The Quiet Expansion of Wi-Fi Networks

Wi-Fi

Wi-Fi (Photo credit: kristinmarshall)

I am sure I am like most business travelers and one of the first things I look for when I get to a new place is a WiFi connection for both my laptop and cellphone. Finding WiFi lets me get online with the computer and stops me from racking up data charges on my cell plan.

And for the longest time there has been very little public WiFi outside of Starbucks and hotels. But that is starting to change, at least in some places. There are several companies that have quietly been pursuing w WiFi deployments.

The biggest of these is the cable companies. It’s hard to get accurate counts of how many hot spots they have deployed. In 2012 a consortium of cable companies  – Comcast, Cox, Time Warner, Bright House and Optimum – banded together as the Cable WiFi consortium to deploy hotspots. Comcast claims that the industry has deployed over 300,000 hot spots. However, the Cable WiFi web site claims over 200,000. But whatever the number this is far larger than anybody else.

The Cable WiFi networks are offered to the customers of those companies as a mobile data extension of their service. Today these hotspots are centered around big cities – the northeastern corridor, San Francisco, Chicago, Los Angeles, Tampa, Austin and others.

The next biggest provider is AT&T which claims about 30,000 hot spots. AT&T claims over 705 million WiFi connections onto its WiFi network in the fourth quarter of 2012. However, Google has announced that it is getting in the game and nobody knows how big they might get with this effort. But their first announcement is that they are taking over all of the hotspots at Starbucks Coffee (which is a lot of the AT&T hotspots).

The cable companies have been deploying the hotspots in several ways. In some communities they are installing them on utility poles. In other situations they are going into establishments similar to the Starbucks WiFi.

WiFi is becoming more and more important to people’s daily life, so this trend is going to be very popular. Cellphone plans are getting stingier and stingier with cellular data at the same time that cell phones and tablets have the ability to use more and more data. If that data is not offloaded onto WiFi networks then customers are facing some gigantic cellphone bills.

WiFi is never going to be a replacement of cellular. For example, the technology used and the spectrum used make it very difficult to do dynamic handoffs like happens with your cell phone. You can literally walk out of WiFi coverage on foot where cellular coverage will stick with you driving at speeds of 60 miles per hour.

But people are finding more and more uses for WiFi all of the time, and so the desire for public WiFi is probably going to explode. The cable companies report that every time they open a new hot spot that usage explodes soon after people figure out it is available. One area where they have seen the biggest use is at the Jersey shore where vacationers and visitors are relieved to find WiFi available.

Anybody building a fiber network ought to consider a wireless deployment. There are several ways to monetize the investment. The obvious revenue from WiFi is through daily, weekly and monthly usage fees. But if you are a triple play provider, a more subtle benefit of wireless is in making your customers stickier since you are giving them a mobile component of their data service. Another revenue stream is to sell prioritized WiFi access to the local municipality, electric company and others, with priority meaning that their employees get a prioritized access to the network, with first responders trumping everybody else. There are also smaller revenue streams such as earning commissions on the DNS traffic for people who purchase products over your WiFi network.

Time for a New Spectrum Plan

The spectrum in this country is a mess. And this is not necessarily a complaint against the FCC because much of the mess was not foreseeable. But the FCC has contributed at least some to the mess and if we are going to be able to march into the future we need to start from scratch and come up with a new plan.

Why is this needed? It’s from the sheer volume of devices and uses that we see coming for wireless spectrum. The spectrum that the wireless carriers are using today is already inadequate for the data that they are selling to customers. The cellular companies are only making it because a large percentage of the wireless data is being handed off to WiFi today. But what happens when Wifi gets too busy or if there are just too many devices?

As of early 2013 there were over half a billion internet connected devices in the US. This is something that ISPs can count, so we know that is fairly accurate. And the number of devices being connected is growing really quickly. We are not device nuts in my house and our usage is pretty normal. And we have a PC, a laptop, a tablet, a reader and two cell phones connected to wireless. And I am contemplating adding the TV and putting in a new burglar alarm system which would easily double our devices overnight.

A huge number of devices are counting on WiFi to work adequately to handle everything that is needed. But we are headed for a time when WiFi is going to be higher power and capable of carrying a lot more data, and with that comes the risk that the WiFi waves will get saturated in urban and suburban environments. If every home has a gigabit router running full blast a lot of the bandwidth is going to get cancelled out by interference.

What everybody seems to forget, and which has already been seen in the past with other public spectrum, is that every frequency has physical limits. And our giant conversion to the Internet of Things will come to a screeching halt if we ask more of the existing spectrum than it can physically handle.

