Two new waves in wireless space

When wireless hot-spots started springing up in cities circa 2001, this shift had a dramatic impact on the way people interacted. Released from their wireline chains, people were no longer constrained to use their computers in isolation.

Now two new trends are set to make waves again in the wireless realm.

The first new trend: The skies will be open to wireless broadband later this year.

In May 2006, the U.S. Federal Communications Commission (FCC) will auction airwave spectrum to allow broadband Wi-Fi on airplanes flying over North America on a ground-to-air network.

This will open new vistas of consumer and business services for travelers – and new revenue streams for telecom, VoIP and other providers. Many players are jockeying for position, notably telecommunications giant Verizon, which has announced it plans to bid for the licence.

But many other players, not just big telcos, may also try to get a piece of the action, says Greg Welch, CEO of GlobalTouch Telecom Inc., a VoIP provider based in Los Angeles, Calif.

“This could be a telecom play only, but other providers of ancillary services may also be interested,” he says. “Content providers like Google or Yahoo may get involved, and even a company like Microsoft may want to get into this space and get control. With broadband access, these companies can push their search engines, portals and content.”

But the auction raises many questions, he says. Will whoever wins the licence try to control the services or content pushed down? Will other regulatory bodies such as the Federal Aviation Association (FAA) restrict how or when travelers can use broadband services? Will airlines themselves make a play to offer services, as Boeing did in 2005 when it started offering satellite-based Internet services?

These are the types of questions that will be answered as the playing field becomes clearer in the future, he says. The opportunities will be exciting for service providers. “This expands competition immensely. Everything’s starting to sing together: IPTV, VoIP, different streaming videos, sites and portals. All these services will be wrapped up in a big bow and provided to passengers on airplanes,” says Welch.

Rich Tehrani, president of Technology Marketing Corp. (TMC), a publisher of communications industry news based in Norwalk, Conn., believes airplane Wi-Fi will encourage demand for airline travel, and will have a dramatic impact on business travel.

Tehrani points out that business travelers are currently cut off for large blocks of time from telephone, e-mail and corporate networks. With VoIP, phone calls will no longer be restricted, as VoIP calls don’t cause the interference with navigation systems that cell phones do. “This will unleash all that time wasted on flights,” he says. “This means wherever business people are, they will be able to communicate in the air with their clients and staff.”

Many companies are already transitioning to VoIP, says Tehrani, and airline Wi-Fi will stimulate demand further and encourage more services. In addition to making more productive use of time, Tehrani also points out VoIP will have a mobilizing effect on companies, as staff will no longer need to wait until the boss gets back from New York or London to learn about business decisions made while he was away.

Another new trend that will have a dramatic effect in the wireless space is Wi-Max, a more powerful form of Wi-Fi, also expected to make its debut in 2006.

Cities such as San Francisco and Chicago are planning to introduce the technology in the near future. Some industry observers say this will make Internet access pervasive and very cheap, perhaps even free in some instances.

But it’s difficult to speculate about the effects of Wi-Max, as no implementations of the technology or the associated business model to fund it have been made yet, says David-Michel Davies, executive director at the New York-based International Academy of Digital Arts and Sciences, which presents the annual Webby Awards.

Wi-Max is essentially Wi-Fi with a wider range and higher throughput, but the two are different technologies, he says. “Many news stories confuse the two. What you’re seeing proposed in Philadelphia, for example, is just Wi-Fi provided by EarthLink.”

Atlanta-based ISP EarthLink invested about $20 million to build and operate Philadelphia’s Wi-Fi network. Other cities that are considering laying down the infrastructure for true Wi-Max have yet to settle their business models, says Davies. But even if the intention is to offer Internet access for free, cities will need to make upfront investment. “If you look at some of the proposals that are being made, that’s what you see a lot of civic debate about. Should this be something that taxpayers pay for and receive for free?” he says.

But if and when Wi-Max and cheap, pervasive Internet access does arrive, the impact will be as dramatic as the introduction of wireless in 2001, he says. All manner of services that people would love to have, from knowing when the next bus or train will arrive to smog levels, will be possible. “A company that wanted to provide a smog alert or other type of city service would be able to buy this wholesale spot service instead of creating or buying a network,” he says.

Even the mundane and static billboard might change dramatically to become like the advertisements in futuristic movies like Blade Runner. “They’re not connected to the Web now, but if you could do that cheaply, suddenly information can change and be updated all the time to let people know what’s going on.”

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