[eccr] The Economist: Launching Telecoms II

Title: The Economist: Launching Telecoms II

TECHNOLOGY QUARTERLY

OPINION

Launching Telecoms II

Mar 13th 2003 
>>From The Economist print edition

New wireless technologies that render bandwidth irrelevant could kick-start a revolution in communications bigger than the internet

AMERICA recently had a chance to kick-start a whole new engine of technological innovation‹with business opportunities that could have dwarfed those generated by the internet a decade ago. Through political infighting, it muffed it. By voting in effect to maintain the status quo, rather than embark on reforms aimed ultimately at dismantling the country's antiquated regulations that govern the telephone network, the Federal Communications Commission has consigned the telecoms industry to further floundering.

Call the missed opportunity ³Telecoms II². Unlike its predecessor, this is all about freeing people from having to plug into telephone lines and cables‹and letting them have speedier data connections than they ever imagined. It all started with digital cell phones a decade ago, but has now exploded into a panoply of radio technologies‹from wireless LANs (local area networks) to smart antennae, ultrawide band transmission and mesh networks. Despite the parlous state of the telecoms sector, the pace at which start-ups offering the new WLL (wireless local loop) technology have been raising money shows that at least the market has faith in the future. Apart from providing an alternative over the ³last mile² to homes and offices at modest cost, WLL delivers internet access ten times faster than the speediest broadband connections the telephone companies or cable TV firms can offer (see article).



What could make Telecoms II the economic engine of the next decade is the way such networks are largely ³user financed² and deployed in an unplanned, ad hoc manner‹and thus free to grow exponentially if demand for them takes off. David Reed, a telecoms expert who helped design the internet, points to how, over the past year, the 802.11b (³Wi-Fi²) standard has created an entirely new market for wireless networks in the home and office‹without any form of government initiative and during the depth of telecom's worst recession. That is what can be done when manufacturers and users are set free to exploit just a tiny unlicensed chunk of the radio spectrum. But to make Telecoms II happen in a big way, regulators have to stop policing the radio spectrum as if it were some precious, scarce resource.

The problem is that the regulations governing the separation of broadcasting channels, to prevent neighbouring stations from interfering with one another, were established 70 years ago and reflect the technical limitations of the time. Today, instead of being a crude tunable circuit built of coils and condensers, a radio is more likely to be a piece of software burned into a DSP (digital signal processor) chip that can reconfigure itself on the fly‹hopping from channel to channel, thousands of times a second, while seeking gaps through which to send bursts of data. With frequency-hopping ³softradio², interference is irrelevant.

That means broadcasting channels can be crammed cheek by jowl, with no buffer zones between them. Also, when such adaptive digital radios are allowed to co-operate with one another, the network's capacity can actually increase‹rather than decrease, as was long believed‹with every new radio added. In short, with ³co-operative gain², there is no upper limit to the amount of information that can be transported. Thus, bandwidth‹as a measure of communication capacity‹is also irrelevant.

Forget interference

Before such disruptive ideas can be used to unleash the next big wave of technological innovation, regulators have to rid themselves of obsolete notions about interference. Because of such fears, ³repeater stations²‹the key to co-operative gain‹have been largely barred from wireless networks. Another regulatory hangup is the way networks operating on different frequency bands‹say, Wi-Fi and mobile phones‹have been prevented from interconnecting.

But the biggest problem inhibiting Telecoms II is the habit of reserving various radio bands for specific services. Historically, that made sense when it was hugely expensive to build radios that could be tuned to more than a few adjacent bands. Today, digital radios that can dynamically jump all over the spectrum are to be had for the price of a microchip. 

America has missed its chance to start the deregulatory ball rolling, first with the wired networks and then with the wireless ones. Now it is up to Asia and Europe to avoid making the same mistake.

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