Subject: [NEXTEL-1] No Wires, No Rules - Wi-Fi Hi-Five Bye-Bye

From: [email-masked]
Date: Thu, 22 Apr 2004 00:28:24 -0400

No Wires, No Rules

New wireless technologies will soon reconfigure
the Web using radio spectrum that doesn't cost a dime

APRIL 26, 2004

High-speed Internet access has been as rare as sunshine in winter
in Campsie, a tiny village on the northern coast of Northern Ireland.
The town is located in a sparsely populated rural area, which makes
it too expensive to install traditional broadband technology. And the
town is too far from larger cities like Londonderry to use their
Internet
facilities.

The people of Campsie shouldn't give up hope, though. Earlier this
year, British telephone giant BT Group PLC (BT ) invited about 100
Web surfers in the village and three other rural areas to sign up for
a promising new wireless Internet service. BT has installed a series
of radio towers that beam signals across the countryside to small
antennas on the sides of customers' homes. The system is about as
fast as traditional broadband but much cheaper to set up. Why? BT
is using less-expensive equipment and a free, unlicensed part of the
radio spectrum, avoiding billions of dollars in fees. If the test in
Campsie goes well, BT may roll out the service to consumers across
Britain by next year. "This will revolutionize society, just as mobile
telephony revolutionized society in the 1980s," says Mike Galvin,
director of Internet operations at BT.

It's just one example of how the unlicensed portion of the radio
spectrum is
turning into a hothouse of technological innovation. For years, these
radio
frequencies were neglected, the lonely domain of cordless phones and
microwave ovens. In the past few years, however, engineers at
institutions
from Massachusetts Institute of Technology to Dutch giant Royal Philips
Electronics (PHG ) have been hard at work on a grander vision for the
unlicensed radio frontier. That tinkering is what sparked the creation
of
Wi-Fi, the wildly popular wireless Net technology that took off last
year
with the support of chip giant Intel Corp. (INTC ).

Wi-Fi is just the first step, though. Hard on its heels are four equally
innovative technologies -- WiMax, Mobile-Fi, ZigBee, and Ultrawideband
-- 
that will push wireless networking into every facet of life, from cars
and
homes to office buildings and factories. These technologies have
attracted
$4.5 billion in venture investments over the past five years, according
to
estimates from San Francisco-based investment bank Rutberg & Co.
Products
based on them will start hitting the market this year and become widely
available in 2005. As they do, they will expand the reach of the
Internet
for miles and create a mesh of Web technologies that will provide
connections anywhere, anytime. "Now you have a toolbox full of wireless
tools that can help with each problem, whether it's reaching a couple of
inches or a couple of miles," says Ian McPherson, president of Wireless
Data
Research Group, a market research firm in San Mateo, Calif.

These technologies will usher in a new era for the wireless Web. They'll
work with each other and with traditional telephone networks to let
people
and machines communicate like never before. People in what have been
isolated towns, be it in Ireland or Idaho, will find themselves with
blazingly fast Net connections. Zooming down the highway, you'll be able
to
use a laptop or PDA to check the weather or the traffic a few miles
ahead.
Back at home, couch potatoes will be able to dish up movies from their
PC
and transfer them to the flat screen in the living room -- without any
wires
at all. And tiny wireless sensors will control the lights in
skyscrapers,
monitor utility meters in suburban neighborhoods, even track toxicity
levels
in wastewater. This will give rise to the Internet of Things, networks
of
smart machines that communicate with each other.

What are the technologies behind this vision of the future? ZigBee,
along
with its radio standard, is the technology that coordinates
communication
among thousands of tiny sensors. These sensors can be scattered
throughout
offices, farms, or factories, picking up bits of information about
temperature, chemicals, water, or even motion. They're designed to use
little energy because they'll be left in place for five or 10 years and
their batteries need to last. So they communicate very efficiently,
passing
data over radio waves from one to the other like a bucket brigade. At
the
end of the line, the data can be dropped into a computer for analysis or
picked up by another wireless technology like WiMax. Products based on
ZigBee, which has been nurtured by giants Philips and Motorola, are
expected
to start hitting the market later this year.

