WiMax, Net Neutrality And Basic Fact Checking

from the need-to-support-your-argument-a-little-better dept

Wed, Aug 9th 2006 12:02pm — Mike Masnick

With yesterday's announcement that Sprint was going to offer WiMax over their 2.5 GHz spectrum, it was only a matter of time until someone tied the topic to net neutrality. The Wall Street Journal clocks in as the first one -- though gets its basic facts wrong, destroying the core of its argument. The editorial starts off by claiming that this shows the idea that there's not enough competition is bogus. As we've noted repeatedly, it is that competition question that's the real issue. That's why we've always hoped that wireless technologies would come along and make the issue obsolete. The problem, though, is we've yet to be convinced that any wireless technology is really ready to be true broadband competition. Mesh WiFi so far has had a lot of problems scaling. Cellular 3G networks are cutting off any user who uses the system for real broadband uses and satellite broadband remains a joke in comparison to other broadband systems. WiMax (and other wireless broadband systems) have always held promise, but have always been too far away from any serious deployment. The Sprint announcement will hopefully speed this process up, but we've yet to see a single wireless technology that wasn't over-promised and under-delivered. In fact, equipment based on the WiMax standard that Sprint will be using still hasn't started to go through the certification process -- which takes quite a bit of time. In other words, expect this to be delivered late and with quite a few kinks to be worked out (and performance that doesn't come close to living up to the hype). So, yes, perhaps it will eventually add another competitor to the bunch, but it's far from certain that it's a real competitor who can make a difference. We hope it turns out to work wonderfully and keep the competition in line -- but it's a bit early to declare that so.

At the same time, the WSJ article has some serious other problems -- which weaken its argument. First, it declares: "WiMax, meanwhile, operates in unlicensed spectrum, meaning Sprint doesn't have to shell out money in auctions to deploy the technology." This is basic fact checking that anyone who even looked at Sprint's announcement yesterday knows is 100% false. You'd expect much better from a paper like the WSJ. While WiMax can work in some types of unlicensed spectrum, it's fundamentally meant for licensed bands and Sprint paid handsomely for their spectrum. Hell, it was perhaps the biggest reason for Sprint to merge with Nextel: to get all that 2.5 GHz spectrum. In other words, contrary to the central point of the WSJ editorial, it really isn't that easy for just anyone to throw up a competing service. In the case of Sprint, it cost them billions to get the necessary spectrum, which will only cover a third of the population, and it's still going to cost them another $4 billion to build out the network -- making it quite unlikely that anyone else is going to challenge them on a national level. So, yes, hopefully Sprint's WiMax offering will represent another player in the space, but it's still a long way off from being around or proven, and it's hardly proof that just anyone can show up and compete in this market.

Finally, there's one other big problem with the WSJ piece. The telcos and their supporters all along have insisted that they simply won't invest in any new technology without a guarantee that they can profit from it. However, Sprint is investing billions to build up this network without any such guarantee -- suggesting that whole part of the telcos' argument only seems to apply in markets where (oh, look at that) there isn't any competition and they need extra incentives to innovate. So, let's see what happens. If this Sprint network really represents competition, it seems likely that the telcos suddenly would speed up their new rollouts in areas where WiMax is coming, without necessarily getting those same guarantees. Either that, or maybe they'll just try to buy Sprint, to keep it all in the family.

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Sanguine Dream, 9 Aug 2006 @ 12:44pm

Or...

So, let's see what happens. If this Sprint network really represents competition, it seems likely that the telcos suddenly would speed up their new rollouts in areas where WiMax is coming, without necessarily getting those same guarantees. Either that, or maybe they'll just try to buy Sprint, to keep it all in the family.

...or they will sue Sprint claiming that their WiMax spectrum is infringing on some copyright or something like that...
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Kelly, 9 Aug 2006 @ 12:58pm

Ignorance propogates
The biggest reason that wireless has not been taken as a serious alternative is that the telco's and cable companies stymie their ability to grow because of lobbying and misinformation.

