Democracy & Technology Blog Wireless: Listen to the Technology

Often lost in the public policy debate on municipal telecom networks is any halfway serious discussion of technology, and thus of economics. Yes, I know that Wi-Fi wireless access has been upgraded to a “fundamental right” in San Francisco even as the Supreme Court says mere property rights have now been Constitutionally downgraded. But beyond these silly new assertions by politicians and judges, what does the technology tell us about where broadband access in general and wireless access in particular are headed?

Helping to answer these questions is a Qualcomm marketing executive named Jeff Belk. Several years ago, Jeff penned a series of popular riffs and white papers chronicling his experiences with Wi-Fi hotspots. Wi-Fi is great, he insisted, for lots of things. But not as a replacement for ubiquitous mobile voice and data. At the time, Wi-Fi was hyped as a replacement for 3G mobile wireless networks. Didn’t happen. Isn’t going to happen.

Now Jeff is back with a new paper on Wi-Fi’s bigger but newer cousin, WiMAX. Written for the layman, Belk’s paper debunks the “magic” of Wi-Fi and WiMAX often repeated by politicians, journalists, and even many in the technology community. He does not dispute significant roles for these technologies but urges fellow executives and technologists (and by extension, public policy makers) to get real. No more bull that ignores the real performance and practical economics of competing technologies and solutions.

Over the years, George Gilder and I have made many of the points contained in Jeff’s paper (most recently in the August 2004 and April 2005 issues of the Gilder Technology Report, which both focused on 3G, WiMAX, and Wi-Fi). Belk’s analysis is not exhaustive, but it raises important questions, and although Belk works for the leading 3G wireless technology company, his views are reinforced by the fact that Qualcomm just bought Flarion, a start-up would-be competitor who was developing a type of WiMAX system. Although Qualcomm has been working for many years on OFDM (orthogonal frequency division multiplexing) technologies, the basis for the WiMAX standard, and acknowledges OFDM is and will be useful in many wireless settings, Flarion has developed its own substantial OFDM intellectual property portfolio. Together these companies now probably have more OFDM expertise than the actual WiMAX companies do combined.

Also on point is a new analysis from Andy Seybold, which questions the rosy deployment scenarios (and thus the performance and finances) of metro Wi-Fi. Tropos, the top supplier of these mesh Wi-Fi systems, is making advances, as its articulate CEO Ron Sege made clear at our recent Telecosm conference in Lake Tahoe. No doubt he is thrilled that his product has been declared a new right. What all CEOs would give for such a declaration.

Sege makes an at-first-blush compelling case that Wi-Fi can “disrupt from below” in the classic Clayton Christensen model of disruptive innovation, where a product that is cheap and inferior, but good enough to attract a niche market, can eventually rise up to displace the robust incumbent. But in the end I don’t think Wi-Fi fits the classic case of disruption from below because classic disruption requires the disruptee to be in the realm of overshoot. Overshoot is defined as giving customers more performance and functionality than they really want or need. I don’t think either broadband or mobile communications are in a state of overshoot (are you perfectly happy with coverage, speed, and voice quality?). My PC might be in overshoot but not my mobile phone or DSL line.

Anyway, Seybold’s analysis, and Belk’s, should be balanced against Sege’s claims, and those of mayors and hypesters everywhere.

-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.