3G SHOTS FIRED

Sixty bucks for a broadband connection — doesn't seem like a bad deal. That's how much my cable modem costs, and there's an added benefit: I could take that new connection with me anywhere — at least anywhere Verizon Wireless has an EV-DO network.

Just as Sprint is starting to turn up its own 3G network — giving Verizon Wireless its first real competition for broadband speeds — Verizon is initiating the first blow in what could become a pricing war. It dropped the price of its 3G data card service from $80 to $60 for unlimited use with the purchase of a standard wireless voice plan. Sprint remains at $80 for its service, and it still has fewer networks until its aggressive rollout by the end of the year. But you can bet that as Sprint gets its 3G juggernaut standing upright, it will respond to Verizon Wireless' first jab. Cingular Wireless is expected to jump into the fray by the end of the year, promising 15 to 20 UMTS networks, eventually augmented with high-speed downlink packet access upgrades. So come December, we could have three new broadband providers offering something approximating nationwide metro broadband access for $60 per month.

The Tier 1 carriers don't want to be broadband competitors. They don't want their wireless channels to become the equivalent of the dumb pipes of DSL or cable. And that's what their business connection services essentially are, a conduit to the Internet with perhaps a VPN client tossed in for good measure. Their real money is expected to come from the consumer content and business applications they ship over that pipe. While $60 per month may seem like a lot of money compared with the paltry $4 to $8 of data revenues carriers are collecting per customer each month, those Vcast and Vision customers are using data in a much different way than a guy at an airport with a laptop.

EV-DO and UMTS services will be true broadband services, promising speeds in excess of 300 kb/s — better than some DSL connections today. And if they are true broadband services, customers will use them like broadband services, surfing the Web heavily, downloading massive files — whether Excel documents or Metallica songs — and talking over their Skype accounts. That kind of data traffic pales in comparison to the paltry megabyte or two of streaming music or video or 100 kb/s MMS message that carriers are trying to monetize over the same network. For the amount of network data traffic of one heavy broadband user you could horn in dozens of “wireless” subscribers on the network.

Unlike a wireline network, where you can build more access lines and add more fiber, there's only so much information that can be shoved into a frequency radiating from a cell tower. You can bet carriers would rather use that capacity to support hundreds of consumers with their incremental spending rather than a few broadband hogs sucking up the data streams.

It's not that carriers aren't interested in becoming broadband providers. They are — that's what Wi-Fi and WiMAX are for. Their 3G networks, however, are for someone special. And that isn't you, Mr. Laptop user.