Hotspots Cold Cells

Thursday, July 03, 2003

Two stories in the Boston Globe this past week highlight concerns 802.11 (or Wi-Fi) connectivity:

The problems with Wi-Fi Hotspots are symptomatic of the fundamental conflict between the cellular phone industry and the rest of our society and economy. The current telecommunications infrastructure has one overriding purpose -- to generate billable events. It is a tragic mistake to assume that this is the only way we can pay for vital infrastructure since it is an extremely inefficient and dysfunctional system that extracconfts an unbearable cost on society.

The term wireless has been appropriated to mean "faux wire". The cellular phone system emulates land phones where you pay per wire not per phone. That "wire" is used for billing and the system provides you with cell phone circuits that have the same limitations as their wired counterparts. It's no surprise that the cellular industry created Bluetooth which tried to recreate the limitations of the wire only without the wire.

This is in sharp contrast to 802.11 which just transports packets and the connections you make have no inherent limits because the packets can be relayed to any other Internet connection in the world. But it isn't easy to control or bill for the packets -- they aren't easily metered like phone calls. Even if you can count the packets it is difficult to charge for usage when a video stream can use a thousand times as many packets as an audio stream. You wouldn't be able to tell whether a web page costs a penny or a hundred dollars to visit.

This doesn't prevent the hotspot companies from trying -- to use a typical hotspot you have to go into your browser to set the billing information as if you were making a phone call. This makes it difficult to use the hotspots as basic infrastructure for a device. The novelty of being able to check your email at a Starbucks isn't really that compelling. When traveling you find yourself traveling through a number of hotspots--each requiring a separate signup. Since the size of the hotspot is small compared with a phone cell, it is difficult to justify overlapping coverage.

Just as we were able to use dial up modems to connect to the Internet despite the phone network, we can now use a similar method to connect to the Internet despite the cellular network. You can use a cell phone or just buy a transceiver (AKA the workings of a cell phone) on a PC card (full or half-size) and connect to the Internet via cellular networks. In fact the service acts very much like a dialup modem. The networks now offer speeds from 56kbps (GPRS, $30/month from T-Mobile) to 150kbps (1xRTT but listed as a possible speed for $80/month from Verizon and Sprint). The prices change and will drop. These are current as of June 2003.

The same chipset can be added to a PDA to turn it into a phone. But the user must still have a relationship with a cellular carrier in order to use the service. You must buy the phone service first and then have to choose among the devices offered by that cellular company. Their only interest is in the billable traffic and treat the devices themselves as novelty items be it a cell phone or a PDA. With the cellular carriers are intermediaries it is hard for the manufacturers to be responsive to users needs.

The 1968 Carterfone Decision was a key step in creating a marketplace for products and services that could take advantage of telecommunications. Prior to that decision it is illegal to make a device that connected to the phone network such as an answering machine or a modem. Everyone knew how easy it was to connect a device to the red/green pair of the phone wire, In Carterfone and related decisions the Court found that the phone companies had basically lied about the dangers of allowing a marketplace.

Such claims are echoed in the cellular companies' claims of harm if people were allowed to switch carriers and keep their phone numbers. The transceiver is not that different from the red/green pair.

Even when one can switch carriers (as with the GSM SIM card on "unlocked" phones) the ability to create innovative devices is hobbled by the circuit-based billing model which is in conflict with the Internet's persistent connectivity. It's expensive to add a transceiver to each device and sharing a transceiver requires a way to apportion the costs to each device. It makes it hard to walk past a connection point and transmit metering from your heart monitor without a prior arrangement.

Many seeming futuristic applications are quite simple once we have simple connectivity. If you use your PDA for car navigation you should be able to easily use the same traffic data you can view on your desktop. Instead of requiring a GPS receiver for each device you can have one built into the car and be able to get very good reception while making the information available to all devices.

Despite the problems with the hotspot model connectivity is becoming increasingly available. Hotels are finding that even a small percentage increase in occupancy justifies providing high speed Internet connections as an amenity with no additional charge. As sites get large capacity Internet connectivity for their own use, sharing it will simply be a courtesy to customers.

Even within the home there are few devices and applications that take advantage of connectivity but that is going to change. As connected PDAs become available they will become increasingly interesting as platform for applications. For cities, deploying 802.11 access points will be the most effective way to deliver services and provide safety. A single investment in such a system will make it easy to deploy new capabilities incrementally. One can just use a PDA with a web browser to access city data while responding to an emergency.

While the cellular system can deliver connectivity now it is will be difficult for them to respond to a quickly evolving marketplace because of their circuit-based infrastructure and their billing model. As with land lines, Voice over IP means that telephony is no longer in their control. While their current infrastructure may not support such a demanding applications, 802.11 and other access networks are far more capable. A standard 802.11 PDA becomes a fully capable telephone simply by adding software. As hotspots are replaced by amenity connectivity such telephones will simply bypass the cellular networks.

But it won't be to save money because the cellular companies will have to lower their prices to take advantage of their own internal IP networks and competition. The value of Voice of IP will be in its flexibility -- the ability evolve telephony as an application. Any device that takes advantage of IP connectivity can provide telephony as part of the mix along with playing music, exchange email and the innovative applications that will make them indispensable.

As we work through the impediments of the confusion over hotspots and cellular telephone vs the Internet we will then have to face up to technical problems that we encounter as we introduce real mobility to the Internet. This is not about the "wireless" Internet, it's dynamic Internet. As we make it easier to connect the devices the deployment of wireless connectivity will accelerate. The cellular carriers must understand how this will impact their business and reexamine their fundamental business model.

At very least I want to be able to buy the best device and then just add a transceiver. After all, I don't buy my tires until I choose my car.

Bob Frankston Site