This page is an archive from our previous website. Please check out our new website where you can read new COMMENTARY eNewsletters, TELL IT LIKE IT IS blog posts or Press Releases.
Unless you have people around who have been there and done that, you might not understand either the limitations of wireless or the opportunities.

A Lot Going On!

Sunday, July 22, 2007

This past week was a busy one for the industry as Google threw a $4.6 billion hat into the 700-MHz spectrum ring, Verizon Wireless cut a deal with Broadcom to ensure it would have a supply of phones with the Qualcomm chipset, Amp’d filed for chapter 11 bankruptcy protection, Sprint and Clearwire announced a partnership for a full, nationwide WiMAX network that would provide service to up to 100 million people by next year (I guess the other 200 million of us aren’t part of the nation…) and I was treated to demonstrations for products that, I believe, will have a huge impact on the wireless industry moving forward.


Let’s start with Google. It wants to spend $4.6 billion in the 700-MHz spectrum auction as long as the spectrum requirements include 1) open applications, 2) open devices, 3) open wholesale services and 4) open network access. Steve Largent, President and CEO of the CTIA—The Wireless Association®, responded with what I think is the correct answer: “If Google is willing to commit almost 5 billion dollars for spectrum that it wants encumbered with various requirements, then let it win that spectrum in a competitive auction and choose that business model.”  I agree with Steve. What Google is trying to do is make the spectrum of less value to incumbents so it can swoop in and end up with a nationwide network of its own.


Steve has the right idea—let the auction remain open and fair and let winners decide on the proper business model for their own networks. If Google wants to run an open network, where devices can be bought from anywhere and placed on the network, applications and data can be downloaded at will and the network is open to everyone, then they should show up at the auction, bid against all the others and then build a network that meets its own criteria. There is nothing I can see that would limit what Google wants to do with its spectrum. NextWave’s original business model was a wireless network provider that would resell voice and data services. It might even have been a good model, but the timing wasn’t right and it didn’t have the funding.


If you look at the Internet model, Google runs its site the way it wants to, as do eBay, Amazon, Yahoo! and more. Yes, I hear you saying, “but anyone can attach to the Internet with any device they want, go to any site they want and download whatever they want”—which is all true. The point that everyone who has never worked with wireless is missing is that spectrum, even the 700-MHz spectrum, is a finite resource and if it is not managed—there I go with that word again—it won’t be able to handle all of the data and voice required by consumers. When Google needs more capacity it buys more servers and adds some capacity between the servers and the Internet. When AT&T Wireless runs into a capacity problem, it manages as best it can and then starts a tedious 3-year program to add cell sites.


If Google were really smart, it would show up at an open and fair auction and win spectrum, then sit down with other players and use that spectrum, which is now converted to wireless currency, and make deals. Another point for Google to consider is that there are a number of organizations working on the issue of broadband coverage for Rural America. I have been working on my own 700-MHZ Rural America plan, which is almost completed, and I will be unveiling it soon, but I don’t hear anyone from Google talking about the underserved.


Enough on Google and the 700-MHz situation and on to my comments on Verizon Wireless and its deal with Broadcom. Yes, I think the ITC is wrong to try to ban phones and, yes, I think Verizon Wireless is right to do whatever it takes to make sure it has a supply of phones, even at the reported fee of $6 per month. By the way, I wonder if things would be different if the iPhone contained a Qualcomm chipset. It seems as though those who are entering the wireless arena late have more clout than those who have already paid their dues.


Amp’d having to file for chapter 11 bankruptcy protection is not a good thing, but the open access people should pay attention. Open access does not mean free access, it means wholesale access and spending $millions on marketing, products, support and all of the other things that go along with being an MVNO. The only thing they don’t have to pay for is the equipment in the ground, its maintenance and the backhaul to handle the traffic. Even so, being an MVNO is an expensive undertaking, and there is no guarantee of success.


Okay, I certainly cannot miss an opportunity to comment on the Clearwire-Sprint Nextel joint venture to build out WiMAX for use by the entire U.S. population with 100 million POPs covered by the end of 2008. In the press announcement, Sprint says, “The planned arrangement, which is set out in a letter of intent, is expected to provide broad benefits to consumers, businesses, educators, the Federal government and public safety users by fostering quicker, broader and more efficient deployment of a mobile WiMAX broadband network than either company could accomplish on its own.”


Interesting wording to me—perhaps we don’t need the Cyren Call or Frontline proposal for first responders in the 700-MHz band if this joint venture is to provide access for the public safety community as well as everyone else in the United States. So my prediction here is that this won’t help WiMAX become a major factor in the United States, it will mean that a lot of money will be spent building out this network, and I’m sure Intel is thrilled with this announcement. So far, Clearwire’s most important accomplishment is to spend money, a lot of money, for not many subscribers, and at data rates on a par with or slower than data rates from other networks or other types of service. I know, just wait until mobile WiMAX is deployed and everyone is carrying an ultra-mobile device to access the Internet—the same Internet we get on our desktop instead of a mobile-friendly Internet. Perhaps this network and Google’s network will go head to head!