HUGE HOT SPOTS

WiMax is similar to Wi-Fi. Both create "hot spots," or areas around a
central antenna in which people can wirelessly share information or tap
the
Net with a properly equipped laptop. While Wi-Fi can cover several
hundred
feet, WiMax has a range of 25 to 30 miles. That means it can be used as
an
alternative to traditional broadband technologies, which use telephone
and
cable pipes. It's an early version of WiMax that's bringing the Net to
Campsie. WiMax can't be used right now if you're moving, say in a car.
But
backers of the technology, including Intel and Alcatel (ALA ), plan to
have
a mobile version out within a few years. A similar standard, known as
Mobile-Fi, will be available two or three years from now. It will let
people
surf the Net at speeds even faster than their home broadband links today
-- 
while they're racing along on a train or in a car.

Ultrawideband serves a very different purpose. The technology lets
people
move massive files quickly over short distances. In the home, that will
allow users to zap, say, an hourlong Sopranos show from a PC to the TV
without any messy cords. On the road, a driver who has his laptop in the
trunk receiving data over Mobile-Fi could use Ultrawideband to pull that
information up to the handheld computer in the front seat. Although the
standard hasn't been finished yet, Motorola already is selling chips
based
on an early version of the technology.

One reason for this flurry of innovation now is the nature of unlicensed
spectrum. Traditionally, a big company like AT&T Wireless (AWE ) paid
billions of dollars to the federal government for an exclusive license
to
use a swath of the radio waves. That allowed the company to provide
mobile-phone service to its customers without any interference, but it
blocked other players from using the same radio frequencies. By
contrast,
most of these technologies use unlicensed spectrum. That means that
anyone -- really, anyone -- can try out any idea they can imagine on
those
frequencies. Think of it as open-mike night at the local pub. "The
licensed
world tends to move in this fairly ponderous way, but with unlicensed
spectrum people can try out other things and learn there is a whole
market
sitting out there," says Kevin Werbach, an independent technology
strategy
consultant.

Wi-Fi set the pattern for stardom that these emerging technologies hope
to
emulate. A group of companies got together to establish a standard for
the
technology, touching off a virtuous cycle. High volumes brought the cost
of
Wi-Fi gear down, low costs boosted demand, and strong demand led to even
higher volumes. Now, Intel, which stoked the frenzy with a $400 million
marketing push last year, sells its Wi-Fi chips to computer makers for
$20
each, down from $45 a year ago. Some 54 million laptops, PDAs, and other
devices with Wi-Fi are expected to be sold this year, according to
researcher In-Stat/MDR, four times as many as in 2002.

For all their promise, these new technologies face steep challenges.
Giants
are battling over the exact standards for Mobile-Fi and Ultrawideband,
and a
final resolution may not come before 2006. Until that happens, equipment
makers won't be able to start mass production, meaning costs won't be
driven
down by economies of scale. Mobile-Fi, which is planned for licensed
spectrum, may be subsumed by WiMax once it adds mobile capabilities.

What's more, these innovations aren't emerging in a vacuum. Cellular
companies already are rolling out technology that will let their
customers
get speedy Net connections on their mobile phones or laptops. This
third-generation, or 3G, gear will compete directly with WiMax and
Mobile-Fi. Verizon Wireless installed its 3G networks in Washington,
D.C.,
and San Diego last year, and it plans to add 98 more markets by the end
of
2005. Other cellular companies are providing similar service in the
U.S.,
Europe, and Asia. The 3G technology may be slower than WiMax, but it has
the
benefit of being reliable -- and available. "WiMax, all of a sudden, has
caught a lot of attention, but we have been commercial for two years,"
says
John Hambidge, senior director of marketing at IPWireless Inc., which
makes
3G equipment. "We have a huge time-to-market advantage."

