2009 top underreported technology stories:1. Wireless broadband woes are harder to fix than you might realize
AT&T has taken a huge amount of heat for its subpar 3G performance. Much of the criticism is well deserved, but there's a larger, more disturbing truth: We're running out of wireless spectrum. What's more, networks designed to handle big downloads can't cope with the peer-to-peer traffic generated by games and smartphones.
"No one was prepared for the effects of [Apple's] iPhone," says Charlotte Yates, CEO of Telwares, a telecom and IT infrastructure consultancy. Sure. You've heard that before, but Yates explains that it's not just the amount of traffic, as many of us suppose, but the type of traffic, that poses difficulties.
Consider your iPhone, Droid, Pre, or similar device. Much of the time when it's in your pocket or purse, it's actually pinging the network to see if you have e-mails, stock updates, or news alerts. Most of those chunks of information are rather small, but when added to the constant polling of the network, they consume lots of resources. Similarly, multiplayer games, Twitter, and social networking sites used on wireless networks are constantly refreshing and pulling down data on what individuals are doing and broadcasting it.
There's also a less-than-obvious problem caused by big downloads of things like HD video. Networks, says Yates, are designed for two-way communication. In effect, the network is waiting for traffic to come up the pipe and consuming a certain amount of resources as those channels are idle. Thus, massive downloads actually cause both downstream and upstream problems -- stress the networks weren't designed to handle.
"Carriers handle network management differently -- even if one carrier is optimized, another may not be. And because networks are connected, the weakest link sets the pace," Yates says.
Spectrum, like water, is a resource you don't think much about -- until it runs out. And that's a major challenge facing carriers, consumers, and the government.
"I believe that that the biggest threat to the future of mobile in America is the looming spectrum crisis," said FCC chairman Julius Genachowski at the CTIA conference in October. He predicted that total wireless consumption could grow from 6 petabytes a month last year to 400 petabytes by 2013. (A petabyte is 1,024 terabytes.)
"So we must ask: What happens when every mobile user has an iPhone, a Palm Pre, a BlackBerry Tour, or whatever the next device is? What happens when we quadruple the number of subscribers with mobile broadband on their laptops or netbooks?" Genachowski said.
Right now, there's approximately 834MHz of total spectrum available (including 50MHz about to be added), but the FCC believes that most of it -- 760MHz to 840MHz -- will be needed by 2010, leaving little for future demand. The commission may well expand that, but there will be competition beyond the wireless industry to use it, particularly from the military and emerging entrants to the marketplace, says Yates.
A December 2009 report from Morgan Stanley shows that peak wireless data usage in the United States routinely exceeds 75 percent of capacity, which is a danger sign for carriers, as the figure below shows. Much of that is due to iPhone users, who use the Internet much, much more than other smartphone users (though Android users are beginning to take significant advantage of the Web as well). The financial firm expects AT&T and other carriers to have boosted capacity significantly by 2012 at its cell sites, where much of the bottlenecks occur that frustrate users, thus reducing peak demand to 60 to 70 percent of capacity.
The wireless industry has wrestled with capacity challenges in the past. In the 1990s, AT&T added Digital One Rate plans to its offering. This "one rate" deal was an overwhelming commercial success, adding hundreds of thousands of subscribers -- but also overwhelmed a network that wasn't ready or optimized to receive them in such short order, recalls Michael Voellinger, executive vice president of Telwares.
AT&T, Verizon, and the other major carriers have plenty of responsibility for the limpid 3G service, but if they are to avoid another, much broader meltdown, a lot of players -- including the FCC -- had better start moving to solve network management issues and the shortage of spectrum. Consumers may even have to moderate their desire for the most bandwidth-intensive applications.