Unfortunately, ignorance propogates much faster than PC viruses and is nearly impossible to completely irradicate.
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Anonymous Coward, 9 Aug 2006 @ 1:01pm

Course, wireless carriers don't have to share their networks, so they don't have to worry about "freeloaders"
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Mike (profile), 9 Aug 2006 @ 1:12pm

Re:
Course, wireless carriers don't have to share their networks, so they don't have to worry about "freeloaders"

Well, that's misleading. The telcos don't have to worry about "freeloaders" either. In the situations where they were expected to share their networks, they were paid for it -- so it's hardly a situation where they had to deal with "freeloaders."

In fact, when the telcos talk about freeloaders, they usually talk about companies like Google and Vonage -- who absolutely will be available on these wireless networks as well...

So, sorry, what was your point again?
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Anonymous Coward, 9 Aug 2006 @ 1:22pm

Well, I was being somewhat sarcastic in my freeloaders comment, but most wireless carriers are still undecided about allowing VoIP over their data networks. I am not sure if Verizon would let me run VoIP over EVDO, but maybe. I don't pay for SMS (since I use a 3rd party program)

Also, WiMAX could run over free spectrum, but that would limit the distance for connections and would also cause some QoS issues.

By the end of the year, you will see results that show that Earthlink is the leader in terms of competition with the cable/wireline folks. They will have more people connected with WiFi than anyone else. WiMax might be coming, but WiFi is real today.
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JustOutlawIt, 9 Aug 2006 @ 1:27pm

Who Cares
Just impose restrictions on service providers limiting their ability to filter what places on the internet may and may not be reached and at what speeds. Basically they can't slow down or filter any traffic... I don't want to pay a toll to enter certain places on the internet just because a particular service provider has a monopoly in the area. They shouldn't be able to do and charge whatever they want gouging the consumer. This is basic antitrust law if you ask me. If you have a monopoly in the U.S. your rights start to become restricted in order to create competition and protect the consumer. I say keep the net the way it is. Kill money mongers trying to squeeze every penny they can out of consumer because they know the consumer has no other choice.
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Mike (profile), 9 Aug 2006 @ 1:29pm

Re:
Well, I was being somewhat sarcastic in my freeloaders comment, but most wireless carriers are still undecided about allowing VoIP over their data networks. I am not sure if Verizon would let me run VoIP over EVDO, but maybe.

Indeed. But that's the point, isn't it? It's not real broadband competition if they're so limited.

By the end of the year, you will see results that show that Earthlink is the leader in terms of competition with the cable/wireline folks. They will have more people connected with WiFi than anyone else. WiMax might be coming, but WiFi is real today.

I'd like to see that data, but I'm not convinced it's real. Most of the muni-WiFi data we've seen so far shows pretty vast problems, and very, very few users looking at it as a replacement to DSL/cable to the home.
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chris (profile), 9 Aug 2006 @ 1:32pm

it's not competition until...
it's not competition until i can get a wimax box that plugs into my TV and phone.

it's not competition until i can get an EVDO box that plugs into my TV and phone.

it's not competition until my DSL modem can plug into my TV without using a satellite receiver.

it's not competition until my cable box can plug into my phone, ala time warner.

it's not competition until my satellite reciever can plug into my computer and my phone.

it's not competition until i can get TV and phone service over my powerlines the way i can get internet access.
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Scott, 9 Aug 2006 @ 1:33pm

wow competition huh?
Another ttelecoms Giant moves in and this proves there is competition.

When Joe Sixpack ISP gets off the ground and runnnig a WiMAX ISP and proves there is little barrier to entry I may begin to hold out hope.
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Anonymous Coward, 9 Aug 2006 @ 1:33pm

I agree Mike, muni-WiFi does have its problems, but it will still have more numbers than WiMax, which won't be deployed for a while.

