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Wavelengths
xG may add twist to
broadband-wireless
game
By Donny Jackson
Sept. 21, 2007
We're less than four months away from the start of bidding in the 700
MHz auction, but be assured that potential bidders already have started
preparing strategies to ensure their participation makes business sense
for their companies.
While there have been some public moves -- Verizon filing suit against
the FCC to get rid of open-access requirements attached to C Block
spectrum being the most notable -- most work in this area has been kept
private, as bidders try to keep their plans as secretive as possible.
For instance, companies are evaluating which spectrum to bid on, how
much the spectrum is worth to the company, whether to partner with
others and what options are available to reach customers if they do not
secure 700 MHz spectrum, which is expected to be the last significant
U.S. spectrum auction for some time.
Open-access and public-safety encumbrances associated with the C Block
and D Block certainly have added some notable wrinkles, evaluating
whether a business case can be made for bidding on spectrum is nothing
new. Although complicated market questions may influence the final
decision, the fundamental question is: "Given that we still have to pay
to build out a network, how much can we afford to bid on this spectrum
and still keep investors happy with our returns?"
According to numerous studies, U.S. consumers have become increasingly
reliant on mobile communications, and many do not own static phone
lines. Clearly, being able to play in the mobile arena is critical to
the future success of content companies such as Google, eBay and Apple.
But the largest players -- Verizon Wireless and AT&T -- have held firm
in controlling content on their networks, and net-neutrality rules have
failed on Capitol Hill and at the FCC. So, short of bidding billions of
dollars for spectrum and billions more to build a network, what are the
other options for newcomers wanting some control in the wireless space?
Sprint has had many mobile virtual network operator (MVNO) partners in
deals that have yielded mixed results, and content players have to have
reservations about their mobile strategy that depends heavily on the
health of a company they don't control. On unlicensed spectrum in the
crowded 2.4 GHz band, Wi-Fi has been a rousing success from a usage
standpoint, but evidence increasingly points to the fact that the
short-range technology is not economically viable for a mobile,
wide-area network.
M2Z Networks' proposal for a wholesale WiMAX network in the 2.1 GHz
band
recently was rejected by the FCC, although a new proceeding for the
spectrum may be started soon -- but not soon enough to provide clarity
to 700 MHz bidders. There's also a possibility that vast "white spaces"
spectrum between TV channels could become available. But no one knows
what policy will govern those airwaves or when it will happen. The
failure of a Microsoft device to show the ability to avoid TV signals
in
a recent FCC test certainly was not promising.
One intriguing alternative is xMAX, a mobile VoIP system developed by
Florida-based startup xG Technology. The system provides wide-area
communications via short-duration pulses that require so little power
they can be used in the unlicensed industrial, scientific and medical
(ISM) 900 MHz band. The first xMAX network is scheduled for commercial
launch at the end of November, and the company claims it will have the
first 4G network late in 2008.
Of course, there are questions about xMAX. Many wireless engineers have
questioned the company's claims of an inexpensive, long-range,
low-power
system during the past couple of years. And the xG demonstration of
xMAX
two weeks ago did not go as planned, when a mysterious military-grade
jamming of the ISM band occurred the day of the showcase, according to
xG officials. (The demonstration worked for a smaller audience the
following day, when the jamming disappeared, the officials said.)
Meanwhile, xG has not shown that xMAX works in a truly mobile
environment. But company officials say the problems associated with
calls from moving vehicles will be solved before the network launch at
the end of November.
If so, xG becomes an intriguing variable in the broadband wireless
space. Although xMAX is not the most spectrally efficient wireless
technology on a bits/hertz/second basis, its low-power characteristics
means a service provider does not have to buy spectrum and should
result
in longer battery life for mobile devices.
By all accounts, the base stations are less expensive. And, if a
service
provider owns spectrum and can turn up the power, the technology should
yield even greater ranges and data throughput.
The timing of an xMAX launch in late November is notable, because that
likely will be about the same time potential bidders must declare their
intent to participate in the 700 MHz auction. Also interesting is the
fact that one of many representatives of financial institutions at the
xG demonstration was Colm Donlon, a mergers-and-acquisitions whiz who
helped engineer the Nokia-Siemens deal last year and eBay's purchase of
VoIP provider Skype two years ago.
xG Technology CEO Rick Mooers has noted that xG needs bigger partners
to
enable large-scale adoption and pursue its use in other sectors -- for
instance, the power efficiencies and peer-to-peer communications of
xMAX
would seem to be an ideal fit for public-safety communications. Whether
a large manufacturer or service provider is interested in partnering
with a small company is questionable, because they typically prefer to
have greater control.
The possibilities are numerous. Would a Google or an eBay see xMAX as a
way to bypass incumbent providers and secure direct access to customers
without having to sink billions into a spectrum bid? Would a large
manufacturer be interested? Meanwhile, xG has flirted with giant
service
provider Telefonica for more than six months regarding a deployment in
Mexico to challenge the Carlos Slim monopolies in that country.
For bidders who do not secure spectrum in the 700 MHz auction, xMAX
could be a nice alternative. The question is whether the technology
will
be available at that time, because it may be tempting for one of the
aforementioned possibilities to make a move with xG even before the
auction, assuming their engineers are confident the xG system will work
as advertised in a mobile environment.
Mooers repeatedly has said xG Technology is not for sale. But he is CEO
of a publicly traded company and would have to listen to any legitimate
offers -- and history has shown that any company can be sold, if the
price is right.
Even if the company is not bought, a successful network launch could
make xG a notable wild card in the 700 MHz auction process. After all,
if xMAX enables providers to offer wireless broadband services without
owning spectrum, does it make sense for bidders to spend billions for
spectrum before they ever begin to build a network?
We should learn the answer during the next several months.
E-mail me at djackson@mrtmag.com.
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In the news
New E-911
rules mean more reporting for wireless carriers
By Donny Jackson
September 21, 2007
Nationwide commercial wireless carriers could have to
generate 30 times as many E-911 location-accuracy reports in five years
to comply with new FCC rules approved by the commission last week,
according to an official for TechnoCom Wireless, a wireless location
services provider and testing company.
Amateur radio
enthusiast turns 100
By Mary Rose Roberts
September 19, 2007
Amateur radio enthusiast Harry Mills celebrates his
100th birthday today. Mills has been involved with radio, both amateur
and professional, since 1921.
M2Z Networks
files suit to overturn FCC ruling
By Donny Jackson
September 18, 2007
M2Z Networks has asked a federal appeals court to
reverse a recent FCC ruling that denied the fledgling company 20 MHz of
2.1 GHz spectrum needed to make its vision of offering a free,
family-friendly broadband wireless service nationwide a reality.
FCC announces
E911 deadlines
By Mary Rose Roberts
September 17, 2007
The Federal Communications Commission last week ordered
that wireless carriers must meet the Enhanced 911, or E911, Phase II
location accuracy requirements at the public safety answering point
(PSAP) service-area level. They also must meet interim, annual
benchmarks over the next five years to ensure that they achieve
PSAP-level compliance no later than Sept. 11, 2012.
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