ARTICLE
Clash of the Titans: Open Access Paves the Way to 4G
By Robert Syputa, Senior Analyst
Contact the author at robert@maravedis-bwa.com

Fixed wireless convergence is causing IT, Internet software, Internet service providers, and PtP
content to clash with the walled cellular service environment. A critical factor in the productivity gains of IT, the widespread adoption of the PC/laptop environment, and the use of the Internet has been the open nature of development and access. Open access to data storage, communications, and computing power has enabled individuals and groups to engage in organic creation, assemblage, and program development, which has brought decades of productivity gains.
Open access has not occurred over wireless cellular mobile networks. Instead, business models have been based on operators’ centralized control over spectrum resources. Going forward, this constriction of the open access model will limit user adoption. Although still seen only at the fringes, usage patterns and demand surveys indicate a preference of a significant portion of consumers for open access on portable devices. We think this demand will develop strongly as open access devices appear in the market.
Attracted by spectrum as a revenue source, governments have openly endorsed prescribed use. But this is likely to change as concerted efforts and public pressure mount.
Prescribed use of technology by regulators and of service models by operators are political, regulatory, technical, and business realities. However, we believe the open access model will stimulate regulatory change and competitive adoption. That said, open access will be effective only to the extent that new systems and modes of operation present creative interfaces, applications, and access to content that compel user awareness and adoption. The wireless industry is bound by what is practical at each juncture, and 3G walled environments continue to see robust growth. Open access may be seen to be justified by iPhone or other examples, but the real test is whether its fostering rapid advancement of technology and business methods can overcome the advantages of legacy mass and momentum of incumbent business models.
What led to development of the Internet is now pushing the boundaries of wired connections toward the mobile platform of personal wireless broadband. Organizations continue to become more distributed, real-time, and accessible as a result. Long-term wireless is evolving to a similar flat, IP-based distributed networking and data communications model that is displacing switched connections and less optimal protocols, to consolidate communications methods across wired and wireless media. Similar to the shake-up in the old centralized computing model, more distributed and open access to applications and content will drive sea-change developments in wireless broadband that will disrupt centralized operator models.
This shift is due to a combination of push-pull factors: pressures for network and wireless link efficiencies, innovation, and broad participation push open development, while market forces push more open content and applications. These are countered by pressures to maintain the current cellular industry development environment and controlled streams of revenues. The pull factors include growing appetites for new applications and media. How best and more competitively these can be delivered, whether prescribed by operators or a user’s choice, will determine how operators structure their businesses.
Several industries have experienced drastic change as a result of distributed computing and broader access to information:
- The IT industry has restructured around networked computing.
- TV has restructured from a broadcast-dominated industry to a multiple-sources model.
- Business has restructured from centralized organization toward supply, distribution, and customer-facing organization.
- Information flow has restructured from location-based to personal-based communications.
- Cellular wireless is in the process of restructuring from low-bandwidth packet switched voice to data- and rich media-based content and applications.
In this overall clash comes a very present focal point: the open access versus business-as-usual walled garden access model for the 700 MHz spectrum, which is prized for its scarcity and appealing signal propagation characteristics. Over the past few years, efforts have been mounted by the various constituencies: WISPs, WiMAX, public interest, and other “open access” advocates have pushed for a more level playing field that would provide smaller, local, and independent operators and service providers a better chance to compete against dominant cellular and cable operators. Alternative operators have also pushed proposals to the FTC for dedicated use of some of the 700 MHz spectrum for a nationwide network, with the promise of prioritizing access for first-responders while adhering to rules for an open, neutral framework.
How spectrum should be regulated hinges on the best way to provide optimal use: what methods of regulation will best harness capital and development resources, encourage innovation, and provide useful public services including public safety and first-responder capabilities.
The WiMAX industry should aggressively embrace opportunities that will become available as auctions of 700 MHz spectrum take place, because this can be a catalyst for the broad shift to the open access, IP-based wireless network environment. Steps that should be taken now:
- A 700 MHz multi-service system profile should be pushed to the front burner.
- Related WiMAX Forum effort should also enable and promote multi-spectrum and multi-service systems development including:
- Prioritized access by first responder and public safety applications.
- Long-range rural access in combination with higher frequency, higher density / bandwidth combinations for suburban corridor and urban access networks.
- Video in competition with MediaFlo and DVB-H.
- Tiered and distributed multi-spectrum network deployment models and roaming. This should lead progressively to development of “smart distributed wireless broadband networking” that will be part of 4G.
FCC Chairman Kevin Martin recently confirmed his preference for open access to a majority of commercial 700 MHz spectrum in upcoming auctions.1
These latest moves for open access have been preceded by lobbying efforts; closed and open meetings with the FCC by members of the WiMAX Forum, WiFi Alliance, WISPA, Google,
EarthLink, eBay, Intel, Cisco, etc.; and counterefforts by cellular operators and other businesses over the past 36 months. This recent activity is heating up deadlines and upcoming auctions.
The FTC issued a white paper on broadband connectivity competition that encourages the FCC
to exercise care in designating specific uses of new spectrum, such as setting aside large blocks
for quasi-monopolies. This white paper may be accessed at http://www.ftc.gov/reports/broadband/v070000report.pdf
Maravedis gathers data from extensive interviews and research into the regulatory environment (available through Clear Spectrum), operators (WiMAXCounts), and IPR
(ClearInsight). Maravedis’ insider reports and newsletters provide analysis of rapid changes that are becoming crucial to the industry and to public awareness.
Recent Articles:
http://www.rcrnews.com/apps/pbcs.dll/article?AID=/20070710/FREE/70710012/1005/rss01
http://gigaom.com/2007/07/02/verizon-frontline/
http://www.precursorblog.com/node/429
http://www.dailywireless.org/2005/12/22/700-mhz-public-or-private/
1 FCC ’s Martin Bandies Open-Acces License For 700 Mhz Auction, RCR Wireless News (link)
http://www.handsoff.org/blog/
http://www.freepress.net/news/24695
