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« Ask Two Glenns | Main | Washington Ferries Launch Major Run »

January 20, 2005

Journal Lays Out Broadband Wireless Landscape

The Wall Street Journal exhaustively surveys the lay of the land for broadband wireless deployment: I estimate that this article took a few dozen hours and weeks of reporting--some of which surely found its way into other articles--to pull together because of the number of companies and technologies involved. It's a great overview that focuses on WiMax, metro Wi-Fi, and other broadband wireless as an alternative to the wirebase that's needed by cell companies and service providers who don't own copper.

I particularly like the neat turn of phrase that encapsulates the entire WiMax branding and hype problem: One of the technologies drawing the most attention is WiMAX, which is similar to the popular Wi-Fi standard that millions of people have used to set up wireless networks in their homes but is slated to have a range of several miles. Since WiMAX has yet to be certified, companies are using precursors to the technology.

Exactly. Precursors aren't necessarily worse, but they're not interoperable and they don't bring the benefits of mass-market standardization to reduce the CPE (customer premises equipment) that will ultimately make broadband wireless affordable to the average home instead of a subset.

I love this bit of specious reasoning quoted about the landline side of things that are causing this competitive wireless marketplace to emerge. The Bells argue that they shouldn't be forced to share their lines. "We're incurring all of the costs of building these networks and we don't feel we have to share them with our competitors below what it costs us to build and maintain our network," says BellSouth spokesman Jeff Battcher.

I don't think anyone has ever asked the Bells to subsidize the cost, but rather to provide an accounting that shows the true costs. It's clear that because the Bells can bundle services and make money across an entire customer package that they have every motivation to make their wire costs much higher to discourage having to resell access at a price that allows competition. In other words, if the Bell companies can arrange a markup over costs, why can't they resell at wholesale with a margin for competitors? They can, but they want it to appear as though they can't to preserve their bundling profits.

Also, I guess nobody every explained to Mr. Battcher that monopolies, natural or regulated, are subject to different rules than companies competing without any advantage. The Bells own the wire; they should be forced to share unless you believe that consumers should pay the maximum possible price rather than the optimal price decided on by a marketplace. Those focused on business returns and shareholder value would argue the highest price the market will bear is best; those focused on consumer issues might maintain that more competition would produce an ideal price set by the contention of service in the bazaar.

But broadband wireless coupled with pressure from cable operators has at least forced a semblance of competition with much, much more on the way.

What's most important about the survey of the landscape in this article is that it shows how widespread the tests are already by major firms and how many tens of billions will be poured into all forms of broadband wireless in the very near future.

5 TrackBacks

broadband wireless networks from The Mediaburn Radio Weblog on January 20, 2005 9:40 PM

Journal Lays Out Broadband Wireless Landscape . Read More

These days, it is not that hard to see how people can confused as to which type of wireless is which with all of the different standards out there. now throw in some of that 'ol WiMax into the mix,... Read More

These days, it is not that hard to see how people can confused as to which type of wireless is which with all of the different standards out there. now throw in some of that 'ol WiMax into the mix,... Read More

These days, it is not that hard to see how people can get confused as to which type of wireless is which with all of the different standards out there. Now we throw in some of that 'ol WiMax into... Read More

broadband wireless networks from The Mediaburn Radio Weblog on January 22, 2005 7:01 AM

Journal Lays Out Broadband Wireless Landscape . Read More


First, let me say that I am a regular reader of your blog and appreciate the time news and information.

Regarding your position that CLEC's be allowed to play on the Bell's turf, I think that is a near sighted perspective. It looks good to the consumer as you mention that competitive services be offered as a matter of regulatory requirements, but in the long term it reduces incentive to innovate. In fact, whether wittingly or not, you recognize the that wireless and cable companies have forced a semblance of competition. Is this not as it should be? Market barriers are the very force which produce alternatives and therefore real competition. It may not happen as fast as a regulated, artificially competitive market, but the outcome is clearly superior. On the contrary, I would argue that telecom regulation has stunted development of competitive technologies in the past.

A perfect example is the Korean broadband market: a mere decade or so ago, the government provided a vision and incentive to telecom co's to develop a national broadband infrastructure, yet they left the carriers largely unregulated. Carriers weren't forced to share their fiber, consequently many apartment dwellings have 2 or more fiber services to choose from. The Korean broadband market exploded and now leads the world with broadband penetration exceeding 70%, with average speeds of 8Mbps or higher. Sure, there are other factors impacting the rapid development, but the point is that unfettered competition has resulted in a stunningly rapid deployment of the broadband infrastructure. I think the same could happen in the US, and indeed is beginning to happen as the FCC seeks to reduce the regulatory burden on the telecom carriers.

I would have to agree with the previous commentor. The commercialization of VOIP has completely nullified the need for unbundling rules. At the time, 10 years ago, it may have been appropriate becuase Cable would not have been able to emerge as a competitor to the RBOCs. I am not so sure it actually stunted development of VOIP and other communications technologies. However, today Cable companies are the new force of competiton with the introduction of digital voice as they are calling it(VOIP). Still the cable companies are "Regional" and rarely compete with each other and none are national. Therefore, one could still aurgue that 2 competitors does not make a complete competitive environment. WiFi and voice over WiMax could provide added competion. But, in General, I believe UNEP and unbundling is no longer the answer. The answer lies with ubiquitous broadband. If you have access to broadband, you will be able to communicate and have lots of options.