Tuesday, October 27, 2009

Unlicensed Wireless :: Open Source

Unlicensed is to the cellular business as open source was to the software industry.

Wireless companies are clamoring for "more spectrum", that is, new radio operating licenses that will allow them to satisfy the exploding demand for data capacity (think video streaming to an iPhone).  New licenses are a cheaper way to increase capacity than the alternative: building additional cell towers.

The cellular companies have traditionally been opposed to unlicensed radio allocations (like the one that allows Wi-Fi networks) because they saw them as a substitute for licensed: the more unlicensed, the less licensed allocations; and less licensed meant higher prices at auction.

However, at least some of them seem to be realizing that unlicensed can help them off-load traffic from their licensed networks.  A video stream that arrives on a phone in a coffee shop via a wired connection to the shop and a Wi-Fi link to the device has not crossed the licensed cellular network, freeing up cellular capacity.

Unlicensed is therefore a complement to licensed - just as open source can complement rather than substitute for proprietary software. Even Microsoft now offers some software under open source-like licenses.

Just as with software, one should expect kicking and screaming in the cellular industry, and variation in the degree of acceptance of unlicensed depending on business model and other assets. IBM is a big supporter of open source because it makes money on services rather than software licenses; T-Mobile is more open to unlicensed than Verizon because it has fewer licenses.

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