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FCC opens up wireless 'white spaces;' Assessing winners, losers and wild-cards

The Federal Communications Commission has opened up so-called wireless white spaces--unused spectrum between broadcast channels--in a move the agency hopes paves the way for 'Wi-Fi on Steroids'.In a statement following the FCC's 5-0 approval (Techmeme), Chairman Kevin Martin said:Opening the white spaces will allow for the creation of a Wi-Fi on steroids.
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Written by Larry Dignan on

The Federal Communications Commission has opened up so-called wireless white spaces--unused spectrum between broadcast channels--in a move the agency hopes paves the way for 'Wi-Fi on Steroids'.

In a statement following the FCC's 5-0 approval (Techmeme), Chairman Kevin Martin said:

Opening the white spaces will allow for the creation of a Wi-Fi on steroids. It has the potential to improve wireless broadband connectivity and inspire an ever-widening array of new Internet based products and services for consumers. Consumers across the country will have access to devices and services that they may have only dreamed about before. I fully expect that everything from enhanced home broadband networks, to intelligent peer-to-peer devices, and even small communications networks will come into being in TV “white spaces.”

Martin added that the FCC will ensure that this spectrum won't interfere with other broadcasts to allay critics, but it's a big win for technology firms such as Google, Intel and Motorola. Here's a look at the potential winners, losers and wild-cards:

Winners:

Intel: The chip giant is hands-down a big winner. Like Wi-Fi--and now WiMax--Intel will make chips with technology embedded to take advantage of this spectrum.

Google: Let me get this straight: Google prods the FCC to open up the airwaves. It enters bidding for 700 Mhz spectrum, jacks up the auction prices for carriers, doesn't actually bid and now gets handed spectrum that's arguably more valuable. Nice job, Google. Google's Larry Page said in a blog post:

I've always thought that there are a lot of really incredible things that engineers and entrepreneurs can do with this spectrum. We will soon have "Wi-Fi on steroids," since these spectrum signals have much longer range than today's Wi-Fi technology and broadband access can be spread using fewer base stations resulting in better coverage at lower cost. And it is wonderful that the FCC has adopted the same successful unlicensed model used for Wi-Fi, which has resulted in a projected 1 billion Wi-Fi chips being produced this year. Now that the FCC has set the rules, I'm sure that we'll see similar growth in products to take advantage of this spectrum.

All of that's true and guess what search and services will ride on top of this spectrum? Yup. Google's. Another thread is that Google will run to these white spaces to create a third broadband pipe to the home.

Motorola and Cisco: Martin spoke of "enhanced home broadband networks" that can flourish with this opened spectrum. The big players--from the set-top box to the wireless routers--are Motorola and Cisco.

Consumers: This new spectrum is likely to result in a bevy of services--and devices--to use. More importantly, opening this spectrum is going to bring us closer to always-on wireless broadband access.

Losers:

Verizon and AT&T: The likes of Verizon and AT&T have been paying billions for spectrum and now these white spaces create more competition. In other words, the moat around the wireless carrier business model isn't as strong as it was. The monolithic carriers will face competition from upstarts using white space spectrum as well as smaller rivals such as T-Mobile and Sprint.

WiMax, Sprint-Clearwire: The Sprint-Clearwire WiMax joint venture also was approved by the FCC on Tuesday, but there's a nagging issue: I thought WiMax was "Wi-Fi on steroids." There are multiple details to be worked out, but I wonder if WiMax will ultimately be just a bridge technology.

The FCC coffers: The FCC has garnered billions in wireless auctions and while advocates of white space spectrum have noted that it won't interfere with licensee rights you have to ponder about the impact on future auctions. Will carriers pay up for in the future?

Wild-Cards:

Business models and carrier response. In an interesting note, Stanford Group analysts Paul Gallant and Paul Glenchur wrote:

There is a fair amount of noise around the FCC vote on “white spaces,” but for now, there appears to be little to worry about for existing broadband providers (cable/telcos). The reason is that there is no clear business model for this spectrum to create additional competition in the broadband market. It’s even possible that existing broadband providers (Comcast, Verizon, AT&T, Time Warner Cable) could decide to follow Cablevision’s lead and co-opt these “white spaces” frequencies to provide a new mobile broadband option throughout their footprints.

The business model point is notable, but for the hardware vendors that will enable white space spectrum there will be new product cycles. Services providers will also rely on advertising. Stanford's second point is also interesting. Broadband providers--especially cable companies and wireless firms with weaker coverage (like T-Mobile)--can also benefit.

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