So let’s jump back to the FCC and the way it has handled spectrum. Nobody saw the upcoming boom in wireless data two decades ago. Three decades ago the smartest experts in the country were still predicting that cell phones would be a market failure. But for the last decade we have known what was coming – and the use is wireless devices is coming faster than anybody expected, due in part to the success of smartphones. But we are on the edge of the Internet of Things needing gigantic bandwidth which will make cell phone data usage look tiny.

One thing the FCC has done that hurts the way we use the data is to chop almost every usable spectrum into a number of small channels. There are advantages to this in that different users can grab different discrete channels without interfering with other users, but the downside to small channels is that any given channel doesn’t carry much data. So one thing we need is some usable spectrum with broader channels.

The other way we can get out of the spectrum pinch is to reallocate more spectrum to wireless data and then let devices roam over a large range of spectrum. With software defined radios we now have chips that are capable of using a wide variety of spectrum and can change on the fly. So a smart way to move into the future is to widen the spectrum available to our wireless devices. If one spectrum is busy in a given local area the radios can find something else that will work.

Anybody who has ever visited a football stadium knows what it’s like when spectrum gets full. Practically nobody can get a connection and everybody is frustrated. If we are not careful, every downtown and suburban housing area is going to look like a stadium in terms of frequency usage, and nobody is going to be happy. We need to fix the spectrum mess and have a plan for a transition before we get to that condition. And it’s going to be here a lot sooner than anybody hopes.

New and Better WiFi

Wi-Fi Signal logo

Wi-Fi Signal logo (Photo credit: Wikipedia)

There are two new standards for WiFi that will be hitting the market in the next few years. The standards are 802.11ac and 802.11ad. The two new standards use different spectrum with 802.11ac at 5 GHz and 802.11ad at 60 GHz. Both new Wifi standards will be able to deliver up to 7 gigabits per second, compared to today’s WiFi that tops out at 600 megabits per second.

Looking at basic spectrum characteristics there are four major differences in the way these two standards will use the spectrum:  bandwidth available, propagation characteristics, antenna size and interference.

The maximum data speed that can be delivered by any radio spectrum is limited by the amount of spectrum used and the signal-to-noise ratio. This limit is defined by the Shannon-Hartley Theorem. The 802.11ac at 5 GHz can use about 0.55 GHz of spectrum. The 802.11ad at 60 GHz can use up to 7 GHz. 802.11ac has channels that are 160 MHz wide while 802.11 will have channels that are 2,160 MHz wide. But the channels in 802.11ac can be bonded which will allow it to deliver almost as much bandwidth as 802.11ad.

802.11ac will use the same 5 GHz spectrum that is used by today’s Wifi and will have similar propagation characteristics. But the 802.11ad spectrum at 60 GHz will not travel through bricks, wood or paint and thus this technology will be most useful as an in-room technology.

For these spectrums to achieve full potential they need to be able to transmit multiple signals, meaning that they need multiple antennas. Antenna size is proportional to the wavelength being transmitted. A 5 GHz antenna has to be about an inch long and spaced at least an inch apart to be effective. But 60 GHz antennae only need to be 1/10 inch long and apart. This is going to make it easier to put 802.11ad into handsets or into any small device.

Finally is the issue of interference. There is already a lot of usage in the 5 GHz band today. In addition to being used for WiFi the spectrum is used for weather Doppler radar. There are also a few other channels in the band that have been allowed for other uses. And so 802.11ac will have to work around the other uses in the spectrum. The 60 GHz spectrum range is mostly bare today, and since this will go such short distances there should be very few cases of interference. However, multiple 801.11d devices in the same room will interfere with each other to some extent.

The 80211.ac standard is pretty much set but won’t be fully certified until 2014. However, there are already devices being shipped that include some of the features of the standard. For example, it’s included in the Samsung Galaxy S4 and MacBooks. But today’s version uses beamforming to send the signal to one device at a time. Beamforming means that the signal is sent to one device from each separate antenna in an array, but at slightly different times.

Still to come is the best feature of 80211.ac, which is to support separate sessions with different devices, different priorities and different power needs. This feature is called multi-user MIMO and it will revolutionize the way that WiFi is used. For example, you will be able to make a WiFi voice call while simultaneously downloading a video from another device. Your WiFi chip will determine the location of each device you will be talking to and will initiate a prioritized session with each. In this example it can give priority to the voice call.

The fully deployed 80211.ac will be the first generation wireless that is getting ready for the Internet of Things. It will be able to communicate with multiple devices in the environment at the same time. It will turn smartphones and tablets into workhorses able to gather data from sensors in the environment.

