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

From: [email-masked]
Date: Thu, 22 Apr 2004 00:32:39 -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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