Thursday, August 20, 2009

WiFi, 3G access

Both 3G and WiFi are access or edge-network technologies. This means they offer alternatives to the last-mile wireline network. Beyond the last- mile, both rely on similar network connections and transmission support infrastructure. For 3G, the wireless link is from the end- user device to the cell base station which may be at a distance of up to a few kilometers, and then dedicated wireline facilities to interconnect base stations to the carrier's backbone network and ultimately to the Internet cloud. The local backhaul infrastructure of the cell provider may be offered over facilities owned by the wireless provider (e.g., microwave links) or leased from the local wireline telephone service provider (i.e., usually the incumbent local exchange carrier or ILEC). Although 3G is conceived of as an end-to-end service, it is possible to view it as an access service.

For WiFi, the wireless link is a few hundred feet from the end-user device to the base station. The base station is then connected either into the wireline LAN or enterprise network infrastructure or to a wireline access line to a carrier's backbone network and then eventually to the Internet. For example, WiFi is increasingly finding application as a home LAN technology to enable sharing of DSL or cable modem residential broadband access services among multiple PCs in a home or to enable within-home mobility. WiFi is generally viewed as an access technology, not as an end-to-end service.

Because both technologies are access technologies, we must always consider the role of backbone wireline providers that provide connectivity to the rest of the Internet and support transport within the core of the network. These wireline providers may also offer competing wireline access solutions. For example, one could ask whether an ILEC might seek to offer WiFi access as a way to compete with a 3G provider; or a 3G provider might expand their offe rings (including integrating WiFi) to compete more directly with an ILEC. Of course, the incentives for such head-to-head competition are muted if the 3G provider and ILEC (or cable modem provider) share a common corporate parent (e.g., Verizon and Verizon Wireless or Telefonica and Telefonica Moviles).

Finally, focusing on the access-nature of 3G and WiFi allows us to abstract from the other elements of the value chain. Wireless services are part of an end-to-end value chain that includes, in its coarsest delineation at least (1) the Internet back bone (the cloud); (2) the second mile network providers (ILEC, mobile, cable, or a NextGen carrier); and, (3) the last mile access facilities (and, beyond them, the end-user devices). The backbone and the second mile may be wireless or wireline, but these are not principally a "wireless" challenge. It is in the last mile – the access network – that delivering mobility, bandwidth, and follow-me-anywhere/anytime services are most challenging.

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