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Friday, February 14, 2014
Tech Companies Push for Better Wi-Fi Access
Cable companies Comcast, Time Warner Cable Inc. and Charter Communications Inc., along with tech giants Google and Microsoft on Thursday announces a new coalition to bolster efforts to expand access to Wi-Fi.
The group, to be called WifiForward, will add heft to an existing lobbying effort the companies are making in Washington to increase the allocation of airwaves that make Wi-Fi possible. The companies have already been independently pushing the government to release more spectrum for unlicensed uses, meaning anyone can use the frequencies for things like Bluetooth or garage door openers as long as they don't cause interference.
In the United States, more Internet traffic is carried over Wi-Fi than any other path. Wi-Fi runs on unlicensed spectrum, parts of the radio frequencies that anyone can use as long as the technical rules established by the Federal Communications Commission (FCC) are followed. Recent analyses indicate that Wi-Fi in our homes, businesses, schools and libraries is becoming congested by a deluge of data from more devices, applications and services connecting to the Internet without wires. Indeed, Cisco predicts that by 2017, Wi-Fi will handle a majority of all data consumers' access from the Internet.
There are upcoming opportunities for the FCC to make more of this vital resource available: in an auction of TV spectrum, in a proceeding to open the 3.5 GHz spectrum for wireless broadband, and in an ongoing proceeding in the 5 GHz band.
WifiForward has released a new economic study that finds unlicensed spectrum generated $222 billion in value to the U.S. economy in 2013 and contributed $6.7 billion to U.S. GDP.
The WifiForward coalition will marshal support to: 1) protect and strengthen existing unlicensed spectrum designations; 2) free up new spectrum for unlicensed use at a variety of frequencies, including low, medium, and high frequency bands; and 3) establish investment-friendly, transparent and predictable unlicensed rules that encourage growth and deployment.
The group doesn't include carriers like Verizon Wireless and AT&T, for which the growing ubiquity of Wi-Fi poses a puzzle. AT&T built its own network of 32,000 Wi-Fi hot spots to unload data and alleviate congestion on its network. But after spending billions of dollars to upgrade to faster, so-called LTE technology, AT&T and its peers are now looking to bring that traffic back.
"We are now at a place where the pricing is right, LTE is performing very, very well, and you want to drive utilization of these networks," AT&T Chief Executive Randall Stephenson said at an analysts conference in December.
If Wi-Fi becomes too ubiquitous and lets smartphone users avoid upgrading to larger data plans, it could erode carriers' revenue growth.
"Verizon and AT&T have put all their eggs in the basket of incremental usage for incremental dollars," said Craig Moffett, senior analyst at MoffettNathanson LLC. With more ubiquitous Wi-Fi coverage, "suddenly it is a whole lot harder to figure out how these companies are going to grow."
Competition among wireless carriers has heated up in the last year, and companies have responded by lowering prices. But increasing smartphone adoption and growing data usage continue to mean higher average bills.
For Google and Microsoft, improving Internet access through Wi-Fi allows more users to access their online services, such as Google search and Bing, thus driving more ad revenue.
It could also help bolster Google's own Wi-Fi offering. Last summer, Google took over from AT&T as the supplier for free Wi-Fi hot spots at more than 7,000 Starbucks. The search giant also has built a Wi-Fi network covering Mountain View, Calif., where the company is based.
The cable industry's major players - Comcast, Time Warner Cable, Cox Communications, Bright House Networks LLC and Cablevision Systems - joined together in 2012 to share their roughly 250,000 Wi-Fi hot spots to provide Internet access outside the home to all their broadband customers, a total of about 41 million.
In the last six months, Comcast has boosted the number of hot spots available to its customers to 1 million, aggressively deploying new high-capacity Wi-Fi routers that beam an additional hot spot inside customers? homes.
Coverage isn't nearly good enough to substitute for cellular networks. But the Wi-Fi networks do give the cable companies a toehold to begin offering mobile-phone service, an idea the companies are exploring.
Comcast has already edged into the space by offering a mobile app its voice customers can use to make calls from anywhere that has a wireless Internet connection, including Wi-Fi hot spots.
The announcement of the coalition comes in as Comcast revealed plans to acquire Time Warner Cable for $45.2 billion through a stock swap. It is unknown if this acquisition will impact on Time Warner Cable as a partner within WifiForward.