Steve Stroh's Line Of Sight
Perspectives On The Broadband Wireless Internet Access Industry
Friday, March 23, 2007
Listening To The Technology
This article is original content, written exclusively for
Broadband Wireless Internet Access / WiMAX News
http://www.bwianews.com.
Earlier this week I had a discussion with a Wireless Internet Service Provider (WISP). Part of the conversation was about Metropolitan Wi-Fi Networks and went something like this (I am paraphrasing, heavily, purely from memory):
WISP: "So what do you see happening in the WISP industry?"
Stroh: "Technology is changing the WISP / BWIA industry rapidly. Right now, in my opinion, the technology isn't quite good enough for Metropolitan Wi-Fi Networks to deliver consistent, reliable services to users in residences and business that are trying to use ordinary Wi-Fi devices to connect. But that's about to change. For example, Wavion Networks is about to deliver an outdoor Wi-Fi Access Point that uses phased-array technology to focus its transmit energy and receive sensitivity on individual users. Couple that with cheap, high-power, directional Wi-Fi client devices like those made by Tranzeo Wireless Technologies, and what you can end up with is an highly cost-effective network that does provide consistent, reliable services with easy-to-install customer premises equipment, very similar to the way Clearwire operates."
WISP: "Well, we're not worried about that; we don't consider people that use [Metropolitan Wi-Fi] to be our [target] customers."
Stroh: "Here's the thing... the ones being enabled the most by this new technology are the users. Moore's Law is in full force for digital broadband radios too, so it's all getting better / cheaper / faster every year. So, if you do choose not to try to market your services to a particular customer segment, the technology is making it possible for them to simply do it themselves. Look at what Meraki is doing, for example. Very inexpensive devices that do peer-to-peer mesh networking, making it possible for an individual, let alone small groups, organizations, or neighborhoods to build Broadband Internet Access networks purely out of their pocket!"
WISP: "But it's tough to make money from that customer base."
Stroh: "True... but what's going to happen is that the technology is going to continue to improve. Right now those Meraki units are pretty short range, 2.4 GHz Wi-Fi only. What will happen as the Wi-FI chipsets continually get cheaper and better is that the Meraki units will continue to get better, for the same price. Meraki already makes it possible to become a "Micro ISP". These networks get bigger, more capable, more reliable, more sophisticated. Couple what you can do with Meraki with Wavion's technology and/or a Metropolitan Wi-Fi network and gradually your WISP starts to lose business to these "amateur" networks."
"There is a very, very good book that I recommend highly called "The Innovator's Dilemma" that explains very well the "come from below, get better, become dominant" cycle that describe above and I'm observing now in the Broadband Wireless Internet Access industry."
"You can certainly choose to not serve certain customer segments. But by doing so, I believe that you're merely creating your own competition, because the demand for cost-effective / reasonably-priced Broadband Internet Access is pretty universal now. You can either try to get them as your customers, somehow, like offering them a good deal on the backhaul that they'll ultimately need to buy from some entity (like, perhaps, a local college), or they'll eventually figure out how to do it themselves using devices like Meraki. Over time, business customers that are your customers now are going to "defect" to these user-built networks... because in many cases those customer-built networks will end up being better, cheaper, and faster... and reliable enough."
WISP: "You've given me a lot to think about."
(end of Stroh / WISP discussion)
George Gilder, quoting Carver Mead, once offered this profound advice: "Listen to the technology; find out what it's telling you" (emphasis mine).
I think that what the technology underlying Broadband Wireless Internet Access is "telling" every Broadband Internet Access Service Provider that they are ultimately faced with The Paradox Of The Best Network. They can either embrace it and adapt, becoming ruthlessly cost-effective and efficient at providing commodity Broadband Internet Access service and build their business for the long term on that model, or they can remain in denial that rapid technological evolution is indeed fueling The Paradox Of The Best Network... that will ultimately kill their business-as-usual.
Imagine... a future Meraki radio that:
- Used directional antennas;
- Could combine multiple radios by "meshing" across their Ethernet connections;
- Used the 5 GHz band for backhaul, all 550 MHz of it (now that the 5.4 GHz band can, at long last, finally be used in the USA);
- Implements the low-power techniques and technologies of Green WiFi
- Could be powered by a small, inexpensive solar panel and battery for nighttime operations, which then allows Meraki "relay-only" nodes to be positioned wherever they are needed instead of worrying about whether power is available;
Rober Berger all but predicted this "disruptive", rapid evolution of Wi-Fi in late 2004, saying (excerpted):
IMHO, 802.11 is recapitulating the evolution of Ethernet into the Wireless realms.