As for the new products I have been reviewing, prepare yourselves for another set of changes in applications, software, devices and capabilities. There are some exciting new technologies on the horizon, many of which will move our wireless devices toward the vision that a few of us have been discussing for a while now―a true command-and-control device for our lives, the focal point of our entertainment choices and more. Applications that turn our devices into true social networking platforms, that provide real-time traffic reports (as in 30-second updates) not only for highways but all roads covered by wireless services, a new entertainment media and ecosystem that will empower our wireless devices to become our entertainment consoles and finally a way to purchase a phone, go to the Internet, program all of the features and functions, experiment with new applications and, when you are done, push a button and have your phone fully programmed to your satisfaction without having to touch a single key on the phone.


Life is never dull in wireless, and with all the potential newcomers it promises to be even more exciting and move at an even faster clip. But one thing that is missing is a meeting of the minds of those from the Internet side who don’t believe wireless is difficult or should be any different than the Internet with those that know the restraints that physics plays, and that wireless is still part science and part black magic. Unless you have people around who have been there and done that, you might not understand either the limitations of wireless or the opportunities.

COMMENTS: This is an archived post. Commenting is no longer available.

Harlan Ohlson - 07/24/2007 09:30:03

From: Ohlson, Harlan [mailto:OhlsonH@WSDOT.WA.GOV]
Sent: Thursday, July 19, 2007 5:23 PM
Subject: PSST?



Read you short comment about you're coming out with a "Rural 700 MHz Plan".

Inserted is an Email I sent to Harlin illustrating my concern, that possible Rural PS build outs might be neglected, & that PS needs to work towards a Standard for Rural as well as the high population centers, to build Rural simultainiously to City build outs.



When I first heard there was now a "PSST", I thought here we go again another specialized alphabet organization further from the core reality.

Since then I have been made aware of the "ERC" & digested the "Agreements on a National Plan for Interoperable Communications".

When I saw you were involved I felt much better about what I was hearing.

I feel I now understand somewhat of what is going on & why you folks who represent us in PS are doing what you are doing with post haste trying to be ahead of what the FCC decides to do with 700 MHz to assure PS the best results.!

We had concern for the possibility of loosing broadband 700 MHz spectrum.

Please let me digress from my point of view on this "National PS Network" concept.

Any National Network System must be proceeded by a Planned Structure of use first.

Everyone will need to know who they can & are allowed to communicate with.

In other words, not everyone needs to function vertically from top to bottom in the National Network communication tree. This will minimize costs for who pays the costs.

There will be many reasons for horizontal communications within a reasonable vertical component.

Put it in a more illustrative way, a person at the lowest organizational level won't need to directly talk with the President. (Unless they are the last standing!!)

That being said, if the commercial is wedded to the scheme of things, the number of increased subscriber units should drive PS costs down per unit.

Any commercial entity providing PS access to a National Network System , should be mandated to provide a standardized level of service to Rural areas.

The core high concentrations location build outs should only exceed the Rural build out level - if in fact - their related Rural basic build outs are actually done in a synchronized way! My concern is that I see added capacity & the Commercial profit margin driving the train instead of PS in the Rural service areas.

Thank you for helping all of us in PS by helping lead the Charge!


Harlan D. Ohlson

Communications Systems Manager

ITS Communications & Wireless Technologies


7345 Linderson Way

Tumwater, WA 98501

PO Box 47359

Olympia, WA 98504-7359


Fax 360-705-6873

*** eSafe2 scanned this email and found no malicious content ***
*** IMPORTANT: Do not open attachments from unrecognized senders ***

Andrew Seybold - 07/24/2007 11:30:49

Harlan--thank you for your comments--yes I have been working on a plan for Rural America for some time now, trying to come up with a way to insure that First Responders, companies, and customers will be able to connect to broadband services--the idea is not new, my methods and recommendations might be, but the goal is the same--there must be a cooporative effort put forth by many different types of players, all sharing common goals--I am not necssarily talking about spectrum sharing, but rather goal and infrastrucutre sharing.
Thanks again for the comments and a copy of the letter to Harlin--I have said many times over the years that the First Responder community needs to band together for the good of the industry and I am very happy to see this happening.
Best regards


Tyler  Bolender - 07/24/2007 14:39:26

Thanks for your ideas here, although I would encourage you to read this study:

This provides a sound economic framework for auction design.