Fixed Wireless Business

That Old Time Internet Religion — continued

[July 8, 2004]

The disintermediation of TV
Stroh says, instead, that the ISPs will take video customers from cable. "I think people will buy a TiVO (or its equivalent, and there will be more open source and generic PVRs). The fact is that video can come off the Internet. You're watching what you want, not what's offered to you, and you're watching it when you want to."

He says this is exactly what people want, and they're not getting it. "There's that old joke about having 500 channels, and there's nothing on. I'd like to watch back episodes of Junkyard Wars or Babylon Five. Imagine hours and hours and hours of content that you want to watch that's on your hard drive waiting for you! For many, that's heaven."

Stroh says that those ISPs that understand the business are not involved in services at all (ISP-Planet has always urged ISPs to investigate value-added services in order to increase average revenue per user (ARPU) and thus profitability, but Stroh provides an intriguing counter argument).

The stupid network
"If you're clueful, you're just in bit transport. You're not in e-mail, and you're not in webhosting. It's all laid out clearly in David Isenberg's essay The Rise of the Stupid Network."

Isenberg's manifesto said in part that the phone company network was designed to empower the phone company, by ensuring that the phone company was tied to no single vendor, and to disempower the customer, by creating resource scarcity. Applications running on the phone company network had to be designed according to phone company specifications.

The Internet is the opposite. It empowers the end user. Services are designed by anyone, and cannot be controlled, limited, or mandated by the ISP (see, for example, the RIAA's attempt to control file sharing). The stupid network (i.e., general purpose and programmable) beats the smart network (i.e. built for a specific purpose) every time.

Stroh's take on this is that wireless is the best form of IP. "My theme all along has been that wireless is the better way to do Internet. It's competitive (both cheaper and easier). Even though that copper has been paid off many times, wireless ISPs say, 'so what! We can compete!'"

This is the future Stroh envisions: "little wireless ISPs will pop up all over the place like mushrooms."

Will RF innovation occur?
Stroh sounds one note of caution. In his three years of coverage (his newsletter, FOCUS on Broadband Wireless Internet Access, will be three years old in June), he says that innovation on the physical aspects of RF has been relatively slow. "For example, phased arrays, the technology of adding antennas to broadband wireless systems, I thought was a natural. It hugely increases capacity by making the antenna work better without changing the radio. When I ask vendors about this, they say, 'we're selling our stuff, no problem. What you're describing is a solution in search of a problem.'"

He notes that some companies, such as ArrayComm and Iospan Wireless (which is no longer around) have tried this, and ArrayComm may yet get it right and pay more attention to the WISPs, who might buy their stuff, than to the cell phone companies, who do not seem to be interested.

(ISP-Planet talked to ArrayComm several years ago. Using multiple radios, they claim to be able to send to and receive from clients in individual cubic blocks of space, vastly reducing interference and increasing the number of simultaneous users each AP can serve.)

Stroh concludes with a prescient remark. We're talking on June 24th. Stroh says, "Metricom. In my wildest imagination, I did not imagine that Metricom would not get any takers all. It's low speed wireless, and it's a good idea. The Ricochet service really works. But I did not factor in the depth of the downturn. Any venture fund that wanted to could not touch a wireless company."

On June 30th, YDI announces that it has bought Ricochet for $3 million in cash, 42,105 shares of common stock of YDI, and an unsecured note for $300,000 payable over three years.

The future starts now
It's all about the services that are now free of the network, because the network is stupid, not smart. "I did a reality check with my dad, who's about the most technophobic guy I know," says Stroh. "He says, 'I can use a remote and I know how to use a phone.'"

"If he can still buy his cordless phone at Wal-Mart and watch video from a remote, the fact that his connection is IP over wireless, and the video is on a hard disk doesn't matter. He doesn't care."

Stroh sees an announcement by the Starz network that its content is available, in partnership with Real Networks, over broadband, as the beginning of the future.

The big companies don't think they have to deploy broadband. But, Stroh says, "everyone else is sneaking in under their shroud of ignorance. IP is a stupid network, and Isenberg said all of this years ago. The network is a commodity. There's a complete decoupling of service and bandwidth. We don't need broadcasting anymore either."

In the personalcasting age, the individual wins, and the independent ISPs win too.

—End

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