As an engineer (albeit one who's also spent time in both marketing and management), I like to build things. The challenge of pushing the envelope, building a new product, dealing with really difficult technical problems-that's what gets many of us out of bed in the morning. But even though I enjoy a challenge, what I don't enjoy is situations where politics holds up progress. Who does?
Which brings me to third-generation (3G) cellular networks. The promise of mobile broadband wireless is irresistible-as engineers, we know how to make the technology work. My fear is that we won't get to build those really great new products, or at least get them into the hands of bandwidth-starved consumers, as fast as we might. The problem, I think, is the auction process used to allocate bandwidth. What began as a way to "balance the budget" (yeah, I believe that one . . .) has grown to a situation in which carriers worldwide are shoveling hundreds of billions of dollars into government coffers.
I've always viewed the auctions as a hidden tax, with consumers ultimately footing the bill through higher prices. To be fair, an economist at the FCC told me the auctions should have no impact on prices, which the competitive market determines. Still, I can't help but think that the huge debt loads placed on wireless carriers also put a floor under prices-and it gets worse.
I also think we'll see consolidation in wide-area wireless as carriers find themselves unable to balance their balance sheets. That means fewer carriers, less competition, higher prices-and less technological innovation, as carriers seek to minimize risk. The 3G systems might be able to provide 2 Mbits/second or even more-but will carriers ever offer such services to consumers? Or will they take the safe route, using 3G bandwidth for simply more voice capacity? The upshot: more of the same at higher prices with fewer choices for consumers.
It could be argued that the government shouldn't be auctioning off frequencies at all. Government might have stewardship of the airwaves. But ownership? Are they selling us something that's already ours to begin with?
All those great wireless products and services need to run on that big highway in the sky. I'm arguing for a less expensive way to get that spectrum into the hands of consumers, and to stimulate innovation, not consolidation. It's time that we get the benefits of mobile broadband. I just hope we can afford it.
Craig J. Mathias is an Analyst with the Farpoint Group (Ashland, Mass.).
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