The biggest problem with muni-WiFi is how do you make money from it? Ad supported? Subscriptions? Cities sure don't want to use taxpayer dollars for it, but money has to come from somewhere.
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Kyros, 9 Aug 2006 @ 1:55pm

I think it could be done free or at least cheaply, with ease. The problem is that they want to make unfair amounts of money, they aren't happy making just a decent amount of money. So, it could be done, but it won't be done untill some small company thats not overly concerned with ripping of customers does it, and forces the other companies to follow suite.
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Anonymous Coward, 9 Aug 2006 @ 3:36pm

And by guarenteed profit, you of course mean the right to profit from their own network, right?

Do the carriers care about Google right now? No, because Google doesn't currently compete with carriers. 5he future is video and that's where the telco's expect to get their profit from. Sould we let others deliver video services over others networks without paying for it? Should we force cable companies to accept other content like video on demand or pay per view?

If cable and the fiber guys do it right they will win, because they can bundle. Voice/video/data at $100 is hard to beat. Also, they will know their customers better than anyone else. Course, that requires them doing it right.
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Anonymous Coward, 9 Aug 2006 @ 3:43pm

And by guarenteed profit, you of course mean the right to profit from their own network, right?

Do the carriers care about Google right now? No, because Google doesn't currently compete with carriers. 5he future is video and that's where the telco's expect to get their profit from. Sould we let others deliver video services over others networks without paying for it? Should we force cable companies to accept other content like video on demand or pay per view?

If cable and the fiber guys do it right they will win, because they can bundle. Voice/video/data at $100 is hard to beat. Also, they will know their customers better than anyone else. Course, that requires them doing it right.
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Tiernan Ray, 9 Aug 2006 @ 6:07pm

WSJ Ignores and Inconvenient WiMax Truth
Good post about the WSJ editorial on WiMax today, and its slippery grasp of the history of Sprint's 2.5 GHz licenses. I've expanded upon the story, with a link to your post, in the Barron's Online TechTrader Daily Blog...

http://blogs.barrons.com/techtraderdaily/2006/08/09/the-inconvenient-truth-about-wimax-ws j-ignored/
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Scott Cleland, 10 Aug 2006 @ 7:22am

Anti-competition
You obviously have little belief or confidence in competition or the incentives and disincentives of market forces to spur innovation and investment to produce more choice for consumers.

Your desire to support NN puts you in the tortured position of having to be a tech and innovation pessimist. Just becuase technologies over promise and under deliver over a certain time frame does not mean that the technologies never succeed or get fully deployed.

If you believed in the potential of competition you would argue that Snowe Dorgan should have sunset provision for when competition reachd your threshold, rather than taking the ultimate pessimist view that competition can never succeed so NN must be permanent.
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ebrke, 10 Aug 2006 @ 8:16am

Guarantees
Gee, when I grew up expansion was called the cost of doing business. Let's see, I want to expand my business, but I'm only going to do it if I'm promised a market and a set of guaranteed customers.

I thought these guys were all about capitalism and the free and unrestricted market, but I guess that's only when it benefits them. Talk about a sense of entitlement.
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d.l., 10 Aug 2006 @ 9:04am

competition
The fact that services like Verizon's EVDO place limits on the uses that subscribers can make of them does not necessarily mean that they don't provide competition to wireline broadband services. Economists have long recognized that the degree of substitutability need not be perfect for two goods to be in competition. This is likely to particularly true for products like wireline broadband that are characterized by significant fixed costs and scale economies.
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Mike (profile), 10 Aug 2006 @ 9:50am

Re: Anti-competition
Scott,

I'm confused. Your comment makes no sense.

You obviously have little belief or confidence in competition or the incentives and disincentives of market forces to spur innovation and investment to produce more choice for consumers.

This is wrong. If you read anything we write here, I'm a huge supporter of allowing market forces to do their thing.

Your desire to support NN puts you in the tortured position of having to be a tech and innovation pessimist. Just becuase technologies over promise and under deliver over a certain time frame does not mean that the technologies never succeed or get fully deployed

Now this is the bizarre statement. Because, as I've said repeatedly, I DO NOT support net neutrality legislation. Why would you say that I do?

I also never said that WiMax would never work. What I said was that it simply does not represent true competition in the space yet -- and probably won't for a while.

