Vos Loss’…

Like a German submariner of old stalking an Allied convoy, the FCC has launched what I consider a rather significant torpedo to the Verizon/ATT/Sprint wireless franchises.

Open Platform

The licenses of the upper 700mhz band C block of spectrum shall be required to provide a platform that is more open to devices and applications. This would allow consumers to use the handset of their choice and download and use the applications of their choice in this spectrum block, subject to certain reasonable network management conditions that allow the licensee to protect the network from harm.

Now this may not be the most perfect of options vis a vis an open source mindset to the C block. But it does several things:

• It blows away the stranglehold the carriers have on the CPE market vis a vis use of their networks. When a customer can go to anyone buy their Belkin or Nokia 880 tablet communicator insert the equivalent of a SIM card and walk away happy; the days of closed source cell phones is pretty much over. No more 24 month contract - handset shuffles. You keep what you like till you either get bored with it or it dies.
• Flat Rate is Here. I will expound on this in a future post but suffice to say, per minute charge rates will be going away. The best way to meet the FCC mandate on portability and usage is with a data centric infrastructure. Essentially extending Ethernet to the wireless arena for CPE. The consumer is used to flat rate plans for data streams regardless of whether its FIOS, xDSL, or ISDN. Attempting to carry the minute usage model into this space will meet consumer resistance. Once flat rate is in place legacy carriers have only one choice — flat rate plans for legacy cellular. Either that or prepare to lose their embedded investment as customers abandon the space.
• “…more open to devices and applications.” Can you spell Skype? Or Gmail Talk as your voice grade subroutine? No need for channels for voice and data defined by the carrier. Now the customer can decide how to slice it since what will be hitting the antenna is all digital. And that flips the voice grade cellular model on its head. Its no longer the network as much as the device-application pairing utilized.

Of additional interest is this little piece:

“For licenses based on REAG’s licenses must provide service sufficient to cover at least 40% of the population within four years, and 75 percent of the population with the license area by the end of the license term.”

Now let me ask you, gentle reader, have you ever known a Telco to be able to meet that kind of build out schedule? Well neither have I. Who benefits? Well possibly Google. How? Google is a service business. They will want to induce additional services using the bandwidth. Their mindset will be less interest at layers 1,2,3 of the OSI model. There up there at layer 9 and above. I could easily see Google come out with a spec for use of the bandwidth, partner with the OEM product developers for the hardware and work a cobroker arrangement like FON is attempting with WIFI in this band. Customers buy the equipment relieving Google of the capital cost and deployment headaches. The customer recoups their investment through customer attraction and revenue sharing. Its viral, a model Google is very familiar with.

Anything lacking? I can only think of one - interoperability is not mentioned in the preliminary notice. It would be a shame to come this far and not at least have that kind of ability on the nationwide bands. Hopefully that will be covered in the auction detail to follow.

Ref