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February 24, 2005

Seybold vs. Unlicensed Spectrum

By Nancy Gohring

Wireless Week posts an interview with analyst Andy Seybold, who answers questions about a wide range of wireless issues: In addition to his typical pro-CDMA comments, Seybold also took the opportunity to warn against using unlicensed frequencies for any commercial service and vaguely refer to all the businesses that have failed after trying to use unlicensed frequencies because of interference. Seybold’s main reason for warning against the unlicensed bands is because the potential for interference prevents a reliable offering. There are a couple of realities that he misses. For example, at one point he says that someone else might put up a network nearby that interferes, either on accident or because they say “the hell with the others.” The fact is, it’s pretty rare for someone to do that while saying “the hell with the others” because if you interfere with someone else, you’re also causing interference, and thus a reduced level of service, on your own network. That seems silly.

He specifically suggests that the risk of interference for systems that might extend wide area networks in-building by using unlicensed networks is too big, especially when customers pay for a “solid, reliable wireless connection all of the time.” It’s interesting that he would specifically use the in-building coverage example because ensuring good Wi-Fi coverage and capacity in a building is much simpler than using Wi-Fi in a wide area setting. Enterprises have been doing it for years. End users have as good a chance of getting a “solid, reliable wireless connection” over an in-building WLAN as they do of getting a “solid, reliable wireless connection” essentially anywhere within the coverage area of a cellular network.

Seybold also very clearly believes that Wi-Fi cannot be a solution for municipal networks. He’s right that Wi-Fi was originally built as a local area networking tool and is now being used as a wide area technology. Most people who use it as a wide area technology will tell you that it has limitations and isn’t ideal as such. But that doesn’t mean it can’t work—it is working as a wide area networking technology. There are plenty of cities in the U.S. that have built municipal networks. What option do they have at the moment? They certainly aren’t going to use one of the cellular technologies. They’re too expensive and require unavailable spectrum. And clearly the commercial providers aren’t meeting their needs.

Seybold also makes clear his views that Philadelphia is making a big mistake by pursuing a municipal network. He says that Wi-Fi is the wrong choice for such a network and that the city has basically been duped by some vendors. He also calls Philadelphia “weird.”

Seybold is on to something though when he mentions HSDPA. He suggests that users will stop using Wi-Fi, especially in Europe, once HSDPA becomes available because of the high price of Wi-Fi. It’s not yet clear how HSDPA will be priced but there’s a chance that the presence of HSDPA will put pressure on the hotspot operators in Europe to lower their prices. Otherwise, Seybold could be right and HSDPA might offer a better value.

Seybold also touches on WiMax a couple of times, noting that the best use for it will be for backhaul for cell companies. He says that he doesn’t believe any carrier will replace their WCDMA or CDMA networks with WiMax. That is likely true. The operators have far too much invested in their existing networks to completely change directions to replace those networks with WiMax, especially when the mobile version of WiMax is so unknown.

He also says that voice over WiMax won’t change the 3G market. I see voice over WiMax as a solution for areas that have no landline connectivity at all for voice. WiMax could cost-effectively and quickly bring fixed voice and data services to underserved communities. My sense is that those types of voice over WiMax services are getting far more attention than any voice over a mobile WiMax service that might come down the road and that might appear to be comparable to cellular offerings.

Posted by nancyg at February 24, 2005 11:42 AM

Categories: Spectrum

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Indeed the operators in San Francisco are considered to be operating in one of the noisiest environments in the U.S. Despite that, I suspect that they'd argue their networks are "usable." NextWeb, for example, not only has 2,000 customers but also has VC investors. It appears they've learned to handle the interference potential.

On the topic of Wi-Fi vs. HSDPA, Glenn Fleishman has this to say:

[Seybold's] prediction is predicated on three assumptions:

* First, that people's bandwidth needs while mobile remain static with today's applications.
* Second, that hotspots continue to offer about T-1 speeds at best (that's changing already).
* Third, that enough spectrum exists for 3G to handle the quantities of people currently using Wi-Fi.

None of those conditions will remain true. If they did, then EVDO everywhere would satisfy today's and tomorrow's needs.

Posted by: nancyg at February 25, 2005 4:10 PM

Interesting comments and I have to agree with most of what you said, I said, however, I AM an advocate of in-building Wi-Fi as an extenstion of wide area networks in a controlled environment, have seen it work and believe that it will become a way that wide are and Wi-Fi interests can work together. VoIP on WiMAX we are going to have to see about.
As far as interference is concerned, ask the WISPs in San Francisco just how usable their Wi-Fi wide area systems are today--most of them are being interfered with on a regular basis--some by folks who don't know better and some by folks who are trying to create problems.
My main point about Wi-Fi as a wide area technology is that if Phila, for example, tries to use if for first responder primary data sevices they are asking for trouble. If they try and use it for secondary, off=loading of their own systems, this might work out for them.
However, I still do not believe that there is an economic model for a city, such as Phila, to run a local area technology as a wide area system.
Better to wait the year it will take for WiMAX to become mature and be available on a wide spread basis.
One final point--not only in Europe are Wi-Fi hotspots in jeoperdy because of HSDPA, but they are also in the same boat in the US--in fact, in the 32 cities where Verizon has EV-DO up and running Wi-Fi usage by EV-DO customers has ceased to exist--and this is in spite of the fact that EV-DO is still too expensive--when Cingular unleashes HSDPA, and Sprint adds their own EV-DO cities, it is going to be a very interesting world here.

Posted by: Andy Seybold at February 24, 2005 11:34 PM