NYTimes.com Article: Silicon Valley Hikes Wireless Frontier

James Rogers jamesr at best.com
Tue Apr 8 14:04:34 PDT 2003


From: khare at alumni.caltech.edu
> 
> Pretty mild as PC Forum wrapup stories go... Steve's right on 
> in surveying the *broad* landscape for lay readers (well, 
> Times readers). And Wildseed itself might individually be 
> interesting, but the article is pervesely arguing why another 
> Microsoft *won't* emerge here. 


For better or worse, I think there is good reason to believe that the market
will consolidate down to only a very small number of players, though I have
my doubts these players will be any of the existing "big" companies to any
great extent.

The problem is a serious lack of standardization behind the front-end facade
of protocols like 802.11, Canopy, and similar.  For strict IP access this is
not a problem, but when they start talking about things like ubiquitous
multimedia over wireless there are a lot of critical components and
architecture decisions hidden in the backend of that network that are
required to make more sophisticated content scale geographically and work
well in general.  The companies that can invest in and coordinate somewhat
sophisticated content layers across a broad network early on will trump the
hodge-podge of small raw IP wireless providers even if there is ubiquitous
protocol compatibility (e.g. Wi-Fi) that lets people roam.  What you end up
with is a scenario where all the small providers will essentially have to
become a client network of one of the major providers with the sophisticated
content infrastructure to be commercially competitive.  

For basic Internet usage like we have today this isn't as much of an issue,
but when you start talking about things like broadcast quality media, it
becomes a big issue.  If consumers have the choice between subscribing to a
roam-able wireless service that offers, say, broadcast quality VOD as a
feature and one that doesn't, I would guess that most consumers would buy
into the wireless provider that is tied into an infrastructure with this
value added.

The reason this has to do with "standardization" is that you run into a lot
of constraints when trying to integrate the sea of small wireless providers
on the backend.  There is almost nothing in place that allows small wireless
providers to peer with content infrastructure providers or to be their own
CIPs, and many have designed their networks in such a way that such peering
is effectively impossible.  It simply hasn't been a design consideration for
the most part because it hasn't been a pressing issue yet.

I'm already seeing the beginning of the scenario where many of the small
wireless networks are vassals or franchises of the content infrastructure
provider who are themselves wireless providers.  "IPTV" and similar
architecture sensitive services are coming of age VERY fast right now and
the inability of many small wireless providers to adapt to these services
will eventually kill them or force them to "sell out".  Consumers will want
things like IPTV and this sets the stage for a market that will end up with
only a few major players pulling most of the strings.

My outlook is that the myriad of small wireless providers will flourish for
a little while (particularly since so much venture capital is being dumped
into them right now), but the inability of these services to effectively
deliver the rapidly advancing generation of more advanced content will
create a situation in the market where they are either annexed or
marginalized by those that can.  Either way, a natural monopoly will emerge.
If I was investing venture capital, I would skip the pure wireless provider
plays and put the money in wireless providers that were building serious
content infrastructure support into their networks, of which there are
actually very few.

My US$0.02,

-James Rogers
 jamesr at best.com




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