more on Spectrum Gold Rush

[David Farber <dave () farber net>]

Begin forwarded message:

From: Jim Innes <innesj () watinc net>
Date: August 31, 2006 11:13:50 AM EDT
To: dave () farber net
Subject: RE: [IP] more on Spectrum Gold Rush
Reply-To: innesj () watinc net

Dave, in general I have a real problem with any application of  
Moore's Law
to technologies whose economic, development, production, and  
operations are
not essentially very similar to microprocessors.  In most cases, the
applications might make good copy or seminar banter, but when analyzed
closely relative to the technology in question, oftentimes they  
simply can't
stand on their own two feet.  Based upon this bias, I have to  
question one
of Dana's primary points:

"But the ability to supply that demand is
Increasing geometrically. The cost of providing that service, in the
form of Internet bits, is being driven down toward zero."

Perhaps one could make this argument relative to fixed wireless internet
access services based upon the ultimate conceptualization of it as a low
margin ubiquitous public utility type service. But for most mobile
requirements, including all of those requiring close to seamless  
coverage,
clean hand-offs at typical automotive speeds, reasonable in-building
coverage with small handhelds and decent battery life, all based upon  
robust
quality of service and system availability level, you can quickly  
dispense
with any glib Moore's Law analogies. For all of this, you need a lot of
expensive hardware that can deal w/ relatively high power RF power  
levels
that need relative large dimensions and capacities of transmission  
hardware
that is appropriate for the frequency band in use.

From what my clients (primarily the "Big Four" wireless carriers)  
and I see
for the foreseeable future, meeting these requirements will still  
involve
many, many thousands of cell sites at $150-600k capex each, with  
expensive
field maintenance operations infrastructures, monthly recurring costs  
for
backhaul to large hardened switch sites and antenna site rentals, and  
radio
base stations with backup power and HVAC, high performance antennas, and
thick, heavy low loss RF transmission lines to make it all play.

IMHO these last few items alone would seem to be highly resistant to any
Moore's Law effects on their costs of manufacturing, deployment, and
operations.

Best,

Jim Innes
Wireless Access Technologies, Inc.
130 Cricket Ave. Unit R
Ardmore, PA 19003
267 481 1461 fax 610 642 6202
innesj () watinc net

-----Original Message-----
From: David Farber [mailto:dave () farber net]
Sent: Tuesday, August 29, 2006 4:57 AM
To: ip () v2 listbox com
Subject: [IP] more on Spectrum Gold Rush



Begin forwarded message:

From: Dana Blankenhorn <dana () a-clue com>
Date: August 21, 2006 2:57:59 PM EDT
To: dave () farber net
Subject: Re: [IP] more on ] Spectrum Gold Rush

http://www.danablankenhorn.com/2006/08/the_sl_crisis_o.html

The S&L Crisis of Our Time
When the history of our time is written, the current spectrum
auctions will be its S&L Crisis.

Just as it did 25 years ago, the government is giving away a "sure
thing" to sharpies that in fact is anything but. Back then it the
power to get over-extended in the real estate market. Today it's the
power to get over-extended in spectrum hoarding.

Two things are actually happening at the same time.

  a.. We're finding all kinds of spectrum to be suddenly useful, so
the government is selling it to hoarders.
  b.. New radios and cellularization are making every hertz of
spectrum ever-more powerful.
All this is precisely what happened a decade ago, with fiber
bandwidth. The Internet boom made fiber lines appear attractive. But
DWDM, which I've called Moore's Law of Fiber, was proving that the
capacity of each line could be increased a hundred-fold, and more.

The same thing is happening again. Demand for wireless services is
increasing arithmetically. But the ability to supply that demand is
increasing geometrically. The cost of providing that service, in the
form of Internet bits, is being driven down toward zero.

Here we have some of the playes in the 1980s scandal. Recognize any
of 'em?

As in the Internet broadband market as a whole, the only thing
holding all this up is the bottleneck that cable and phone providers
have on the "last mile," the network that exists between a fiber co-
location and your home or business. Anyone who can bridge this gap --
with WiFi, WiMax, or any other radio-based solution -- can capture
enormous value (as in the open source business) by keeping their own
costs low and keeping their own prices below the competition
indefinitely.

The only reason this has yet to happen is because the value-capture
is short-term. At the end of this process, the value of a wireless
bit falls to nearly zero and nearly everyone goes under. (That's why
it would actually make sense for the industry to support municipal
WiFi builds.)


But the result of the auctions will be that new players have put
billions on the table, money they will need to get back by building
competitive services.


And so the process will begin.


When all this unwinds, we're going to find some crooks who bilked the
auction process, we're going to see some suckers who bought air, and
we're going to see the government bailing-out the industry in order
to save what is left, just as it did last time.


Let's pray the government in power then drives a harder bargain than
the one that met the S&L mess.



Dana Blankenhorn   dana () voic us
editor    www.voic.us

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