WI-FI MANUFACTURERS AND OPERATORS ORGANIZING TO LOBBY FCC
Despite hype, wireless LAN (Wi-Fi) industry still is in its infancy, and that has been reflected in lack of defined presence in Washington. However, as FCC examines use of unlicensed spectrum such as 2.4 GHz band used by Wi-Fi’s 802.11b standard and 5 MHz band used by 802.11a, several organizations are emerging to represent Wi-Fi’s interests at agency. Wi-Fi has multiple industry sectors participating in its growth, and separate paths appear to have been chosen by Wi-Fi hardware manufacturers and commercial access point, or hot spot, operators. Some believe uncertainty shown in those nascent lobbying efforts reflects disparity in predictions on how fast Wi-Fi is to grow and to what extent industry will become profitable.
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“The wireless LAN market is one of the few growth stories left in town,” wireless consultant Peter Kingsland wrote last week in report titled Wireless LANs at the Edge: Unlocking Corporate Mobile Data Revenues. But most analysts agree Wi-Fi growth requires adequate spectrum, issue FCC is examining. One Wi-Fi group -- Wireless Ethernet Compatibility Alliance (WECA) -- through law firm Wiley, Rein & Fielding has made multiple filings with FCC on spectrum availability and interference issues, most recently filing 2- page supplementary comment on 5 GHz interference Sept. 3. WECA was formed in 1999 and has grown from standards-setting body into full-fledged policy group, representing manufacturers of Wi-Fi connectivity devices such as Apple, Avaya, Cisco Systems, Linksys and 3Com; chip makers such as Broadcom and Intel; and PC manufacturers such as Dell, Gateway, Hewlett-Packard and IBM. All of those companies have watched rapid growth of sales of Wi-Fi peripheral equipment and Wi-Fi equipped PCs.
Another area of growth in Wi-Fi is in commercial hot spot operators, also known as wireless Internet service providers (WISPs). Wireless consultant Peter Bell predicted in report this summer that WISPs were serious threat to wireless companies developing their own high-speed Internet offerings: “3G mobile operators are going to see the high- usage, high-value cream of the mobile data market subscribing to high-speed wireless LAN services before they even get their own marketing machines into gear.” On Sept. 23 and 24, entrepreneurs will be gathering in San Jose for conference promising to show how to become “profitable wireless hot spot access provider.” WISPs already have begun forming their own association, called Wireless ISP Assn. (WISPA), with little more than dozen members to date. Their Web site says organization is “still in the evolutionary stage.”
More established organization representing WISPs is Broadband Wireless Alliance (BWA), which last month announced formation of several task forces, including one that will focus on communicating with FCC. Another task force will work with WISPs to avoid interference in unlicensed spectrum, which BWA said is proactive way to avoid FCC performing task for industry. However, consultant Kingsland didn’t offer much hope for future of WISP industry, predicting its collapse even before it had established itself: “We have effectively seen the end of the standalone hot spot owner- operator model.” Commercial hot spots will continue to be launched, he said, but not by individual entrepreneurs. Rather, established telecom companies will move in, acquiring small operators. One example of that is Deutsche Telecom’s T-Mobile, which has purchased MobileStar’s Wi-Fi hot spots. T-Mobile recently announced its intent to continue MobileStar’s plan to equip nearly every U.S. Starbucks with Wi-Fi, project that helped drive MobileStar into insolvency.
Nearly $1.5 billion in venture capital was invested in Wi-Fi in first 6 months of 2002, Growthlink Research said, and U.K. research firm BWCS predicted industry would be producing $7.3 billion in revenue by 2006, with 17 million global Wi-Fi users. Predictions on number of hot spots varies widely. InStat/MDR, in commonly cited prediction, foresees 40,000 global access points by 2006, while BWCS predicts 114,220 by 2006, 128,000 by 2007. However, Wi-Fi enthusiasts point to rapid growth of hot spots and relatively modest cost of installing one and say those numbers grossly underestimate Wi-Fi’s potential growth.