Wi Fi, Congestion, and Playing Well With Others

First Question: How much unlicensed spectrum is available and how is it used?

802.11b/g runs on the 2.4 GHz unlicensed spectrum (2400-2483), which is divided and used in three channels, as described in the diagram above.

Additionally, 802.11a, often used as a strategy to avoid the more crowded b/g band, runs at 5.0 GHz, which has eight non-overlapping channels in the 5.3 GHz range, and 4 in the 5.8 GHz range, so there's considerably more real estate to play with there.

Finally, 802.11n, still being standardized, is another option that provides more bandwidth and less interference risk. Some equipment companies are positioning their "pre-N" products (already released) for in-home distribution of digital content, and we know that 802.11n using MIMO is on the development path for outdoor Wi Fi as well.

See this link also for more details on the potential of 802.11n, a new flavor of Wi Fi on the horizon.

Second Question: But what about interference when two parties both broadcast in the same proximity using the same 802.11 technology? (e.g., Starbucks right across the street from Austin Java)

First, Part 15 FCC Rules govern the use and behavior on Unlicensed Spectrum and they do not give preference among legitimate users - it's an open field - a "commons" that we must share. On the other hand, its hard to beat the price of not paying for licensed spectrum. So there are trade-offs between unlicensed and licensed spectrum business models. I have my opinions, but I wanted some confirmation, so I spoke with my friend Murray Freeman, CEO of Wi Fi Texas, who has over five years experience using Wi Fi to manage commercial networks locally, and I value his opinion. Here's what he told me, with my opinions and commentary sprinkled liberally about.

It boils down to a case of noise. The good is that there are no licensing fees for unlicensed spectrum, by definition, but the bad is that a network operator must adapt to a new business model to work cooperatively with what is in essence a public good. There is no splitting of spectrum bands in practice. Rather, congestion results when two APs operate in close proximity without some level of coordination. Without cooperation, the noise would just get louder and louder, and ultimately compromise the signal quality for both operators, something like the Mutually Assured Destruction we talked about back in the Cold War days. In practice, while there is no defense against intentional interference and no automatic allocation of the available bandwidth, there is a practical solution - cooperation, which also happens to confer a distinct advantage for the first mover. That appears to be the way this market is developing, making it a "land grab" market.

How so? Since it's impractical for a second party to enter the market and build a network knowing there will be congestion when a Wi Fi network is already deployed - in a word, overbuild, then it becomes far more economical for a second provider to approach the first mover, who can operate as a "neutral host" and negotiate an accommodation - in other words, they can lease space to following service providers and provide for coordinated joint use of shared facilities. Some Wi Fi access points (APs) for example, allow a single AP to be shared by multiple parties, so that it is far more economical to buy time from the existing network owner than it is to overbuild - in a sense, it becomes an economic monopoly for the first mover, but the physics, politics and economics don't allow the first mover to enage in monopoly abuse.

And, given that the DSL and Cable network operators are moving in the opposite direction of being neutral hosts (last summer, the Supreme Court Brand X decision allowed cable operators to run a closed network and then the FCC decided soon after that to apply the same conditions to telcos) - closing their networks to third parties as their existing contracts expire - creation of such a neutral host model fills an emerging need and is a likely direction for the municpal wireless industry.

This becomes a motivation of municpal RFPs - to create a neutral third network that third party providers like Earthlink (Echostar, DirecTV, etc, etc) can use, or that multiple smaller players can use to develop small niche markets.

Others are likely to determine that the money to be made is less in retail market development, than in being a network operator of a such a local monopoly high-speed wireless data network. Earthlink is building on its ISP business model, while gaining the additional benefit of more control over its destiny by owning the network instead of leasing expensive bandwidth from at&t, Verizon, etc.

The municpal wireless market has developed in its early stages as such a land grab business, with much focus on the early-mover cities, especially the large ones like Philadelphia, San Francisco, and Houston. When a frst mover wins an RFP, it sends a signal to the rest of the players that a certain territory "has been taken." There's an implication that a "franchise" has been won, whether or not that is the case or that word is used. At this early stage with participation by smaller players and lots of open territory, there are too many strikes against a second mover in any market, and no territory looks that attractive, I think, for congestion to materialize as suggested by Question 2 above to become an immediate issue.

Entry by a large player into the unlicensed space at some point would indeed be disruptive, however, and would raise the congestion issue again. But that doesn't appear likely in the near term, given how many other opportunities there are to spend energy in more constructive ways, and I've always assumed that such competitors would sooner use licensed technology then compete, or buy subscribers than enter a market, than they would be to enter a market and compete with similar technology to kill off a smaller competitor.

With that reasoning, my opinion is that most current players building wireless networks and ISP businesses seek to develop a defined market and then plan on either a) switching to a more robust technology (802.11n MIMO, WiMAX) that will better address the congesion issues or b) simply selling their accumulated subs to a larger telecom company as an exit strategy.

So the bottom line to these questions, in my own meandering way, is that while I don't believe there exists a defense to a player who would enter and deploy an overlay Wi Fi network with the intent of damaging a first mover's operation, I'm not sure its that big of a risk in the short term. While congestion would appear to be the Achilles Heel of this technology, intentional congestion would be an irrational action and would not be an immediate threat in any case. Unintentional congestion, on the other hand, remains a factor of using unlicensed spectrum and is a network management issue that must be addressed as a cost of doing business.

Given that there's a current, compelling need for last mile broadband in spots throughout even a very-well-served market like Austin, a cooperative model for market development that would rationally and deliberately deal with early-stage congestion issues makes the most sense.