in any of the end-of-year legislation, meaning that there will be another delay not only in making this new spectrum available but also in permitting the FCC to auction spectrum it has already identified. Even when this spectrum is finally released for auction it won’t be available for networks to build out for three to five years depending on how long it takes to “clear” (relocate) existing users of the spectrum identified.

An issue that has not been addressed is how many wireless network operators can thrive and survive in the United States. We are already near 100% saturation of the population and the growth of wireless is expected to move toward 300% penetration as we all opt for multiple devices and more devices are coming to us wirelessly enabled. The economics of entering a field that already has five or more competitors per market is tough. Building a network from scratch will cost $billions, the operational expenses (opex) associated with LTE, for example, are considerably higher than the opex for 2G and 3G systems because the backhaul from each site has to be high-capacity capable, meaning that it needs to be fiber or microwave and not the standard voice-grade telephone circuits used in the earlier systems.

This all comes back to how many competitors can survive in the market. The answer is unknown but if we look at China as an example, which is a much larger market than the United States, we see that what China did might be the correct way for us to move forward. A few years ago there were six competitors in China but today there are only three. The government decided (because it can there) that it would consolidate the six networks into three, giving each of the remaining three the ability to build out more cell sites since each site would have more customers, meaning that the networks could afford to build coverage in more areas of the nation. So far this plan has been working, and the price of wireless services in China continues to come down even with only three competitors in the market.

There is consolidation occurring in Europe as well. Some is due to the typical buy-outs or mergers of companies and some of it is companies coming together in joint ventures in order to be able to build a single network that two or more companies will share. Canada is doing the same thing.

If those making the rules (those in DC) better understood the dynamics of the growth in demand for wireless services and the competition that is already pushing the cost to customers down year over year, perhaps they would realize that market forces are more powerful than regulating competition. Clearwire is a perfect example of market forces at work. It has burned through a ton of money, and while its subscriber base is growing, it is not growing fast enough to stop the bleeding. Now Clearwire is being forced (by market circumstances, NOT regulations) to move to LTE in the hopes that such a move will help it gain more market share. Sprint is also moving to LTE, again, not because of regulations but because the market demands that it do so in order to keep its existing customers and gain additional customers.

Demand for broadband services is going through the roof and there will be no leveling off of this demand in the future. More smartphones are finding their way onto the wireless networks, more tablets, and now ultrabooks. People and companies trust the cloud to store their data and in some cases, applications, and the only way to access the cloud is via a broadband connection. Recent reports continue to show wireless broadband growth of triple digits, and the network operators are trying to figure out how to manage this growth.

Most network operators are engaged in a multifaceted plan moving forward. This involves the end of all-you-can-eat data plans and re-invokes usage-based pricing as a way to manage demand across the networks. It also includes building out more cell sites closer together (a two to three year task in many areas), off-loading broadband services to Wi-Fi, selling femtocells for use in homes and offices where the backhaul is provided and paid for by the customer, and trying to obtain more spectrum where it is needed.

Spectrum is the currency of the wireless network operators. Going back in history, most of the mergers and acquisitions were about spectrum—who had it and who needed it. Spectrum is a finite resource and while Congress and the FCC are trying to figure out the spectrum auction deals, the network operators need more spectrum. After blocking the AT&T/T-Mobile deal, today the Department of Justice said it would investigate the recent deals Verizon made with some of the major cable companies. As you might recall, Verizon bought these cable companies’ spectrum assets but it also set up a resale deal so the cable companies can resell on the Verizon network.

Congress should ask the cable operators why they were so willing to sell this spectrum. The answer is simple. They bought it at auction because wireless is the future. Then they ran the numbers and found out how expensive it would be to build out and operate their own networks, to come to terms with other networks for roaming agreements, and the marketing dollars it would take to compete. Based on this, a few continued with their existing deal to resell on the Sprint network and had little success. Cox was in and out of the Sprint resale deal within six months because the uptake of its service was disappointing and the phones it had available were not competitive with those of the larger or even regional network operators.

After the cable companies did the math it was obvious that they needed to bail out of the do-it-yourself wireless network business. Verizon wanted the spectrum and offered the cable operators cash for the spectrum plus the ability to resell on the Verizon network, which, I assume, also means a lot more phones and other devices will be available through the cable operators. In my opinion the deal makes sense all around. It is a market-driven deal and should stand as made.

In the United States we pay some of the lowest prices for both wireless voice and broadband services. Our coverage has improved, and both AT&T and Verizon have pledged to and are working at extending their networks or their reach with partnerships to cover more of rural America and the market-based approach to competition and services continues. There is a saying that “if it isn’t broken don’t fix it.” In this case, the wireless market in the United States is not broken so the government should be leaving it alone—not tweaking it or trying to fix it.

