Letter to the Editor: Let's get muni-WiFi and WiMAX players together

Mon, 10 Sep 2007 09:03:31 -0400

Lynnette Luna’s suggestion, “Let's get muni-WiFi and WiMAX players together,” (Fierce Broadband Wireless, August 23, 2007) sounds sensible enough. However, to mix the National Football League and Gertrude Stein: Upon further review, there’s no there there.

Why? Two reasons. First, for at least the next few years, i.e., the length of time that a network installed today can reasonably expected to remain in place, Wi-Fi will remain the wireless technology of choice for client connections. Second, aside from client connections, specific technologies don’t matter.

Let’s examine each of these assertions.

According to Xirrus, there are more 300 million WiFi clients in the world today. This number is growing rapidly, with at least 20 million new clients shipping each quarter. Shipments are likely to accelerate with the advent of dual-mode WiFi/3G handsets. In-Stat forecasts that more than 200 million dual-mode WiFi/cellular handsets will have shipped by 2010. For example, Apple alone is expected to ship more than 1 million WiFi-equipped iPhones in the first two quarters after its introduction.

With WiMAX largely passing 802.16d by, the only truly viable WiMAX technology is 802.16e. Yet, a leading WiMAX market research analyst recently told me that only about 60,000 802.16e client devices had been shipped, in total, through the end of Q1-2007.

Compared to the installed base of WiFi clients, that’s rounding error. In a game where the score is 300 million to rounding error, 300 million wins. The power of WiFi’s installed base will trump whatever technical advantages that WiMAX may (or may not) have for client connections.

The situation for WiMAX clients is unlikely to change anytime soon. The August 24, 2007 edition of Fierce Wireless reports that Current Analysis analyst Peter Jarich talked about how he believes Sprint may have set itself up for trouble because of its “inflated” expectations for WiMAX. Jarich says that Sprint can't control the electronics industry, so consumers may be disappointed when they don't find WiMAX-embedded MP3 players or gaming devices available right away.

It should be noted that better in-building penetration is NOT one of WiMAX’s advantages. Operating in roughly the same spectrum as WiFi (2.5 GHz for WiMAX versus 2.4 GHz for Wi-Fi) and using the same encoding (OFDM), WiMAX’s ability to penetrate buildings is roughly the same as Wi-Fi’s. The higher power of the licensed band will offer a slight advantage to WiMAX but it’s the equivalent of penetrating one additional wall – hardly an elixir for indoor penetration ills.

But, even if WiMAX isn’t widely used for client connections, won’t it dominate the connections beyond the client link into the core of the network? In a word, no.

For sure, WiMAX will be one of the technologies used for various forms of backhaul. However, it will not dominate that field because, aside from the client connection, the specific technology employed simply doesn’t matter. Anything that gets the job done will suffice.

Consider for a moment your cell phone. You may know that it connects to a cell tower using CDMA or GSM. But, do you have any idea what kind of technology is used to backhaul that cell tower? Do you care? Of course not! Further, if you needed to know or care, you probably wouldn’t use a cell phone.

The same applies to wireless data services. WiFi will be the pipe to the client. What’s behind that pipe does not and must not matter to the user. If it doesn’t matter to the users, muni wireless network operators, whether municipalities themselves or service providers providing service to municipalities, are free to choose whatever technology offers the best combination of features, performance and price for the application.

In some cases, especially where the network operator holds a license for spectrum, the choice will be WiMAX. In many other cases, the network operator will find that other wireless technologies, including the myriad proprietary offerings on the market, will better suit their needs. This will be especially true in cases where the operator does not hold a spectrum license or does not want to use licensed spectrum for this particular application.

Given that WiMAX will not be widely used for client connections and that it is only one of many good backhaul choices, it is hard to build a compelling case that municipal leaders should expend the effort needed to enter what would inevitably be protracted negotiations with Sprint or Clearwire to tailor their WiMAX networks to meet municipal needs. A far better use of time and effort would be for civic leaders to examine building and operating their own wireless network for city use (and NOT for residential access!) or working with service providers whose business models support anchor tenancy by municipalities and Wi-Fi client connections. -Bert Williams

Bert Williams is the vice president of marketing with Proxim.

Is the muni-WiFi market headed for a shakeout?

Mon, 07 May 2007 06:59:58 -0400

Is the muni-WiFi market beginning a shakeout? In recent weeks we've seen a number of companies changing their tune about the muni-WiFi market. It looks like the days when vendors gave a muni-WiFi network to cities for free in exchange for selling Internet access to their constituents are fading fast.

Airport Infrastructure Management, which agreed last year to install and operate a seven square-mile wireless network across Wilkes-Barre, PA at no cost to the city, has now asked the city to put up a $1.25 million loan if subscriber uptake falls below projections and the company defaults on the debt.

MetroFi says it's no longer planning to offer free public WiFi in newly contracted cities that won't commit to minimum municipal service purchases. And Earthlink, suffering from steep losses at its MVNO joint venture Helio, revealed it is pulling back on its muni-WiFi business to focus on its existing contracts and larger cities for the rest of the year.

It's another realization that the business case for muni-WiFi networks doesn't revolve around offering universal Web access to constituents. Rather the emerging successful muni-WiFi plans center on creating greater cost savings for cities. There are already too many examples of poor consumer uptake of WiFi services. More than a year ago, the city of Taipei in Taiwan launched a city-wide WiFi system in a bid to create a "cyber city," but the number of subscribers is less than anticipated. Portland's experiment with universal wireless Internet access was launched with much fanfare late last year, but many residents say the network does not deliver on its promise.

These changes should be a wake-up call for many municipalities who may find themselves in the same position as Wilkes-Barre--looking for that rare vendor willing to bank on revenues from Internet access to residents in exchange for a free network. It's also a wakeup call for many vendors who flocked to the space hoping for a new cash-cow business.

Municipalities can no longer expect a free ride with WiFi, and vendors and operators can no longer have the "if we build it, they will come mentality." A lot more thought and planning must go into a muni-WiFi project in order to make the service justifiable, whether that's generating revenue or working to save taxpayers money by making government workers more efficient. We are entering a new era that takes a lot more thought when it comes to muni-WiFi. And municipalities have entered the point of no return as WiFi becomes a key public-policy strategy. They simply must get into the game and partner with muni-WiFi companies.--Lynnette

P.S. We just added Scott Richardson, CSO of Clearwire to our lineup of keynote speakers at our WiMAX Strategies conference in Chicago June 21. Richardson will join our stellar lineup of speakers from across the WiMAX ecosystem that includes Barry West, CTO and president of 4G Mobile Broadband at Sprint Nextel. Check out the agenda here: http://www.wimaxstrategies2007.com