Today is the beginning of the 700MHz auction, and it got me thinking about the dynamics of the whole thing, and how it reminded me a bit of the rush to blanket the country with wifi. Remember a few years ago when everyone was thinking how good an idea that was? I remember thinking to myself, "am I missing something, because this sounds like a loser to me."
Wifi barely goes 100 feet with any kind of decent signal and so to light up a city with wifi would mean having a wireless router every few hundred feet.
How could so many people sink so many hundreds of millions of dollars into something that obviously couldn't work? I don't know either. But the idea was so compelling, that huge corporations ignored the seemingly obvious.
Well here we go again with 700MHz. Folks are waxing poetic about the significance of this new spectrum to the future of wireless Internet services.
The problem with the 700MHz spectrum is the opposite problem of wifi. First, a lower frequency signal means it carries less data per second. Second, signals in this frequency range go a long, long way, through walls and across miles. This is great for one-way signals. After all, that's how current analog TV is broadcast. But while going only a hundred feet or so isn't very efficient for Internet signals, going many miles with a strong signal isn't great either.
The technical issue: the farther your signal goes, the more data one needs it to carry -- because it must serve more people. Imagine a 30-megabit Ethernet cable being expected to serve 10,000 people. Good idea? Not so much.
Ok, so you say you can solve that by having more towers in a given area so some people can talk to one tower and some to another, splitting up the load. But the problem is that 700MHz signals are so strong that you can't put multiple towers close too each other, because they interfere.
Don't believe me? In the US, our GSM cell phones already operate in both the 850MHz and 1900MHz bands. Some areas have 850MHz service, some have 1900mhz service. 850MHz is low frequency also, and therefore a close comparison to the 700MHz spectrum (particularly since the 700MHz band really operates at closer to an 800MHz frequency).
Riddle me this Batman. Does any cell carrier use 850MHz as anything other than filler (if they use it at all) in urban areas? Nope, because it carries *less* data and you can't have as many towers. Uh Oh.
(NOTE: if you really want to understand the technical issues, read this article on gigaOM. The best part is the comments from people with radio engineering backgrounds.)
So why would all these non-carrier companies (like Google) be getting all giddy about 700mhz for data? Answer: the same reason people believed they could light up major metropolitan areas with ubiquitous wifi.
In other words: I. Don't. Know.
Actually that's not quite true. Google is a special case which I do understand. Google just wants to shake things up and open up the market (which they've already succeeded at). They *ain't* trying to win. And they aren't trying to be a carrier. They *are* smart enough to know that actually buying this spectrum for anything other that voice traffic filler is a loser.
The bottom line is the 700MHz spectrum works well for the incumbent carriers, for which any spectrum is good spectrum. For the other non-incumbent entrants -- not so much. Actually, the fact that Frontline dropped out is some reflection of sanity around the issue. Of course Paul Allen is still in it so there is still quite a bit of err... potentially misdirected optimism. It will be interesting to watch this horse race.