paul callahan…mostly common sense

Having lots of money changes your behavior. It doesn’t matter whether you are an individual or a large company. Look at Microsoft. It has hobbies — endeavors outside of its core businesses which it finds amusing, but don’t really matter — like MSN and MSNBC. Now Google is interested in wireless and has made cryptic comments recently regarding participation in the upcoming FCC auction for 700 MHz wireless spectrum. Is this just a hobby, and is Google behaving like every other overfed rich guy on the planet? Or is the company really willing to step up and change the way mobile networks are constructed, operated, and paid for?

Personally, I think Google should pony up with the money and build a network. It will be the first time it has ever had to deal with ugly nuts and bolts of supporting a real network and cope with the holy terror of customer satisfaction. Maybe Google can change the business, but it needs to do something other than sniping from the sidelines to find out.

Full disclosure: No position in Microsoft or Google at time of writing.

Directory Tags: | Wireless | Microsoft | Google | 3G | 700 MHz |SEC |Mobile |

Financial Times recently reported that Apple has signed several deals in Europe: T-Mobile Germany, Orange France, and O2 UK.  Apparently, the mobile operators have agreed to fork over as much as 10% of the revenues resulting from the use of the iPhones on their networks.  Round one definitely goes to Apple in this boxing match.  This is a brilliant move.  Nothing is harder for mobile operators to do, than giving up a piece of their revenue per user.  Not sure this is true?   Take a read through any mobile operators quarterly earnings slides and see how they crow about increasing average revenue per user (ARPU).

How could this be different from the AT&T rollout in the US?  Though Apple shareholders (which I am not) should be ecstatic.  But Apple users in Europe will need to be satisfied with cooing over the beautiful user interface with the lack of HSDPA for Internet downloading.  Jeesh, get your act together on network side, Apple.  The company certainly can’t use the excuse that Euro operators do not have the HSDPA infrastructure in place.  Heck, operator 3 in the UK, just lowered its HSDPA pricing to $20 per month for 2.8 Mbps.  I do not think we are going to see a price like that from AT&T any time soon.

Full disclosure: No position in AT&T, Apple, 3, Orange, or 02 at time of writing.

Directory Tags: | Wireless | Orange | O2 |TMobile | Apple | UMTS | HSDPA | 3G | Mobile |

Though the market appears to be pumped about femto cells, a number of issues remain unresolved.  Whether those issues turn into storm clouds — and eventually rain on the femto cell parade — is simply a matter of innovation.

If femto cell suppliers can invent solutions that overcome these issues, the femto cell market will launch like a roman candle.  If not, the result will be smoke and sputtering noises for years to come.

Here’s the list in no particular order:

1. Automatic access control and mobility — Femto cells need to prevent drive-by users from camping on inadvertently, but also hand-in and hand-out authorized live calls to and from macro cells.
2. Simple activation — Femto cells need to be as close to zero-touch as possible on activation: probably a single phone call with serial number and a dead-simple web interface to add users.  If femto cells are as bad as Wi-Fi configurations, they will flop.
3. Excellent security — Because femto cells will connect via any Internet service, wireless operators need femto cells to authenticate themselves and then encrypt all traffic using a security tunneling protocol such as IPsec.  Anything less than excellent security will be unacceptable — even for the most liberal wireless operator.
4. High-end scalability — Operators will need to connect millions of femto cells.  But unlike cell phones, femto cells will present millions of IPsec tunnels acting like corporate VPN links that never go down.  This will require great honking security gateways to terminate tunnels and handoff calls.
5. Interference mitigation — As I have previously written, femto cells will need enough intelligence to listen, learn, and then automatically mitigate RF interferenece from macro cells and other femto cells on the block.
6. Core network interface — Because femto cells will use existing mobile phones, they will need to connect to the existing mobile operator core network — often a massively clunky mess.  This has already spurred an architectural battle among femto cell competitors.  Presently it is the wild, wild west, but the least disruptive solution will likely win.

Full disclosure: Employed by AIRV at time of writing.

Directory Tags: | Wireless | WiFi | Wi-Fi | DSL | Cable | UMTS | CDMA | WiMAX | Muni Wi-Fi | Mobile | Femtocell |

The FCC’s recently issued an order on the use of 700 MHz spectrum.  The airwaves have been occupied by television broadcasters, and will be made available for other wireless services, including public safety and commercial services (download the FCC press release).  The spectrum will be vacated by TV broadcasters on February 17, 2009 and auctioned no later than January 28, 2008.  Based on the press release, the FCC order creates:

1. “Open Platform” wireless spectrum.  Whoever wins the auction for this huge chunk of spectrum (22 MHz) must agree to “provide a platform that is more open to devices and applications.”  The goal is to “allow consumers to use the handset of their choice and download and use the applications of their choice.”
2. Nationwide public safetey wireless spectrum.  The winner of the bid for 10–20 MHz of “Nationwide Commercial” wireless spectrum, will join in a Public Saftey/Private Partnership and will also win the right to “build out a nationwide, interoperable broadband network for the use of public safety.”  The winner also gets to use some of the Public Safety network (see the transparent overlap in the figure) as long as their use of the Public Safety network is pre-emptible when there is an emergency.

What is the impact?

1. Google must build a network if it wants to play.  Despite a severe attack of arrogance, Google did us all a favor by influencing the FCC to set aside spectrum for an open platform wireless network.  But the bad news for Google is the fact that it will not be able to buy the spectrum and make money by wholesaling access to the airwaves to others.  Google must bid on the spectrum like everyone else, and then it must build a network and operate it.  Maybe for the first time ever, Google will be faced with getting its hands dirty.  Build a real network, operate it, and deal with all those nasty users complaining that it doesn’t work the way they want it too.  Accountability.  Jeesh, what a bad dream.  Of course, Google can hire someone to build and to run it, but ultimately it will be theirs.
2. The big plum is in the Public Safety spectrum.  The winner of the auction for the National Commercial spectrum, not only gets to build out the Public Safety network and use some of the spectrum when possible, it gets to compete with the Open Platform winner in the 700 MHz band.  What’s so great about 700 MHz?  One of the biggest problems for mobile networks today is coverage, indoor and out.  Because 700 MHz is lower frequency than most of today’s cellular networks, it will have fantastic propagation characteristics.  It will go further in the open air than today’s cellular, and it will penetrate build walls better.  Expect the bidding to be fierce for this chunk of spectrum.

Full disclosure: Employed by AIRV, no position in GOOG at time of writing.

Directory Tags: | Wireless | WiFi | Wi-Fi | DSL | Cable | UMTS | CDMA | WiMAX | Google |Muni Wi-Fi |