Things just got really interesting in the mobile / wireless world. Verizon announced that they will over two categories of service by the end of 2008. One will continue to be its bundled handset service, and the other will be open to any device. This change brings Verizon Wireless in-line with the open networks that are available in Europe and Asia. The move will force T-Mobile, Sprint, and AT&T to consider offering similar services. (T-Mobile is already experimenting with allows users to make WiFi calls.) This announcement also may affect the upcoming 700MHz spectrum auction, as the FCC did not require open networks. I’m hoping that it will spur more innovation in the mobile space. Changes could happen quickly, we’ll have to wait and find out. I’m trying to stay optimistic.

Update: Techcrunch and GigaOM weigh in on the issue. A lot can happen in a year, and GigaOM is correct to be skeptical.

Image source: nytimes.com

New York Times reported that Nokia is priming a relaunch of the N-Gage after two failed attempts at providing a portable phone and gaming platform. Following two attempts to market the N-Gage in 2003 and 2004, Nokia pulled the line of devices from Europe and North America in 2005, after lukewarm sales, well below their sales targets. Not giving up, Nokia hired the legendary design firm IDEO, for a user-centric design approach for the next iteration. Now, the new N-Gage will allow people to play games with their friends and strangers, and try-out and purchase games from their phones. They will also know more about the skill levels of the other people they are playing against, so they can find people of similar abilities, which was a user need that was discovered through IDEO research. If the re-launch is successful, the N-Gage could become a textbook example of user need driven product design.

Combining a portable gaming device and a phone seems like a no brainer, but success has still been elusive. Besides Nokia, the other obvious places to look have been slow in making progress as well. Sony presents yet another example of the Japanese giant having a difficult time getting their individual arms to work together, but it looks like they are starting to work it out. After years of rumors, Sony has filed a patent on a mobile gaming platform that will combine the PSP with Sony Ericsson phone technology. Seeing that the patent was only filed in May 31, 2007, seeing a product to market in the US, could take time. However, as unwired review notes, if it can play PSP games, it could have immediate impact.

Putting aside the success of the DS line and the Wii console, Nintendo is still strangely silent, despite filing a similar mobile phone gaming patent way back in 2001.

Of course, Sony, Nokia, and Nintendo will also have to deal with the US carriers, who lean heavily toward restrictions on their ondeck services, as they too want to earn revenue from the mobile gaming market. It’s not clear to me, how the N-Gage will integrate with US mobile carrier services. I’m definitely going to follow up on the agreements that will be made, and how the services will play out. The complexity of the current system definitely makes it even more clear that, the FCC mandate of device and software interoperability for 700 MHz auction was important, even if some people think the FCC compromised too much.

Images source: upgrade:travelbetter.com

With all this Google and spectrum talk swirling the internet and news media, I keep coming back to Wi-Fi as a good way to contextualizing the importance of having open networks and services, as well as open applications and devices. There are of course, many differences which I’ll identify, but the similarities are important and insightful.

Wi-Fi has exploded in the past few years. As with many overnight success stories, this one was twenty-five years in the making. In 1985, FCC opened several bands of high frequency wireless spectrum for unregulated use. This move allowed people to transmit over these frequencies without a license, as you would for radio or television. The spectrum 900MHz, 2.4GHz and 5.8GHz was (in hindsight) amusingly named “garbage bands.” Because they were used by medical equipment and home appliances including microwave ovens, they were considered to have limited telecommunications value.

In 1997, the turning point of Wi-Fi was the adoption of IEEE 802.11 standard by the Institute Electrical and Electronics Engineers, which was nearly ten years in the making. With a standard in place, developers could make devices and applications that were interoperable with each other. Developers chose the 80211b flavor in the first wave of products, because it was least expensive, albeit slow. Faster flavors of the standard, such as 802.11g and 802.11n, are now being developed and brought to market. The early application of 802.11b shows that the agreement on of a standard is just as important as what is agreed upon. As commercial products began rolling out, “Wi-Fi” was settled upon as a term for this new technology, because “IEEE 802.11b compliant” wasn’t as sexy.

Two points to take away from the spread of Wi-Fi concern standards and the open spectrum. First, the adoption of the IEEE 802.11 standard allowed for interoperability. Because products could easily to talk to each other, the chances for wide-spread use increased. Second, providing open spectrum expanded development, because
anyone from the size of Cisco and to the individual members of the Toronto Wireless Users Groups to develop and experiment with Wi-Fi. As well, it vastly expanded its usage by people. (Imagine if everyone who wanted to set up a Wi-Fi network needed to apply and pay for a broadcasting license.)

Wi-Fi will soon face competition from other wireless alternatives, like the results of the 700 MHz auction or WiMax, which is faster and has roughly 100 times wider range. These telecommunications technologies require towers and infrastructure, which have price tags that run in the billions of dollars to implement in the US. Big upfront costs means that big entities are involved like telecoms, industry disruptors like Google or Apple, or governments. Even if the FCC mandated open networks and services (which it did not,) standards and truly fair pricing would remain challenges to seeing levels of innovation and adoption on par with Wi-Fi.

Some good, accessible readings on the topic:
A Brief History of Wi-Fi, Economist, June 10th, 2004. (subscription required)

“How Wi-Fi Works”

Just a quick post on the upcoming 700MHz spectrum. Yesterday, FCC released guidelines on the auction. Google was pressing for 4 points on its policy blog:
* Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
* Open devices: consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
* Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
* Open networks: third parties (like internet service providers) should be able to interconnect at a technically feasible point in a 700 MHz licensee’s wireless network.

FCC is gone along with the first two, which is important because outside developers can innovative as we have seen on the Internet, but less so on mobile phones. However, it appears that the winners of the spectrum will not be forced to keep their services and networks open.

I still getting my head wrapped around that FCC actually said. Google hasn’t say yet if they are going to bid in the auction. But they are more likely now that given the FCC’s guidelines. Along similar lines, even if the FCC implemented open networks and open services in the auction guidelines, openness is ultimately all about execution. Defining and overseeing “nondiscriminatory” pricing is crucial. As seen, in the attempts to open wirelines, the task is tricky and can be gamed. Inflated prices make it economically impossible for third parties to profitably lease pipes and services, similar to the experience of third-party broadband ISPs.

Google says that it is considering to bid in the upcoming auction of 700 MHz spectrum, which will be free when television switches over to a digital in 2009.

It could all just be posturing to get the FCC to keep the pipes open, and allow Goggle the ability to sell access in real time, in a way that is similar to their Adsense model.

Once again, Susan Crawford as a good description of what’s at play.