Broadband wireless hype and hope

SAN DIEGO--In the midst of somewhat surreal surroundings (who knew San Diegans were such devotees of Fat Tuesday celebrations?), the broadband wireless industry is gathered here this week at Broadband Wireless World 2004 to acknowledge past mistakes, gauge the state of the sector and explore new opportunities. And like so many other divisions of the telecom industry, it’s doing so with a mix of humility, repentance and hope.

But it was hope that was springing eternal from the FCC’s John Muleta, chief of the wireless telecommunications bureau, when he gave the conference’s kickoff keynote on Tuesday. In a speech centered primarily on spectrum policy, he started with humility and repentance (“We didn’t do it right in the past--all of us, including the regulatory side”) but quickly transitioned to hopeful (“I feel very confident that at least on the regulatory side, we’re getting things right”). Muleta went on to talk about the FCC’s vision to allow maximum flexibility to users of spectrum, especially the audience of fixed wireless operators and technology developers he was addressing.

Muleta didn’t stop at hopeful comments about spectrum usage flexibility, however. He went on to make predictions--strong ones--about the potential of broadband wireless, envisioning 150 million subscribers by 2010 using affordable (less than $40 per month), highly available, highly reliable, ubiquitous and seamless services. Most significantly, Muleta evoked a long-term future where broadband wireless will supplant its hard-wired counterparts.

“No more wires, no more fiber optics--no tyranny of the cables,” Muleta said. “I think it’s possible. I think we can actually get there.”

The proof, Muleta contended, could be found in what the industry and the FCC accomplished in mobile communications by auctioning off spectrum to PCS licensees in the early 1990s and creating a competition-rich environment in which subscriber numbers are ever burgeoning and new applications abound.

“We got it right in 1993--we provided maximum flexibility for the PCS licensees,” Muleta said. “This model has worked. We just need to apply it to this series of broadband wireless bands.”

Such rhetoric is great for a conference kick-off, but I fear that the reality of the situation for this industry sector is not so rosy. Even the most optimistic, confident supporters of broadband wireless would likely stop short of making the kinds of predictions Muleta did and of comparing the U.S. potential of fixed wireless--which is still grappling with standards, technology development, equipment availability and consumer acceptance issues--to the mobile world. In the PCS spectrum auction era, the U.S. mobile industry was ripe for competition. Broadband wireless players face substantial entrenched competition in the U.S. market--most notably, cable modem and DSL providers. Many of the technology developers participating in this conference have little to no designs on selling their equipment in the U.S. market in the near future, choosing instead to target service providers in regions of the world where broadband networks are underdeveloped, customers are underserved and competition is under-represented.

The comments Muleta made at Broadband Wireless World were no doubt inspiring for his audience, and it’s certainly heartening to hear such confidence about a technology sector from anyone, especially a government official. But I, for one, hope that this part of the industry can retain the pragmatism it has gained from lessons learned and not get trapped--again--in a cycle of hype that only curtails the realistic potential of broadband wireless.

E-mail me at jmeyers@primediabusiness.com