Ethernet was originally considered a “toy” technology by many of the industry leaders of the time. The manly technologies at that time were first Token Ring, then 802.12 AnyLAN VG, then ATM.
Wi-Fi is currently considered useful only for the home and some enterprise applications and a “toy” for outdoor Municipal Networks.
But Ethernet out evolved and kept delivering just enough functionality, at much lower cost than the too sophisticated QoS laden and expensive “heavyweights”.
Wi-Fi/802.11 has taken on the mantle of Ethernet’s Manifest Destiny (it uses almost exactly the same packet frame as Ethernet) and brings it into the wireless realms. There are many more companies, universities and hackers pushing the boundaries of what 802.11 can do and the volume is growing at an accelerating pace.
Today 802.11 is at a similar phase of evolution as early Ethernet was when there were only a shared contention medium via hubs and bridges. Ethernet really took off when switches became available and allowed the contention realm to be broken up to support parallel data flows. And that is what we can expect in the next stage of 802.11 evolution. This is what is needed to make mesh wireless networks viable with 802.11. There are already several companies developing mesh (though only a few are doing it in a way that will scale). There is also an 802.11s working group developing a standard for wireless mesh. And mesh is what will allow 802.11 to eventually cover municipal areas.
...
In conclusion, Wi-Fi will out evolve and deliver connectivity at costs dramatically lower than WiMax. WiMax / 802.16 is just starting on its path to evolution, has a much smaller base of innovators and chipset growth volume. Wi-Fi is already far along on its core learning curve, has an easy order of magnitude larger base of innovators / investors and chipset growth volume. WiMax hype will sputter out to reality of a niche backhaul and rural marketplace, Wi-Fi/802.11 will evolve and grow into many more realms and dominate the Local Area Network (LAN) / Neighborhood Area Network (NAN) / Metro Area Network (MAN).
Another piece of relevant history is that in 1995, Timothy Jason (Tim) Shepard wrote what I consider to be a seminal Doctoral Thesis titled Decentralized Channel Management in Scalable Multihop Spread-Spectrum Packet Radio Networks (PDF). In 81 pages, Shepard explains how wireless mesh networks really can scale. I got to know Shepard a bit as Amateur Radio Operator KD1KY, and in discussing his paper, Shepard was asked how much spectrum did he estimate that his proposed scalable-to-urban-density network would require? My memory of that discussion is that Shepard replied "In total, about 1 GHz". Just with the license-exempt 5 GHz band, we're more than half way there - 550 MHz. If 60 GHz radios could be made cheaply, we'd be there seven times over - the 60 GHz band extends from 57-64 GHz.
The Wireless Telephony (Cellular) Industry, despite its current success and enormous profits, is also ruthlessly subject to the trends I describe. To wit, Earthlink announced:
EarthLink Wi-Fi phones will allow consumers to save money by making high-quality phone calls over the Internet using a wireless handset. EarthLink is beta testing phones on the company's municipal wireless network in Anaheim, Calif.
"What separates our Wi-Fi phone from others is its ability to work over EarthLink's municipal Wi-Fi networks," said Steve Howe, EarthLink's senior vice president of voice. "This means that EarthLink is now bringing cheap phone calls using the Internet to the world of mobile – a major breakthrough.
There's no fundamental difference in the level of technology of a current, typical cell phone and a similar device that uses "Voice Over Internet Protocol over Wi-Fi". Imagine what happens in a few years, as this new type of phone gets cheaper, better, faster. Think it can't happen? It can - look at how cheap and how sophisticated "cordless" telephones are.
In conclusion,George Santayana said it well: "Those who cannot remember the past are condemned to repeat it." In my opinion, The Innovator's Dilemma provides ample evidence that radical changes, led by Broadband Wireless Internet Access technology, are underway for the telecommunications industry, and Wireless Internet Service Providers, innovative though they are, are by no means immune, protected, or any kind of exception to this trend.
By Steve Stroh
This article is Copyright © 2007 by Steve Stroh
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