With more work to be done to increase broadband capacity and to connect underserved and rural areas, it’s easy to criticize the industry as standing still: as “idle as a painted ship upon a painted ocean.” But one must not overlook the many incremental moves that, when knitted together, contribute to the evolution of our communications system and our society.
While Verizon and AT&T were big winners overall in the FCC's recent Spectrum Auction, and particularly when one considers the “through the walls” utility of the particular spectrum these two carriers won (which should translate into lower wireless broadband build-out costs), it does not appear that AT&T intends to stand still. Recent rumors suggest that AT&T may be closer to using femtocells to boost wireless signals inside buildings, so that a user doesn’t have to press against the glass of their office window in order to get a signal, like some large indoor frog. We'd all appreciate it.
Sprint continues its realignment, with cable companies formally pulling the plug on the Pivot wireless proect, which was supposed to create the perfect quadruple play of voice, data, video and mobility, to match the market bundling strengths of AT&T and Verizon: not gonna happen. But Sprint also holds considerable assets in Wi-Max spectrum, along with Clearwire, and has attracted interest from a number of other well-heeled parties, and so they too will have their day.
Another change involves the “open networks” initiatives recently embraced by the big wireless carriers, which has the potential to unleash development and innovation on the network edge. New services, or new ways of accessing content, such as those created by independent applications or device developers, are as critical to the network's overall utility as are innovations within networks, and both present their attendant investment challenges, which point has come up several times in the FCC’s recent public hearings on Network Management Practices, both in Boston (webcast from 2.25.08 may be found at http://www.fcc.gov/) , and Stanford.
Barron’s has an interesting little item this week on some additional benefits that accrue to AT&T and Verizon by winning big in the 700 MHz Spectrum Auction, noting that one characteristic of this band is the ability to penetrate buildings, without having to install internal receivers, which means lower infrastructure costs for AT&T and Verizon, as opposed to higher costs borne by carriers considering other wireless broadband technologies, such as Wi-Max.
This advantage presumably also carries some important faster “time to market” attributes as well, and particularly since Verizon and AT&T have the financial wherewithal to hit the ground running.
Recent speculation about alternative deals for Yahoo! involve Time Warner's AOL, Rupert Murdoch’s News Corp (which owns everything that Google doesn't own), or Google itself, which also is considering a search ad tie-up with its erstwhile competitor. On the other side of the fence sits Microsoft, which kicked off the fracas by making an unsolicited offer for the rival content and search site some nine weeks ago.
Mobile broadband applications are booming, and where this market goes depends as much on the business plans of carriers, content owners, and social networkers as it does on whatever new gee whiz applications the developers can cook up. The stardard image discussed in regulatory circles pictures a 20-something kid who’s never seen a tie, knows technology inside and out, and is hard at work on some amazing breakthrough in a garage, well on their way to buying a jet. You'd think they were an endangered species.
Consider, though, that the sky’s the limit in terms of new devices or applications that have great potential to simplify our lives, increasing not only the manner but the methods by which we communicate, not only with one another, but also from machine to machine, increasing the abililty for interconnection and transfer of information among smart devices.
The latter notion captures some comments I’ve heard about Verizon’s development conference for its open networks initiative, held several weeks ago, where the tone apparently ranged beyond the scope of applications suited for your typical mobile phone, instead aiming more for the “smart house” concept that has been discussed forever and a day.
This sounds like efficiency in the making, particularly if you throw in some of the other concerns being bandied about, such as driving down medical costs (HealthIT), increasing overall productivity and eliminating waste (heard of any new "green" initiatives lately?), and harnessing the inherent economies of scale of doing business in ways that only a highly developed country can.
We're just not Japan, not yet.
In our wonderfully dynamic relationship with technology, we make decisions that have great impact on developments in the future. In other words, we strive to make the best decisions about the market, but, without the benefit of hindsight (or time travel), we often fall far short of our goals, and are thus resigned to endless argument over the inevitably flawed result, the wisdom employed, or less-than-optimal new beginning.
So it goes with network evolution from the originating platform of choice (e.g., cable, telco, wireless), into broadband super-pipe, over which any application or service travels on data, and the ongoing struggle to divine the appropriate regulatory model, possessed of just the right checks and balances to encourage continuing investment in networks and applications for a rich customer experience, increased access to the workforce by all consumers, and to promote economic growth and development overall.
Thus flowed many ideas at Freedom-to-Connect, an extremely thought provoking conference held this past week, for two days, at the American Film Institute's Silver Theater in downtown Silver Spring, Maryland. In this regard, it may not be entirely accurate to assign a beginning or end to the event, given that the conference is still going on, in blogs and posts and continuing discussion, over topics such as “open wireless networks,” “carbon neutral Internet,” and the organizational abilities that may be coordinated by mass-communications over the Internet (as described by Clay Shirky, discussing his new book “Here Comes Everybody”).
Also this week, in Las Vegas, the nation’s largest cellular association, CTIA, held its annual trade show, which featured, among other developments, FCC Chairman Kevin Martin recommending that a petition for declaratory ruling filed by Skype last February, 2007, be dismissed. Pointing out recent announcements by Verizon and AT&T about opening up their networks, Chairman Martin said that it was not necessary for the FCC to grant the Skype petition, since its goal had already been largely accomplished.
The timeline by which these events transpired, from petition to the FCC adopting rules, to the announcement of new business models by the major carriers, and subsequent gigantic auction ($19 billion), spanned all of 13 months, which is profound for those accustomed to the snail’s pace normally ascribed to regulatory evolution. In short, all this happened very quickly, in tandem perhaps, with a complemenatry trend: the “time to market” for the introduction of new technologies, which also is now greatly compressed.
In fact, I seem to recall Verizon officials making this very point during the conference call in late November 2007 describing their decision to adopt the open network model in parallel with their current subsidy/subscription model: the rapidly increasing pace of technological innovation almost dictated that they make such a decision.
