by Alan J. Weissberger, alan at viodi.com
[Editor’s Note: For the latest FCC info on the upcoming Auctions, please see this FCC press release and this one regarding the frequency bands.]
Executive Summary
Last week there were two very important announcements from Google re-enforcing their commitment to broadband wireless networks (they are already the WiFi provider for the Mt. View Municipal Wireless Network and are partnering with Earthlink for the S.F. Muni WiFi Project, if approved by the city):
1. If their four conditions are met, Google stated it would bid at least $4.6 billion for some of the 700M Hz UHF TV spectrum that the FCC will be auction off sometime next year. A key condition for Google to bid is that the winner of the auctioned spectrum be able to wholesale parts of it to other companies who want to resell it. Google says that would allow new entrants into the wireless and broadband world, thereby increasing competition. [The carriers are adamantly against it, saying that such rules would be tantamount to forcing all bidders to implement Google’s business plan, which involves reselling wireless capacity. They further point out that there is nothing now stopping Google from bidding for the spectrum, and if it wins, to wholesale it to resellers.]
http://googlepublicpolicy.blogspot.com/2007/07/restoring-competitive-balance-to.html
http://www.networkworld.com/news/2007/072007-fcc-auction-faq.html?fsrc=rss-wireless
2. Sprint announced it plans to develop a “Mobile Internet Portal” with Google using their Mobile WiMAX network for access. The objective is to combine Google’s search and communications services on mobile WiMAX devices that will be offered by Sprint. For example, users could use Google to search for a pizzeria without having to enter a ZIP code, or have the phone automatically broadcast their whereabouts to friends when they are setting up a meeting using Google Talk instant chat service or e-mail on their phones.
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/27/AR2007072700009.html?hpid=sec-tech
Discussion
Let’s try to put these two announcements in perspective and speculate on what it could mean for Google and WiMAX. We will also look at an investment Google just made in a technology to improve indoor coverage for 3G cell phones.
We have previously reported that the forthcoming 700 MHz spectrum auction creates the opportunity for new wireless carriers (e.g. WISPs) to bid for the spectrum and use WiMAX technology to deliver broadband Internet (and possibly, VoIP) services. While FCC rules for the auction have made it likely that AT&T and Verizon can bid up the cost for pieces of that spectrum, and make it harder for a single national network to be created, the FCC report states, there is still an opportunity for Google, Microsoft or others in the Internet/IT community to acquire at least 10 MHz of spectrum for national coverage, separately or allied with others including DBS companies (e.g. Direct TV, EchoStar), the report states.
The 700 MHz spectrum is particularly attractive to potential WiMAX companies because it has physical advantages over other spectrum being used for wireless access, including being “more robust and far less subject to atmospheric or foliage attenuation,” has the ability to penetrate building walls and windows, reducing the need for outdoor antennas, does not require line of sight between transmitter and receiver and has superior signal propagation, reducing the number of base stations required. For further information, please refer to the Telephony article: WiMAX will threaten incumbents’ bundles
http://telephonyonline.com/wimax/news/wimax_incumbent_bundles_072507/
We think that if Google submitted a winning bid for the 700MHz spectrum, they would wholesale it to WiMAX network providers whom they would partner with to provide mobile search and Internet applications. But the CTIA (International Association for Wireless Telecom Industry) takes a different point of view regarding the 700MHz auction. They say that Google’s proposed rules would rig the auction and that a company worth $160B doesn’t need a government handout.
http://www.ctia.org/advocacy/policy_topics/topic.cfm/TID/2
Since CTIA is against Google’s four conditions, whom would Google partner with, if their conditions were accepted and they submitted a winning bid? Before we jump the gun, we think the operative question is will the FCC accept Google’s positions? The N.Y. Times does not believe Google’s conditions for bidding will be accepted by the FCC:
We shall soon see- perhaps as early as July 31st – when the FCC next meets to consider the criteria for the 700MHz auction.
SPRINTs partnership with Google will give a big boost to the Mobile WiMAX industry and likely encourage other service providers to team up with Google. Sprint brings its WiMAX access network, location detection and presence capabilities to the front line, whereas Google will bring Google Apps, granting users access to Gmail, Google Calendar and Google Talk.
A series of WiMAX embedded devices (presumably made by SPRINTs equipment vendor partners- Motorola and Samsung) will be able to utilize these services. These devices might include connection cards, laptops, personal media players, mobile Internet devices, and (maybe) dual mode cell phones. However, we are still waiting for the tablet PC/Video Player with a WiMAX interface that Intel displayed at the WCA’s January 2007 Symposium. Without an affordable mobile device, capable of viewing compelling video content, we don’t think that WiMAX will be the huge success SPRINT and Clearwire have forecasted.
SPRINT is planning initial WiMAX tests for Chicago, Baltimore, and Washington DC by the end of the year. Commercial availability is expected starting April 2008 in selected markets, with further expansion to 100 million people by the end of 2008. As previously reported, SPRINT is also teaming with Clearwire to help share the infrastructure cost of the WiMAX network build-out. Eventually, over 300 million customers will be served.
http://www.multichannel.com/article/CA6461484.html?industryid=47198
It is not apparent if the new WiMAX enabled devices offered by Clearwire will also have the capability to access the SPRINT-Google Mobile WiMAX Internet portal. The partnership is between SPRINT and Google and does not include Clearwire, at this time.
Another interesting question is why Google has invested in a 3G cell phone technology- femtocells -via a direct placement in UK start-up company- Ubiquisys:
http://www.ubiquisys.com/ubiquisys3/pressreleases.php?id=42
Ubiquisys was formed in 2004 to address the challenge of poor indoor cell phone coverage by bringing its innovative “ZoneGate” femtocell technology to market. The ZoneGate femtocell is a small ‘zero-touch’ plug-and-play device that plugs into a home broadband connection and provides high-quality 3G coverage within the home. Unlike WiFi, ZoneGate allows people to use their existing 3G cell phones to access services. ZoneGate means excellent mobile coverage at landline rates and allows mobile carriers to deliver innovative new services right where their customers need them – in their homes.
The ZoneGate system is said to be unique in applying a standards-based approach to network integration by supporting both UMA and SIP/IMS protocols.
For more information, please visit www.ubiquisys.com
Conclusions
We sense that Google is planning to invest billions of dollars in the mobile Internet- most likely to combine mobile search with location- based services. That would be a big plus for their partner service providers and will likely bring them more advertising revenue from location based merchants. Offering Google apps to mobile users will also be important. While not wanting to be a wireless service provider or WISP, Google definitely wants to team up with those players to expand its Internet presence. The SPRINT partnership is proof of that.
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