802.11ad is going to be far more limited due to its inability to pass through barriers. The most likely use for the spectrum will be to create very high-speed wireless data paths between devices, such as connecting a PC or laptop to a wireless network. It should be able to achieve speeds approaching 7 Gbps with only one device and one path in play.

One would expect by 2016 or 2017 for devices using these two technologies will become widespread. Certain in the telecom industry an upgrade to 802.11ac will allow carriers to deliver more bandwidth around a home or office and be able to handle multiple sessions with wireless devices. This new technology is a fork-lift upgrade and is not backwards compatible with earlier WiFi devices. This means it will take some time to break into the environment since all of the local wireless devices will need to be upgraded to the new standard. One would expect first generation 802.11ac routers to still include 802.11n capabilities.

Should you Build a WiFi Network?

Free Wireless (WiFi) Minneapolis Hotspot in Su...

Free Wireless (WiFi) Minneapolis Hotspot in Sumner Field (Photo credit: Wikipedia)

For years I have had clients who have been building WiFi networks and then trying to figure out ways to make money with them. For the first time I think there is now enough opportunity to sufficiently monetize a WiFi network to make it look like a good investment. The following are some of the ways that other carriers are making money from WiFi. A good business plan will probably need to combine several of these together to make a viable business.

Cellular Data Upload. The biggest use of WiFi is becoming the uploading of cellular data to the network. Most cellular carriers sell data plans with low caps and they want and expect their customers to use WiFi to keep data traffic off the cellular networks. In most places the cellular networks are not nearly robust enough to handle all of the data they would need to carry if it wasn’t for WiFi. There are two different possible ways to monetize this.

If your service area has enough customers of one or more of the major cellular companies, the carriers might be interested in buying wholesale access into your WiFi network. This is something that is happening in big cities, and in many places the cellular carriers are deploying the WiFi directly. But there are now a number of markets where cellular carriers are buying bulk WiFi access from other carriers.

However, deals with cellular carriers are not yet something that has been commoditized, and the alternate plan is to sell data plans directly to cellular customers in your town for their smart phones. Many cellular customers already have WiFi in their homes, but with a city-wide WiFi network they could then get the WiFi benefits anywhere in town. Statistics say that 85% of cellular data is used in the home territory and you can sell data for less than the cellular carriers and make good money at it.

MVNO Wireless. Even better than selling cellular data to others is consider offering your own wireless plans using an MVNO. In this scenario you buy bulk cellular minutes, text messaging and cellular data and then package them your own cellular plans. If you have a city-wide WiFi network you have a big advantage because you can make sure that your cellular customers use your network for both voice and data when that is possible. This means that you can charge them cellular-level pricing for traffic that you are delivering at landline costs. The margins on MVNO wireless are already decent, but combining it with a robust WiFi network really enhances the bottom line.

Broadband Alternative. There are now a significant number of customers who don’t want traditional broadband delivered by wireline. In addition to smartphone users, there are many customers who now use pads and laptops instead of traditional PCs. So you can sell WiFi business plans as an alternative or as an adjunct to your existing data plans. WiFi-only plans can be priced similarly to traditional low-level landline plans and you might sell a ‘portability’ additive plan to your normal landline data customers. Finally, you can sell hourly, daily and weekly WiFi to visitors or occasional users.

VoIP / Local Only Phone. In every market there are customers who almost never leave town and with a WiFi network you can give them a much lower cost portable phone alternative than using a traditional cellphone carrier. This essentially is a cordless phone that will go anywhere in the town. You also can use WiFi to give local phones to kids and others for low prices, saving parents the cost of pricey cellular family plans.

Public Safety. Most towns and cities would be interested in using your network for public safety and public works. With a citywide WiFi network you can give all city employees access to data anywhere in town, making it easier for police and fire to operate using pads but also improving the productivity for inspectors and other city workers who are mobile in the town. You should be able to sell bulk access to the city and local utilities, particularly if you will arrange a QOS arrangement to give public safety a priority for the network when they need it.

Workforce Needs. And of course, a city-wide WiFi network will also increase your own productivity since your own installers and salespeople can always be connected to the network with a pad or smartphone. This is not a revenue opportunity but rather can save you money.

There certainly some issues to consider and it would make sense to pre-sell to the larger WiFi users before you build the network. But if you can sign up a cellular carrier or the City government as anchor tenants then you can build knowing that these other revenues will materialize if the network is built with good coverage.

Like any business there are operational issues to consider. For instance you will want to insure that only people who are paying for your service use the network so you will want a secure system to validate users and be prepared to boot off customers who give away passwords to others.

From a technical and cost perspective it has never been easier to get into the WiFi business. The price of equipment has dropped and it has become more science and less art to keep the network functioning well.