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February 9, 2005

The Trouble With Dissecting WiMax…

By Nancy Gohring

A recent Economist article on WiMax, which Glenn commented on recently, has spurred some insightful discussion on Dave Farber’s Interesting People list: Part of the difficulty in examining the potential for WiMax, which I think becomes apparent in this discussion, is that arguments for and against WiMax’s potential vary dramatically based on specific markets. For example, some urban areas could make great opportunities for WiMax while others won’t. The same goes for rural. The argument changes again when you’re looking at operators that may used licensed spectrum compared to those who would use licensed frequencies.

I agree with the issue that some of Farber’s readers have with the Economist’s statement that urban WiMax doesn’t make sense. The Economist says that WiMax isn’t economical compared to cable or DSL. That may be true if you’re a telco or a cable company. If not, WiMax makes perfect sense.

It’s making sense for Irish Broadband, which uses gear from Alvarion (not quite WiMax of course) to offer broadband Internet here in Dublin. Eircom, the local phone company, has incredibly ailing facilities and has opted not to put the money into upgrading their network. As such, DSL is really tough to get (although my fingers are crossed that I’ll get it in my apartment). The cable company here only offers service in a small part of town and doesn’t have intentions of expanding the service. From what I’m reading in the paper and hearing anecdotally, Irish Broadband is doing quite well serving this broadband-starved market. They appear to be proof that WiMax (or something like it) can work in an urban environment in the developed world, although I would think that Dublin is an unusual situation in Europe.

Also, on a side note, the reason I’m not an Irish Broadband customer, is that my landlord won’t allow them to mount the dish outside of the building. I’m not sure how widespread of an issue that is here.

Still, it’s true that the price of WiMax gear will have to drop, but that’s the whole point of making it a standard. The real question here is whether the equipment can hit the market soon enough and then start decreasing in price quick enough for WiMax to gain some traction in the market.

Brett Glass, who apparently operates a wireless ISP, has some interesting proposals for making changes to spectrum regulation that he thinks would improve the market potential for WiMax. While many of them make sense, some are unlikely to be appealing to the FCC. For example, he suggests limiting the density of access points deployed by any one provider. While that could eliminate the potential of one company from dominating the airwaves, it seems to defeat the purpose of having unlicensed spectrum. If spectrum has been made available for use within certain parameters to anyone, you can’t limit those who choose to aggressively pursue using it.

He also suggests a ruling that dedicates unlicensed spectrum just for wireless broadband so as to avoid conflict with other consumer devices that use the same spectrum band. The problem with that is that you cut off the potential for innovation. If the rules around the use of unlicensed spectrum are too narrow, than no one can ever experiment in it and develop new products, like Wi-Fi.

Glass also says that the only potential benefit of WiMax is its potential to reduce equipment costs. He goes on to say that potential is limited because operators can already buy equipment based on Wi-Fi and that’s much cheaper than the initial WiMax will be. From my conversations with wireless ISPs who currently operate networks that are based on Wi-Fi, there’s a bit more to it than that. They say that the equipment they use basically tweaks Wi-Fi for their purposes, extending the range of typical Wi-Fi and doing as much as possible to add quality of service and other mechanisms crucial for operators. But since Wi-Fi was created as a local area networking technology and not a wide area networking technology, the result is less than ideal. WiMax was meant to address the shortcomings of such wide area networks that are currently based on Wi-Fi (as well as the shortcomings of all the other proprietary broadband wireless solutions out there).

Posted by nancyg at February 9, 2005 3:52 PM

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