"Free spectrum" could shape future of wireless

For M2Z Networks' John Muleta and Milo Medin, the future of wireless can be found in spectrum long ignored by the titans of the industry

Advanced Wireless Service-3 (AWS-3), which operates in the 2155-2180MHz band, sat around in the FCC closet collecting dust for more than a decade. No one seemed to want it until John Muleta and Milo Medin, co-founders of M2Z Net-works and, respectively, CEO and chairman of the board said something like, "if you're not using it, anyway, we'll take it off your hands."

Perhaps these two gentlemen saw something others didn't.

Prior to M2Z, Muleta headed up the FCC's Wireless Telecommunications Bureau from 2003 to 2005, where he was in charge of implementing the FCC's policies on consumer wireless services and public safety radio networks.

Medin was co-founder and CTO of @Home Networks, one of the first companies to offer nationwide cable modem service. Prior to that, Medin worked at NASA Ames Research Center.

Long-forgotten AWS-3

For reasons that will become obvious, the major wireless service providers have studiously avoided AWS-3.

True, the bandwidth doesn't have a beach-front address, Muleta chuckles, meaning that it is not in the posh 700MHz range that allows signals to go through walls. But what it does have is more than enough to meet FCC requirements for free nationwide broadband delivery. Using its unique technology, M2Z expects to tap AWS-3 for 8 to 10 times more capacity than traditional cellular services deliver. Service speeds would start at 384Kbps download and 128Kbps upload -- about the same as low-end DSL.

As is the case in all stories, there are upsides and downsides to M2Z's AWS-3 aspirations.

The good news is that licensing for AWS-3 is contingent on service being free. Per FCC documentation:

Require the licensee to provide free, two-way broadband Internet service including:

-- engineered data rates of at least 768 kbps downstream using up to 25 percent of the licensee's wireless network capacity.

- an "always on" network-based filtering mechanism.

Require the licensee to provide for open devices and open applications for its premium service and open devices for its free service

By the way, this service must also be porn-free, again per the FCC:

(a) The licensee of the 2155-2188 MH band (AWS-3 licensee) must provide as part of its free broadband service a network-based mechanism:

(1) That filters or blocks images and text that constitute obscenity or pornography and, in context, as measured by contemporary community standards and existing law, any images or text that otherwise would be harmful to teens and adolescents. For purposes of this rule, teens and adolescents are children 5 through 17 years of age;

Muleta tells me that M2Z will block porn based on domain names, using network technology.

Under the FCC's specifications, the AWS-3 spectrum provider will also be able to offer a fee-based service. Thus, if your company is willing to pay about $25 per month for a wireless card, as opposed to about $40 to $90 per month from the current major wireless providers, you can have 3Mbps service. Also, if you're paying for better performance then, the service is unblocked.

AWS-3's threat to the wireless status quo

Now for the bad news: Major wireless broadband providers are fighting hard to keep AWS-3 off the market. Having paid a lot of money for AWS-1 bandwidth at auction, current wireless providers T-Mobile, Sprint, and AT&T don't seem too keen on the idea of someone else giving away similar bandwidth for free.

Their first tactic was to say that AWS-3 interferes with AWS-1, which operates in the 2,110-2,155MHz range. Last week, the FCC announced test results that found no interference between the bands (PDF).

Not only has this spectrum remained fallow for 16 years, but the current players "don't know how to use unpaired technology," Muletta says. "This is a single block for sending and receiving using time as a way of sequencing the signals rather than upload and download."

According to Muletta, M2Z has unique time-division duplexing technology that will allow the service to deliver 8 to 10 times the capacity of traditional cellular service.

There are still many hurdles to overcome before AWS-3 sees the light of day. Everything from producing chips in volume to laying out the network infrastructure. What's worth noting is that half of the cell towers available in the United States aren't actually owned by today's carriers. Instead they owned by third parties that lease room on the towers, "like hotels."

The business model is familiar. Rather than paying for service, advertisers will pay for ads, in this case localized by M2Z based on the Zip code information of its users. Muletta says that Zip code data alone will be sold, not data on where users surf using M2Z's service.

M2Z has also proposed a leasing deal with the FCC. Rather than buy the spectrum outright, under that scenario, M2Z would lease AWS-3 from the FCC and give back 5 percent of its profits to taxpayers. If the FCC isn't interested in that option, M2Z still appears to have the financial backing to bid on AWS-3 with the best of them.

What I really like about M2Z is that it is one of the first companies to realize that the nature of the game has changed. Muletta understands that the future of computing and content is going to be pervasive and free, and he and Medin are shaping M2Z to deal with that reality rather than fight it.

"The entire Internet ecosystem is Web-centric," Muletta says. "The limitation to that system is that it is very expensive to connect to it. What we are trying to take out is the cost of connectivity, to reduce it down to zero for most users."

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