3G winter blahs

Third generation wireless, once a tantalizing and nearly tangible promise held out to us by the wireless industry, is suddenly leaving a lot of people cold and pessimistic about the future. Maybe it's just that the temperatures outside have plunged across much of the nation recently. Maybe it's just that post-Christmas letdown we get upon returning to work.

Actually, there are real reasons why both industry watchers and potential users seem to be down on the prospect of 3G, from the only modest acceptance of WAP to the anticipated mess of a spectrum auction.

The situation with WAP devices and applications is a real conundrum. Its market uptake - not wildly successful but not terribly discouraging - has left us with a pretty wide variety of interpretations. Carriers were unbridled in their hyping of WAP during the past year, as if WAP were 3G, and now they generally seem to be pleased with the number of WAP phones and services they have sold. Meanwhile, users largely seem to despise WAP or at least things they have come to associate with WAP such as pricey access, primitive applications and low data speeds.

At this point, we should start getting very concerned about how that disparity in judgments is going to affect eventual 3G deployment and user acceptance. Is modest WAP success enough to stall wireless companies from moving to 3G over the next few years? Maybe not, but when you combine WAP warmth with a hesitancy by service providers to devote big spectrum and spend big deployment dollars on 3G, you have the hallmarks of a delayed transition to 3G services.

Also, with users disappointed in WAP, some are probably starting to feel like carriers have conned them into buying wireless Internet service before its time. This could ultimately lead to cagey acceptance of real 3G services, especially if the price isn't right.

With carriers advertising WAP as "next generation wireless" and "wireless Internet," users are confused into thinking that there is no interim step to 3G. It remains to be seen how this might affect evolution of other "2.5G" wireless technologies due out next year such as Bluetooth and NTT DoCoMo's i-mode.

Other stumbling blocks on the way to 3G: A potential 3G spectrum auction may be more than a year away, but it is a ticking time bomb nonetheless. Companies aren't sure they have the wherewithal to upgrade their networks, let alone the billions that it will surely take to participate in yet another spectrum auction. The 3G auction will either be a complete bust or threaten the financial health of the auction winners.

In addition, predictably and reliably, a standards debate still surrounds 3G, with most of the world planning wholesale upgrades to W-CDMA and U.S. carriers for the easier compatibility of cdmaOne.

So most of these problems actually sound familiar to those who have been around the wireless industry awhile. In fact, it almost seems like the wireless industry has not learned lessons from its previous generations. The trouble with WAP sounds a lot like the trouble with an earlier wireless data technology, CDPD, also overhyped and also reviled by users because its real viability did not match its marketed promise.

The anticipated financial strain associated with 3G also harkens to the recent past, when seemingly endless transitions to digital technology kept carriers in debt for years. Likewise, any mention of spectrum auctions should send shivers down the spine. The current 700 MHz license auctions represent of spectrum auction at its best - everyone spending probably way too much money on spectrum of questionable quality. At their worst, spectrum auctions become tools of industry dominance for big wireless companies looking to drive little ones out of business.

These issues may give us reason to think 3G is further off than we once hoped and that the transition will be a painful process for many companies. That's a reason to be depressed about the future: It looks too much like the past.