FCC - Renewed Hope, cont wimax

4) Tom Evslin made a great point in one of his articles - No More Landlines. It's not that there's no inherent future or utility in Plain Old Telephone Service (POTS). It's just that the wireline (and wireless) telephony carriers have this sense of entitlement after over a century of a guaranteed rate of return and the ability to hold customers hostage. But increasingly, the math doesn't work with more and more people abandoning landlines in favor of wireless telephones, leaving telephony infrastructure idling. The telephony carriers want to continue to be compensated for their "stranded" investments, but the only way to do that is to soak the remaining customers even more, and a vicious cycle was started years ago with the price of landline service rising, and customers saying "at this price, I really don't need this".

The trouble is... the infrastructure that businesses rely on - T-1 lines, are largely paid for out of revenues by the customers that are abandoning landlines. So, the FCC has a hell of a mess on its hands dealing with the inevitable transition to wireline infrastructure that isn't supported by voice revenues.

5) I'll take Evslin's observation one step further to make the same observation that a lot of customers are going to make the same calculation with cable television services... for the same $50/month or so that they're paying for cable, they can "rent" Netflix on-demand movies, rent television episodes from iTunes, watch free downloadable content from YouTube or the networks, etc. The cable companies are going to find their infrastructure investments largely stranded as people abandon video services and voice services in favor of broadband-only. Expect the cable television industry to come crying to the FCC about "customer abandonment" issues right behind the wireline telephony companies.

6) The US Government wants a national, interoperable, two way radio system that will integrate local, state, federal, all manner of public safety agencies. That's easily done:

Buy Nextel - there's the US terrestrial network.
Buy Iridium - there's the US extended-area / worldwide network.
Buy the iDen and Iridium intellectual property (both from Motorola?) and "open source" it for the purpose of incentivizing other vendors to make access devices to US Government requirements.
Sunset all the commercial users.
After the sunset, operate Nextel and Iridium's networks as federally-operated public safety communications systems and very selectively grant access to commercial users that have a good reason to be on them - Red Cross, Salvation Army, tugboat companies, etc. Add an encryption system with a smart card that has to receive an authorizion signal every so often so that stolen / compromised devices are "aged out" of the system. Both systems already have this, but it's probably not that robust and is designed around the requirements of "creating billable events" - the Government's requirements are a bit different.
Invest the money that you would have spend building yet another two-way radio and satellite communications system into hardening, improving the coverage, improving the reliability, growing the user base, etc.
Do the math and the timeline, FCC. There is no conceivable way the nationwide emergency network the US Goverment wants and needs is going to happen "organically", "incentivized", partnerized, etc. If you do it the way currently envisioned, it will take decades, cost tens of $Billions, and at best will be loosely coupled and never in sync between factions because they're sections of the network are being built piecemeal. Over time, migrate it to P25 standards if that's desired... but it's arguable that P25 scales to nationwide, and Nextel's already figured out how to do that with iDen.

Nextel and Iridium aren't broadband-capable, and can't really evolve to be. If you want / need that, pay Clearwire to put up Mobile WiMAX gear in parallel with developing their network, but the government gear is on a government-only band. Or the government could just buy back all the 2.3 GHz licenses.

To be continued.

By Steve Stroh