Supernova 2007: because technology is everyone's business

Friday, June 23, 2006

Cutting the Cords: The Wireless Explosion

Moderator Om Malik, Business 2.0 explores the future of wireless and wireless broadband with these panelists:

Clint McClellan, Qualcomm
Selina Lo, Ruckus Wireless
Pierre De Vries, USC Annenberg Center
Juergen Urbanski, Fon

Here are the highlights of this sometimes lively debate:

Q: Where do you see the wireless ecosystem evolving in the next five years?

Ruckus: We believe in wifi, which has surpassed Ethernet as the most popular LAN networking tech for the home. The problem with wifi is, it can’t reach far, there are coverage problems and unpredictable performance. We have a wide installed base of carriers who distribute IPTV from the home gateway and the set top box. They want to watch TV anywhere. Today, houses are not wired for the TV where ever you want it. Getting TV on screens and mobile devices, watching DVT recordings on the train is on the horizon.

Q: With high def TV and large files, what is the minim bandwidth in the home?

USC: There is a transition to digital TV in the US, which will free up spectrum for in home, between home and metro area. Above 700 mega hertz will be auctioned off. Below that, there will be TV stations. In each city there are effectively 15-30 vacant channels. The FCC says you can operate broadband wireless in these channels without interfering with TV. The most efficient way to allocate these would be to have them unlicensed. There will be different business models for the licensed and unlicensed channels. You’ll get wifi plus, and wireless ISPs will be able to create networks more easily. The mesh application will enable neighborhood meshes to get inside homes.

Q: Why should we pay attention to Fon, and what are you doing in this ecosystem?

Fon: Anywhere in a city, there are up to 25 hotspots in range. If you see the list, they’re mostly secure/private, or they’re commercial and you pay for access. The price points are geared toward business customers. Coverage is universal in metro areas, but basic access is not. If we all trusted each other, you could invite people in the vicinity of your home to use your bandwidth, which isn’t at capacity. We provide a Linux based authentication system that lets people roam for free among their peer networks, or at an affordable fee. We change the economics. We don’t require special equipment. People download the software on their router or buy one from us. It let’s us share the excess bandwidth, bringing it into reach of the consumer.

Q: If you read your terms of service with your carrier, you’re not allowed to resell bandwidth. Whey should they run the risk of using Fon?

Fon: The large ISPs have terms that say you can’t share bandwidth. We’re talking with the large ISPs in the US. There is a value prop for them, because they’ll get a share of the revenue that we take. If you look at the economics, you access the internet several days a month, it’s cheaper to become a broadband subscriber than to pay for access at the commercial access points. Muni wifi and Fon are complementary. Mini wifis are highly political processes with RFPs and long lead before deployment. Fon is grassroots, already here. The overlapping and conflicting objectives of cities can’t be met by one provider. Muni wifi is from the street in. Fon is from the home out.

Q: Do you see a battle with open wireless?

Qualcomm: There’s a place for all of the technologies. There is value in buying spectrum, because you can get greater coverage. Unlicensed spectrum that’s free is highly competitive. Anyone can get in there and start a business. Mobile phone subscribers are paying for future build out of the 3g network. Between 3g tech and wifi, it’s hard to see where anything else fits. If you have embedded 3g and wifi, what are the other choices? As the functionality and capabilities increase, and mobile phones become 3g enabled, you can use your phone as your internet connection.

Q: If you have carriers that restrict use of their networks to subscribers, is that enough incentive for free spectrum carriers to emerge?

Qualcomm: If one company gets into it, others will follow. The incumbents have coverage as a primary asset. Today, wherever you go, there is good coverage. You can change a business model to chase rate plans and user plans, but not to build out coverage where it doesn’t yet exist.

Q: If you have Comcast at home, then another carrier on the road, it’s frustrating for the user.

Ruckus: If you can have a wireless skype phone, and there is wireless access at all of the hotspots, you can get cheap long distance. With licensed spectrum and prices coming down, bundled services still won’t satisfy customers. Long distance is expensive.

Qualcomm: You may save money on calls, but you want to make a call where ever you are. And you’ll want to have data where ever you go. You don’t want to look for hotspots.

USC: The distinction is edge in or center out. Unlicensed networks let you innovate to deploy. Quite a few of the Connected Innovators were making widgets you can get help navigate the different networks.

Ruckus: Whether you have free, bundled or by the minute service, users shouldn’t have to worry about switching carriers.

Fon: The future we see is where wifi access is ubiquitous and accessible. The medium term future, we’ll have a variety of network connected devices shifting between carriers. The question is what applications you can layer on to create new value.

Q: One group not represented on the panel is the end user. There is user pain to adopt the tech – connecting to, using and switching between networks. Who will think about the end user?

Ruckus: Users get frustrated about reliability. You get used to having mobile phone conversations cut off, but if you’re watching a World Cup game, you wouldn’t tolerate losing service. Wifi is great for data and voice, things that aren’t mission critical. It has a way to go before it robust enough to support mission critical services.

USC: The internet is driven by protocols. One way to solve the problem is Real Simple Networking protocol that offers a choice. The networks that could make this available would need to work together. There’s an opportunity for revenue sharing. But the carriers don’t want to be a dumb pipe. They want to offer services. If a device offers a quality of service that users value, users would pay for RSN.

Q: Users want to be able to roam without paying 60 cents minute. How do you get a happy customer who is happy to pay?

Qualcomm: The carrier business model is to charge roaming charges. We try to add applications that give you extra services, such as song downloads or TV downloads.

USC: Competition within a given regulatory regime and between those regimes will create an ecosystem where we can test different assumptions. Diversity will solve the problem, but it will take time.

Q: What Web 2.0 applications will drive users to use the wireless connectivity?

Ruckus: One of our customers is a carrier that offers services that distinguishes them from pipe providers. They offer IPTV over DSL network. Now, they’re moving on to allowing people to watch IPTV from a hotspot using a laptop or handheld devices, and offering services that lets subscribers place wifi cams in areas of the home they want to monitor. These require reliable wifi access. They provide the devices that enable these services, and they’re monetizing the services.

Fon: From VoIP to IPTV, to more community based approaches where you can tell if your buddies are in your proximity, to gaming where they can become mobile.

USC: If you step back and look at the phases of communication: from the cloud to the user, then user to user, to devices communicating with each other. That will be come a source of applications.

Qualcomm: Your phone knows where you are and who you are. Soon it will have wifi and Bluetooth. We can then build push services, like alerts about events or presence or coupons.