Even if WiMax and its brethren can compete with 3G, another challenge
looms:
a spectrum shortage. As all these devices begin chattering away over the
same radio frequencies, they may begin to bump into each other. To avoid
such a shortage, Intel (INTC ), Microsoft (MSFT ), and other tech
companies
are lobbying the Federal Communications Commission for more spectrum.
Their
target? The major TV broadcasters, including ABC (DIS ), NBC (GE ), and
CBS
(VIA ), which are sitting on vast amounts of spectrum for transmitting
TV
programs. The FCC long has supported the development of technologies for
unlicensed spectrum, but it's unclear whether the commission wants to
take
on the powerful broadcasters, especially in an election year. "The
broadcasters hate it, but as demand just keeps going up, it gets harder
and
harder to defend policies that are restricting supply," says Michael
Calabrese, program director at the New America Foundation, a public
policy
institute in Washington that advocates providing more spectrum for these
new
technologies. "Over the long haul, I am optimistic."

AUTOMATION ACCELERATION

One reason for such optimism is that these technologies offer benefits
that
could ripple through the economy. The wireless Internet promises to spur
productivity by collecting data that could never be tracked before and
by
making information available exactly when it's needed. It will speed
automation, allowing people stuck behind, say, a cash register to do
more
productive work. Already, J.C. Penney salespeople use Wi-Fi to check
inventory and prices. Now the technology is moving into construction,
rescue
services, health care, and other markets. Combined, these technologies
are
expected to reach $17.3 billion in sales by 2007, up from $3.3 billion
in
2003. "The next wave of personal productivity at work is about mobility,
people wanting to get access anywhere," says Sean M. Maloney, executive
vice-president and general manager of Intel's communications group.

There are early signs of interest in the new technologies. Andover
Controls
Corp. (BBY ), which has 100,000 building-control systems installed
worldwide, is working with Goodman Manufacturing Co. to cut energy
consumption an expected 10% with ZigBee sensors. In a test that's just
being
rolled out, Andover has installed four matchbox-size sensors in about 25
hotel rooms in Texas. One sensor is placed on the air conditioner, while
the
others are placed on the walls to monitor motion and temperature in the
room. The sensors track whether the air conditioner is on, if someone is
in
the room, and the temperature. The data moves through the bucket brigade
of
sensors to the front desk, which monitors the temperature and the
equipment.
A clerk, or even a computer, can shut off an air conditioner if one room
is
getting too cold. Andover expects the system to be more energy efficient
than relying on customers to fiddle with the controls.

The federal government's plans for ZigBee are more ambitious. The Energy
Dept. has hired Honeywell International Inc. (HON ) to use ZigBee
sensors to
help cut energy costs by up to 15% in steel, aluminum, and six other
industries. In tests that start later this year, the sensors will be
installed at companies such as Alcoa (AA ), Dow Chemical (DOW ), and
ExxonMobil (XOM ) to track energy loss from piping systems and to
monitor
the use of gases in production processes. These processes use large
amounts
of heat and energy to transform gases, such as hydrocarbons, into
ethylene,
which is used to make plastics. Honeywell's network of sensors will be
able
to monitor the amount of gas constantly, compared with as little as once
a
day in the past. That will let companies eliminate leaks or waste almost
immediately. Honeywell estimates the wireless technology could help save
up
to 256 trillion Btu of energy a year, more than the amount of natural
gas
used by Washington State last year. "Having this data in real time is a
big
deal," says Dan Sheflin, vice-president and chief technology officer of
Honeywell's Automation & Control Solutions Div.

As research continues, the sensors will become smaller and more
versatile.
Eventually, they are expected to shrink to the size of dust particles.
Thousands of minute sensors, or "smart dust," could be released into the
atmosphere to check for everything from chemical weapons to changes in
the
weather. "We're going to make this happen and drive costs so that people
don't think twice about using this anymore," says Venkat Bahl,
vice-president of marketing at ZigBee sensor maker Ember Corp. in Boston
and
vice-chairman of the ZigBee Alliance, which shepherded the technology
along.

