RHIT Michael Powell, head of the FCC, is on the verge of relaxing or abandoning the UNE-P rules. These rules have required the local exchange telephone carriers who own residential and business final mile circuits to lease them at wholesale rates to competitors, the so-called 'CLECs' - competitive local exchange carriers. This change is rumored to be the result of political skullduggery by the incumbent telcos (ILECs), and has been muchly bemoaned - particularly among the digerati.

While it is certainly perverse policy to reward ILECs for deliberately dragging their feet in opening their plant, the last few years have shown that repackaging copper loop as broadband circuits is a marginal business proposition at best. There is very little capital now available to support further expansion in that direction.

Putting a stake through the heart of the CLEC business will unleash its entrepreneurial fervor and the customer demand to find another way to meet. With the cable infrastructure largely in the hands of another set of over-leveraged oligopolists, that meeting will happen over wireless. The WiFi juggernaut clearly shows the potential to apply the full power of open standards and Moore's Law to the creative destruction of obsolete infrastructure. Whether the wireless circuit standard-bearer is 802.16a, a rejiggered WiFi, or a successor, the course is now set.

Message to incumbents? Be careful what you wish for.

Message to insurgents? This isn't the most important fight. On open spectrum, give not an inch.
4:03:33 PM    

We knew the 802.11 wave was coming. In this new year, it's starting to look like one of the monsters out at Maverick's. Here's some of the accumulating evidence and analysis:

The old HomeRF alliance just closed up shop and shut down its website. In its heydey HomeRF had the backing of a consortium including Intel; now one with the dodo, done in by WiFi.

In the realm of consequences, two pieces examining the impact of incumbent wireless carriers appeared this week, both by analysts I highly respect.

First, Bill Gurley of Benchmark Capital in his 'Above the Crowd' newsletter compares WiFi versus carrier wireless to the PC vs. mainframe struggle:

The first obvious similarity between the rise of 802.11 and that of the personal computer is the commitment of an entire industry to a single open-standard architecture.

So is 802.11 complimentary to cellular? Perhaps it is complimentary in the way that chips and salsa are complimentary to a Mexican entrÈe. They are not directly the same, but if you eat a ton of chips when you first sit down, you just aren't as hungry for the Chile Relleno later. Prior to the emergence of WiFi, there were thousands and thousands of presentations given on why data services over cellular networks made sense. In those presentations, executives described scenarios and locations where users would interact with these valuable services. The problem is that the primary locations in these historic scenarios are the exact same locations where 802.11 hotspots are already deployed today (airports, hotels, coffee shops). 802.11 has stolen the heart of the market, leaving high speed cellular data services to fill the niche that Satellite phones fill in the voice market.

(I've found no archive site for ATC, but you can sign up for the newsletter here and maybe you'll get this issue. Mailings are infrequent but always pithy.)

The second WiFi piece comes from Clay Shirky, another analyst worth bookmarking. He points out that 802.11 puts carriers in the position of competing with their customers' infrastructure, a dubious proposition at best.

If you think these arguments hold water - and I do - then the wave is about to hit carriers just at the time they are faced with the capital expenses of transition to 2.5 and 3G.

More on other consequences of the big wave to follow...
1:04:04 PM