So, please, Scott, tell me why being honest means I must support net neutrality legislation when I don't? Is it so hard for you to realize that I can be against net neutrality regulation and still call out the lies from those who also don't want net neutrality legislation?

If you believed in the potential of competition you would argue that Snowe Dorgan should have sunset provision for when competition reachd your threshold, rather than taking the ultimate pessimist view that competition can never succeed so NN must be permanent

Come back when you've taken the time to actually read what I said.
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Mike (profile), 10 Aug 2006 @ 10:06am

Re: Anti-competition
Oh, I see... Scott, on his own blog, called this factually faulty WSJ editorial "dead on". I think you meant "dead wrong."

Scott, if you want people to take your position seriously, and not simply think of you as a paid for shill -- you have to be willing to point out where even those who agree with you get the basic facts wrong. The WSJ editorial has its facts wrong -- and you look like ever more the paid shill when you insist they got it right when the very core of their argument is flat out false.

But, at least I know it's not worth taking anything you say seriously. Thanks for making that clear.
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Richard Bennett (profile), 10 Aug 2006 @ 4:20pm

Narrowly correct or incorrect, depending
Mike, once again you get yourself so torqued-up by a slight misstatement of fact that you miss the larger point. The WSJ says: "WiMax, meanwhile, operates in unlicensed spectrum..." which is literally true, just not the whole story. WiMax was intended for licensed spectrum where transmit power levels can be higher, but it will happily run in unlicensed spectrum too, just not as well.

The larger point of the WSJ piece is that increased competition for the last-mile market makes NN regulations obsolete, if not now then certainly within the next few years.

The principal source of increased competition for the last mile will be wireless, and it will be good enough to keep the Telcos honest. That's the point, don't get too hung up on the details.
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Mike (profile), 10 Aug 2006 @ 5:16pm

Re: Narrowly correct or incorrect, depending
Richard,

It's funny how you are always ready to support false statements if they support your position, and brush them aside as "narrowly incorrect."

Yes, it would be great if wireless really did represent competition for the last mile. My point is we don't know if that's true yet and there are a LOT of questions about whether or not it can be real competition. The technology is not here yet, and there's a very good chance it will have tremendous limitations -- thereby making it not an effective competitor.

I do hope it is a real competitor, but to say it absolutely is one today is factually false. I hope it does come true, but jumping the gun is bad.

It's actually very amusing to me that telco supporters like yourself always say that no one should talk about the telcos blocking sites or services because that's a reality that hasn't happened yet. The same is true of WiMax for competition... yet, you're okay with it when it supports your position?

Give me a break...
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Richard Bennett (profile), 10 Aug 2006 @ 5:49pm

Re: Re: Narrowly correct or incorrect, depending
You and I have exactly the same position on Net Neutrality, Mike, so if I'm a "telco supporter" then you must be one too. Welcome to the fold, give me your address so I can make sure you get your checks.

The point is that the viability of WiMax as an alternative to wire for the last mile isn't a function of whether it's running on licensed or unlicensed spectrum, so the error you picked up in the WSJ article is of no consequence. Like a lot of geeks, you get all excited every time a civilian gets one of our facts wrong, whether it's an important fact or not.

Actually, if the WSJ had reported on WiMax's regulatory status correctly, they would have had a stronger case. The last mile is increasingly competitive, and lots of people are working really hard to make that continue to happen.

Right now, the last mile is owned by DSL and cable. If the Barton or Stevens bill passes, there is a third wireline option, and if those three options are not managed correctly, there will be increased pressure from EVDO, WiMax, BPL, and Muni WiFi. And if that's not enough, we'll have 802.21 handoffs among all the players.

You may or may not like the way any of these networks is managed, but to say there is no competition for the last mile is to ignore reality.
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Mike (profile), 10 Aug 2006 @ 6:07pm

Re: Re: Re: Narrowly correct or incorrect, dependi
You and I have exactly the same position on Net Neutrality, Mike, so if I'm a "telco supporter" then you must be one too. Welcome to the fold, give me your address so I can make sure you get your checks.