Andrew M. Seybold

The issue in both cases and in others is that the U.S. Government is concerned about alleged ties that Huawei has with the Chinese military. The thought behind this activity is that Huawei might include an easy to access hole in its systems so the Chinese could sneak in and snoop on those using these networks or gather data for use against the United States. From my perspective, this is simply paranoia on the part of some within the Federal Government.

I guess this also must apply to ZTE but why doesn’t it apply to all of the manufacturers and vendors whose products are built in Chinese plants and then shipped into the United States? How do we know that the factories that build this equipment and the mobile devices are not running over with Chinese military types who are busy embedding harmful software code into these devices that they can activate and use for snooping or to bring a network down? Paranoia is rampant in Washington, DC, that is for sure.

To those of you who say we should buy American, I agree. However, most of the leading suppliers of wireless infrastructure are NOT American companies. Alcatel-Lucent used to be American, now it is a French company, Ericsson is a Swedish company, and Nokia-Siemens is a Finnish company, so buying American is not an option. All of these companies have plants in China or contract with plants in China to build much of their equipment. Further, a large number of the wireless devices on our networks are also built in China and I fail to see the rationale in preventing Huawei from taking part in either our commercial or public safety wireless networks.

Besides, the Chinese military does not need any help from the likes of Huawei to monitor, access, or break into any of our networks. It and many other countries have scores of talented Internet hackers who do nothing but attempt to access various commercial and government sites all of the time, and with considerable success. I might add that I am sure we have a like number of very smart hackers working in various departments within the Federal Government doing the same thing to them.

Competition is a good thing and Huawei has been successful in many other parts of the world. From what I have seen, its backend and infrastructure equipment is well designed and well made (NO, I am not a consultant to either Huawei or ZTE nor have I ever been). I look at what is happening and cringe when people with the power make decisions based on paranoia rather than rational investigation. In fact, Huawei has on several occasions offered to have its company investigated but so far the United States has not taken up the offer.

So not only do we lose at least one if not two viable competitors in the U.S. market, we also lose jobs when we can least afford to. Huawei has a large presence in the United States which will, I believe, now be cut, leaving some very talented U.S. citizens out of work at a time when every job we can create is vital to us moving forward.

If someone wanted to embed something into one of our wireless networks or create a back door for illegal entry it could be easily done. Suppose you wanted to accomplish this. All it would take is to pay off a single engineer or software developer who is working for one of the “approved” companies and have him or her do what was needed to open up a network for intrusion. BUT, and this is a big but, those who work on these networks work hard to make sure they are not vulnerable. When they do find a vulnerable spot they fix it posthaste. Think about all of the software that has been delivered with bugs and other issues hackers have exploited. Many of the operating system companies have released patch after patch to plug these holes, and IT professionals and others are playing a cat and mouse game daily with hackers all around the world. We put up the best firewalls and software to prevent intrusion, the hackers find a way around it, we fix that, and then they find another point of access. As long as all of these networks are attached to the Internet they are vulnerable, plain and simple.

One of the issues we have is that many internal networks have far too many connections to the Internet. The smart organizations and companies have very few and these internal networks can be disconnected from the Internet easily and quickly if there is an attack. Unfortunately, this is not true for many companies and even Federal, state, and local agencies. Many of these organizations may not even know how many they have across their company or organization, especially if they have many different locations around the country or even around the world.

What about the devices on these networks? What about the lack of security built into Android devices and the amount of malware showing up in Android applications because they are not tested or vetted before they are released? A single device or multiple devices on the network can do a lot of damage or gather a lot of information if it has been prepared to do so. What makes the Federal Government believe, for a minute, that banning one or two qualified vendors from providing equipment in the United States will ensure our network safety? Networks are interconnected too, so if a network in Canada or Mexico uses Huawei infrastructure and it is connected to a network in the United States, isn’t that just as dangerous to us?

So I don’t get it. Why are some within the U.S. Government so paranoid that they are building a case for both Huawei and ZTE being excluded from providing infrastructure within the United States? There is an offer on the table from Huawei for a full investigation of the company that the United States has not acted upon, and I have not seen our Government investigating any of the other companies with products being built and even designed in China. I guess free trade only means free trade when we agree to it, otherwise we have the ability and the authority to keep a company out of the United States based on some “fears” that they have secret ties to the Chinese Army. There are many companies that are partially funded by the Chinese Government, and as I mentioned before, much of the equipment that is sold and installed in the United States from the other “permitted” companies is made in China.

When asked about their fears, those at the Commerce Department said that information is classified. Do they mean classified or do they mean that someone within the Commerce Department is paranoid and was able to convince others that they should be as well? I have to wonder how this will all end up and how many other companies that provide jobs within the United States will be banned from doing business here because they might have ties to the Chinese Government.

Andrew Seybold