Tech Visions: Wireless sale of the century
$15bn band grab could spark mobile revolution…
The auction of the last great chunk of US broadcast spectrum gets under way in the new year. This event could turn out to be a defining moment for the future of mobile computing, says Silicon Valley-based Howard Greenfield.
One of the greatest communications auctions of all time is about to begin. America moves from analogue to digital television in 2009. It is that shift which has opened up the 700MHz wireless spectrum for auction by the US Federal Communications Commission (FCC) in January.
Wireless from A to Z
Click on the links below to find out more…
A is for Antivirus
B is for Bluetooth
C is for The Cloud
D is for dotMobi
E is for Email
F is for FMC
G is for GPS
H is for HSDPA
I is for i-mode
J is for Japan Air
K is for Korea
L is for LBS
M is for M2M
N is for NFC
O is for Operating systems
P is for Pubs
Q is for QoS
R is for Roaming
S is for Satellite
T is for TV
U is for UMTS
V is for Virgin
W is for WiMax
X is for XDA
Y is for Yucca
Z is for Zigbee
The bidding is expected to raise between $15bn and $20bn from organisations including Apple, AT&T, Cox, Google, NTT DoCoMo and Verizon. But, money aside, the auction could initiate a new era of mobile computing.
The availability of this prime communications spectrum is one of the biggest band grabs of the century heralding "truly next-generation advanced wireless services", according to FCC chairman Kevin Martin. These services would offer improved, cheaper and better integrated mobile phone calling, web surfing and video for consumers.
But what's the catch? The dream is compelling enough. We can imagine improved quality of current services, commodity bandwidth for existing wireless devices, universal communicators for families, cross-country RFID, medical device monitoring and more.
The technology cycle that generated the iPhone, a precursor to mobile devices of the future, is just beginning. Apple's Steve Jobs said recently: "The computer industry is in its infancy", and added, "There's a tremendous amount of innovation that's going to be coming out in the next 10 years."
But it takes a foundation. The golden spike of the fully connected internet completed in the 1990s enabled a new business culture.
Ventures like Amazon, eBay and Google were able to get started on the back of a single end-to-end global information network. "I just whipped up some code," says eBay founder Pierre Omidyar, "and by Monday afternoon, Labor Day, I had the site up." Will the wireless spectrum on offer enable the same innovation benefits to service providers?
What's wrong with this picture?
Many foresee faster mobile device media surfing - and more - after 2009 when the new bandwidth is operational. "Imagine tracking everything from food spoilage and stolen auto parts to social nets that alert you when a friend is in the same town, mall, movie theatre or restaurant," suggested senior analyst Richard Doherty, director of Envisioneering, when I spoke to him by phone this week in New York.
But does the spectrum block represent a new information highway or an on-ramp to disconnected islands? While many rank and file industry observers forecast a great leap for creative alternate services, some raise a red flag.
Operations and new capabilities will occur only after the spectrum is uniform across the US says Doherty. "There is no guarantee of unified quality of service," he points out, comparing it to today's patchwork of disconnected wi-fi networks.
Doherty thinks that if the communications footprint is not complete, or is encroached by analogue broadcasters on the border in Buffalo, Detroit, Los Angeles or Miami, then a full national service may be unattainable in the short term.
Another hurdle is uniform modulation schemes for communication. GSM, the world's most widespread standard, succeeded in Europe because of early EU planning and industry revenue sharing that built critical mass. No one knows if the modulation scheme for the new spectrum will support or detract from existing ones, or even turn out to be a new one offered by Google or others.
What tomorrow may bring
So, are we on the threshold of a network build-out that outstrips anything we've seen from mobile and DSL providers to date? Or are bidders merely posturing for power and lining up to repeat the colossal 3G spending spree of a few years ago?
It will take time to see the results of the wireless auction as we wait for the next killer application or red herring. What we do know is that telecoms firms are voting with their feet as they move from legacy systems to new high-speed, multimedia mobile formats.
One concrete indicator this month was that AT&T has finally begun to pull the plug on its 65,000 pay telephones in the US - a business casualty of mobile phones becoming the communications device of preference for people on the go.
What a beautiful world it would be if next-generation mobile communications lower cost and increase quality, giving us applications that simplify things at work and on the road. But as Doherty emphasises, whoever buys the new spectrum will find success hinges on uninterrupted national service. "It's similar to land grants in the Wild West that did not disclose when pacts were not signed" and certain territories were dangerous or deadly.
Breakthroughs are imminent, just as industry players Google, MySpace and YouTube succeeded on the passion and risk-reward of previously unknown start-up teams and leaders.
"It's not about starting a business or trying to go out and 'do something'", says Napster founder Shawn Fanning about creating a recording industry revolution. "It just hits someone and takes you over." So, regardless of the ups and downs ahead, tomorrow's mobile applications may be just $10bn or $20bn away.