No, we don't have the exact same position. We agree that the current legislation is bad, but that's about as far as we agree.

The point is that the viability of WiMax as an alternative to wire for the last mile isn't a function of whether it's running on licensed or unlicensed spectrum, so the error you picked up in the WSJ article is of no consequence.

Well, that's not quite true. First off, part of the WSJ's argument was that *because* it was in unlicensed spectrum, it would be somehow easier for more competitors to jump into the space. That's false.

WiMax in unlicensed spectrum is possible (or, rather, will be at some point), but whether it can be a legitimate competitor is a wide open question for a variety of reasons that you most certainly know.

Actually, if the WSJ had reported on WiMax's regulatory status correctly, they would have had a stronger case. The last mile is increasingly competitive, and lots of people are working really hard to make that continue to happen.

Again, this is false. Please, please tell me how the last mile is getting more competitive? It may get there eventually, but it's not now. I have one choice for broadband -- and I live in the heart of Silicon Valley. My choices have SHRUNK over the last five years.

there will be increased pressure from EVDO, WiMax, BPL, and Muni WiFi. And if that's not enough, we'll have 802.21 handoffs among all the players.

Oh come on. You know that EVDO, BPL and MuniWiFi simply can't handle the usage necessary to actually compete with DSL or cable. EVDO providers cut people off if they actually use the network. BPL is a big joke other than a few small scale tests. MuniWiFi has yet to prove that it can work on any widespread scale.

Yes, it would be great if these technologies represented real competition for the last mile, but they're not there yet. I'm hopeful we'll get there, but to assume that they're here now or will be in the near future is wishful thinking.

It amuses me that you think DSL without tiers can't handle bittorrent traffic, but you're throwing up EVDO and muniWiFi as perfectly fine technologies.
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Richard Bennett (profile), 10 Aug 2006 @ 8:30pm

Re: Re: Re: Re: Narrowly correct or incorrect, dep
So tell me where you differ from my position on NN.

* I say the Congress doesn't know enough about the operation of packet networks to regulate Internet routing today, and as proof I point to the provisions of Snowe-Dorgan and Markey that ban QoS.

* I say that every privately-funded infrastructure project in the US (electric power, natural gas, phone, and cable) has been funded through the sale of services. Consequently, it's permissible for the fiber optic network to be funded, at least in part, by the Telco having an exclusive right to sell at least some of the services flowing over it, at least for some period of time.

* I say that the only alternative to the services-pay-for-the-infrastructure model is for government to lay the cable, and I don't want that.

Where do you differ?

And the question of competition doesn't imply that we have five fully-developed alternatives to fiber optics today, merely that we have options in the pipeline that can be deployed in fairly short order if there's a need for them.

Your options in Silicon Valley haven't decreased, they've increased. Be honest.
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Mike, 10 Aug 2006 @ 8:53pm

Re: Ignorance propogates
No real substantive contribution, but I am saddened ignorance cannot be "irradicated" (perhaps some form or irradiation?). Thankfully, we still have the potential to eradicate ignorance... whew! Just makes me shudder when I read the response, which was pretty decent until...
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Dave, 12 Aug 2006 @ 7:08pm

My Conversation with Larry Boucher about Net Neutr
Larry Boucher was kind enough to share his thoughts about net neutrality with me in an email conversation; and to allow me to then post that conversation on the web. The whole conversation is posted at my blog: http://blog.davestechshop.net/
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hqslizpw@mail.com, 10 Oct 2006 @ 6:02am

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Wood, 7 Jun 2007 @ 7:43pm

Re: Or...
REV DO doing great w/ EVDO Rev A.

getting 1100 D/L +600 U/L for less than Pro pak

and less headache with weather;don't have to watch gateway's weather plus outside my door too.
Finally companies with DSL sacred this entry may make them a thing of the past......
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Anonymous Coward, 16 May 2008 @ 7:05am

Re: Re: Or...
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Anonymous Coward, 16 May 2008 @ 7:05am

Re: Re: Or...
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