Future WiMAX Better Than 2002 EV-DO

A couple of weeks ago, I criticized an InStat report which I thought had a questionable premise, and a sensationalist title "End Users Prefer WiMAX". I faced some criticism in the comments for coming to conclusions without knowing the full research methodology (possibly from an InStat rep?) Anyhow, in a current article, InStat analyst Daryl Schoolar elaborated on the methodology of the research. Specifically, respondents were asked to indicate their preference of:

1) cellular broadband at 400-800Kbps with a 5GB/mo cap and a $60-$70 price tag and covering all major cities; or
2) WiMAX service at 2-4Mbps for $40-$50/mo with no usage cap and only covering your city and 1/3 of major US cities.

OK, in general I'm fine with that comparison, so long as it's positioned correctly. It's what's called a "scenario", and that scenario is a stacked deck, with a bias towards WiMAX based on some optimistic assumptions. It hardly provides conclusive evidence of whether people prefer one technology over the other. But I bashed this last time, so let's move on.

The linked article above is chiefly commentary from Jane Zweig of the Shosteck Group, who wonders if Mobile WiMAX will be the next Iridium. Remember that Iridium's plan was to capture a large share of the mobile phone market by offering service based from a global constellation of satellites. The problem was that in the 10 years it took Iridium to launch, GSM and CDMA had reached scale economies and spread from big city cores to suburbs and beyond, and only rural and developing regions were left for Iridium. Not a good addressable base to pay off billions in CapEx. Ms. Zweig suggests that similarly, mobile WiMAX may arrive too late to grab the dominant share of the market that proponents expect. I agree with her theory, and think there will be some reckoning for many WiMAX vendors. I said as much in my answer to InStat two weeks ago - cellular isn't standing still, and will respond to WiMAX. But on the other hand, it's unlikely mobile WiMAX will flame-out as badly as Iridium. It takes 10 years to get a satellite constellation operating in orbit, but mobile WiMAX is likely to emerge in nascent form by 2008. It will get a share of the market.

BTW, it's probably fair to note that, in general, InStat produces some of the best research and data about the mobile market, and no I'm not being coerced or paid to say so.

Sun Announces New Java-Based Mobile OS, Again Promises Write Once, Run Anywhere

A small company called SavaJe gathered some interest a few years ago when several big operators invested in it, supporting its development of a Java-based mobile operating system. It was widely believed that the operators were merely supporting SavaJe as a tool in their fight with handset vendors over handset customization. Once they won that fight, their interest in SavaJe waned, and the company went under last fall, and Sun bought its remaining assets. Today, Sun has announced JavaFX Mobile, a Linux- and Java-based operating system apparently based on the remnants of the SavaJe OS. Sun CEO Jonathan Schwartz says that JavaFX will fulfill the "write once, run anywhere" promise of Java -- a promise that has gone wholly unfulfilled in the mobile arena, as each manufacturer has implemented Java Micro Edition in their handsets in a different way, creating a morass of incompatibility and fragmentation. Given that, it's hard to accept his claim at face value. Sure, for devices using the JavaFX Mobile platform, there might be compatibility -- but that's akin to saying that "write once, run anywhere" holds true for Windows Mobile applications, since they'll run anywhere, as long as that anywhere means a device running Windows Mobile.

There are so many technologies looking to reduce fragmentation in the mobile market -- Flash Lite, Java ME, and so on -- that have done very little to do actually do so. The biggest problem they face is that they ignore the billions of handsets already in the market, the vast majority of which can't be easily updated to support new technologies. So when Adobe or Sun talks about reducing fragmentation by introducing some new technology, they're already facing an uphill battle, since they must convince content and application developers to support technologies that are inaccessible to most of the market. With the abysmal track record of Java ME in this space, and the big unfulfilled promises it's left behind, it's easy to be skeptical about what Sun is saying. JavaFX might find some success as a cheap and easy alternative to proprietary operating systems from some vendors (particularly for making white-label devices for mobile operators), but its overall impact on the market doesn't look like it will be too significant at this point.

TV Broadcasters Also Threaten Mobile Video

Mobile video has it's share of uncertainty. Do users even want it? Then there is an industry debate between unicast and broadcast. Then there is the Elephant in the corner that I think is the biggest threat to carriers, Modio, Hiwire, and Qualcomm: sideloading. But let's not neglect another powerful threat: existing TV Broadcasters also are intent on continuing to own the role of broadcaster, and extending that role to the mobile space. The National Association of Broadcasters formed the Open Mobile Video Coalition with the intent of broadcasting their local TV content in a digital format suitable for specially equipped mobile phones. While this strategy has already become reality in Japan, where phone users can tune into free broadcast digital TV, it is no slam dunk in the US, where phone subsidies run high. The customers will like 'free'. But any mobile video solution that cuts the carriers out of the loop is unlikely to appear in any handset that is subsidized by the carriers. Thus, phones that pick up free TV signals are likely to cost $200 more than similar counterparts - that's not free. If the cellular market were a totally competitive market, then some carrier would "defect" and offer the free TV phones simply in order to stab at the competition, and win a few customers. But in an oligopoly, it is unlikely that the carriers will defect, and free broadcast TV phones won't get much traction.

EarthLink Reconsidering Muni-WiFi Business?

As embattled muni Wi-Fi steps back and re-adjusts its role in the world, it seems more and more that the public access aspect of Metro-scale Wi-Fi is seen as a bad idea, while the government operations aspect is growing to be seen as the more suitable fit. Where does that leave you if you are a public access player in this market? Well, that's exactly the question EarthLink is struggling to answer right now. The ISP is going to put future Muni Wi-Fi plans on hold as it evaluates the economics, markets, and performance of its existing four contract cities. That's not to say that Earthlink will bail on Metro Wi-Fi, but it certainly supports our thesis that these networks were over-hyped and need to be re-evaluated. The CFO, Kevin Dotts, says Earthlink is "'not yet able to establish that comfort level' that the investments are really profitable". This willingness to reconsider is one of the advantages of a private/public partnership in that governments are more likely to bluster forward with good ideas and bad alike, since they are politically motivated, and can pass the bill to you later on. Private companies, however, are the canaries in the coal mine; they will bail when the models don't make sense. Earthlink, SureWest, and Google are all good examples of companies with little vested interest in the technology - they just want a good solution. Watch the canaries.

Earthlink may well revitalize their efforts in the space, with adjustments. But I'm not sure where a (largely) consumer ISP is going to find a clear role in a Metro Wi-Fi future with government operations as the anchor subscriber.

Filed Under: wifi, wi-fi

FCC Doesn't Really Decide Much About Upcoming 700 MHz Auction

The FCC was supposed to release rules for the upcoming 700 MHz spectrum auction yesterday, but after delaying its meeting for several hours (apparently as commissioners argued in private), it didn't announce much of anything at all. The only rule announced was that it will offer licenses in a variety of geographic sizes, from local to regional, a move which allows smaller local operators to bid on licenses covering small areas. But that was about it; the Commission simply invited public comment on a host of other issues, including Frontline's proposal for a shared commercial-public safety network, as well as open-access rules and other restrictions some consumer groups have asked for. Despite all the apparent discussion during the day by commissioners, nothing much changed,. The FCC is on something of a tight schedule, since the 700 MHz auction has to be completed by the end of January, and the thought that the auction might happen as early as June now appears to be gone.

Filed Under: spectrum