As they become woven together, these technologies will create a
foundation
for other innovations. Over time, cell phones and laptops will be able
to
switch from one type of network to another, jumping from Wi-Fi to WiMax
to
traditional phone networks. Cell-phone makers including Nokia (NOK ), LG
Electronics, and Samsung are adding Wi-Fi to their phones this year.
These
interconnected networks also will provide the basis for new services.
For
example, an electric utility could offer discounts to customers who
agree to
have their electricity usage monitored by ZigBee sensors and then
reduced
during periods of peak demand.

Already, pioneering universities and businesses are beginning to send
telephone calls over Wi-Fi. Dartmouth College last fall began rolling
out
Internet phone service over the university's Wi-Fi network, allowing
students to make free domestic calls from anywhere around campus with a
laptop or handheld computer. Instead of spending $1.3 million on
traditional
phone gear, Brad Noblet, director of computing technical services at the
school, dished out only $350,000 for networking gear and software for
the
students. Now, Noblet and his band of techies are testing wireless
video,
with the goal of offering cable-TV programming over Wi-Fi. The
university
plans to charge for cable television, but it would save money because it
would not have to maintain three different networks, for cable,
telephone,
and Net service. "The technology is a lot more flexible [than
traditional
equipment]," he says.

After its success with Wi-Fi, Intel is trying to accomplish the same
trick
with WiMax. When they hit the market at the end of this year, WiMax
modems
likely will cost around $450 each, estimates researcher ABI Research.
That's
much more than the cost of a broadband modem or 3G phone card, which are
$50
and $200, respectively. But WiMax is expected to hit speeds of 5 to 10
megabits per second, trumping 3G's 300 to 500 kilobits per second and
the 3
megabits per second that traditional broadband delivers. Intel, Siemens
(SI ), Alcatel (ALA ), and Motorola (MOT ), which all recently announced
they would make WiMax gear, are betting they can spur demand and quickly
drive down modem prices. Intel plans to have embedded WiMax chips in
laptops
by 2006.

There are early signs of demand for WiMax gear. The technology is being
tested by AT&T, as well as by BT. Doug Keeney, chief executive of U.S.
Wireless Online Inc. (UWRL ), which provides wireless broadband service
in
Atlanta, Louisville, and Columbus, Ohio, plans to spend about $250,000
on
WiMax gear when he rolls it out in Louisville this year. That's about
50%
less than it cost him to build metropolitan Wi-Fi networks in other
cities.
He's betting that, within a year or so, the price of the modems will
drop to
$100. That will help him lower his subscription price for consumers from
$29.95 to $19.95. "This will let us increase our market coverage and
connections and make us more competitive," Keeney says.

WiMax has sparked interest at the local level, too. Portland State
University in Oregon and the Oregon Health & Science University two
months
ago began deploying a network that combines WiMax and Wi-Fi gear. Four
WiMax
radios are being placed on rooftops to provide broadband wireless access
to
laptops within reach and to other Wi-Fi relay antennas dotted around the
city. The equipment, which can handle voice and video, will be tested
for
six months by the university and the local fire department. Then the
goal is
to make the network available to anybody in town who wants to use it.
"This
will allow the fingers of the network to spread out in an affordable
way,"
says Nigel Ballard, who is helping deploy this new network after rolling
out
120 free Wi-Fi hot spots in Portland.

Big dreams? Sure, but that's the kind of thinking that's beginning to
take
hold with the development of WiMax, ZigBee, and the other up-and-coming
wireless technologies. These airwaves are open to all.

By Heather Green
With Roger O. Crockett in Chicago,
Steve Rosenbush in New York, and
Catherine Yang in Washington

http://businessweek.com/magazine/content/04_17/b3880601.htm

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