[Hen] WiMAX=OPEN LTE=CLOSED

[Johnson, Bill]

Lots of folks ask me why Education seems to prefer and back WiMAX while
telecom giants like AT&T are going to back LTE? Well, this article seems
to hit the nail on the head in my book. 

-bj

 

Culture clash 

>From The Economist print edition, Jul 17th 2008

http://www.economist.com/business/displaystory.cfm?story_id=11751174

As "third generation" (3G) networks proliferate, the focus shifts to 4G

WHAT would the technology industry be without standards wars? Like a
city without sex, some might argue. But not all fights are
winner-take-all battles like the one between VHS and Betamax in
videotapes, or Blu-ray and HD DVD in high-definition video discs.
Sometimes there need not be a loser, and the din of battle may drown out
the real issues-as in the fight between WiMAX and LTE.

These are the main contenders for the next generation of wireless
networks, known as "fourth generation" (4G) networks. Many
equipment-makers are already working on 4G technology, even though
consumers in many countries have yet to experience the 3G sort. And
hardly a week passes without news from the battlefront. This week ELRO,
a Danish utility, awarded a contract for a nationwide WiMAX network in
Denmark; and Verizon Wireless, an American operator, said it would
launch an LTE network in 2010.

Both 4G technologies promise wireless nirvana: fast, ubiquitous
broadband. Once radio chips are cheap enough, they will crop up not just
in handsets and laptops, but in devices such as digital cameras and
electricity meters, which are unconnected today. But the telecoms and
computer industries have very different ideas about how this should be
done, and this explains the split between WiMAX and LTE (which are
technically similar). WiMAX is an attempt by the computer industry to
export its way of doing things to the telecoms industry-and LTE is the
response.

WiMAX's main cheerleader is Intel, the world's biggest chipmaker, which
wants to remain dominant as computing goes mobile. Since 2002 it has
rounded up a coalition of firms, each with its own interest in seeing
WiMAX succeed. Google, for instance, wants to get online advertisements
onto mobile devices. For Sprint Nextel, an embattled American wireless
operator, it offers the chance of a comeback.

Intel's vision, and that of its allies, is that wireless broadband
should be as "open" as the internet. WiMAX devices need not be
subsidised by operators and will be sold in retail stores. The
intellectual property will be shared. Consumers will pay a flat fee for
access, and can then use whatever online services they want.
Commoditising the transport of data will, the WiMAX camp hopes, boost
demand for Intel's chips, Google's services and so on.

What Intel is to WiMAX, Ericsson is to LTE, which stands for Long Term
Evolution. As its name suggests, it is meant to be an update to today's
mobile-network technology. This makes it attractive not just to
Ericsson, the world's biggest maker of such gear, but also to other
vendors and to most mobile operators: they can build on their existing
investments. Another member of the LTE camp is Qualcomm, an American
chipmaker that owns vital chunks of intellectual property in wireless
telecoms.

Like the WiMAX alliance, the LTE camp stands for a certain way of
carving up the pie, which critics call "closed" because it may limit
consumers' choice. Operators, they worry, will control which devices can
connect to their networks and will try to keep users within a "walled
garden" of services, as they do today, in an effort to capture more of
their users' online spending.

Until last autumn, WiMAX seemed to have a lot of momentum. Its standards
had been agreed on, equipment-makers were already making the gear and
some 300 operators across the world were building networks (albeit
mostly of the "fixed wireless" kind, where the wireless link is a
substitute for a tethered broadband connection). In America Sprint and
Clearwire, a wireless start-up, had started building nationwide WiMAX
networks. WiMAX, it seemed, was ready to go, whereas LTE was still under
development.

But since then the tide has turned. Sprint and Clearwire ran into
financial and technical problems. Other operators reported that the
technology was not ready for prime time. Auctions of radio spectrum
suitable for WiMAX have been delayed. And the LTE camp has fought back.
Its technology recently received the official backing of the influential
GSM Association, a global club of wireless operators. And Verizon and
AT&T, America's largest operators, said they would adopt LTE.

Now everybody seems to think that WiMAX will be no more than a "niche
technology", in the somewhat self-serving words of Hakan Eriksson,
Ericsson's chief technology officer. Frost & Sullivan, a market-research
firm, predicts that if spectrum auctions and commercial roll-outs do not
happen this year, "the market scope for mobile WiMAX on a global basis
will be insignificant." Nortel, another big equipment-maker and an early
WiMAX backer, estimates that its market share will be 10% at best by the
end of 2012, and recently said that it would now focus on LTE.

It would be wrong, however, to count WiMAX out just yet. It will find a
place in developing countries, where today's wireless technologies are
less entrenched. Tata Communications, an Indian firm, for instance,
intends to build the world's largest WiMAX network. And Intel and its
allies still seem willing to spend heavily to jump-start the technology.
Intel's venture-capital arm has invested in WiMAX firms around the world
and will continue to do so, says Siavash Alamouti, one of Intel's WiMAX
evangelists. Intel, Google and three American cable operators are
investing $3.2 billion in Clearwire, which is merging with Sprint's
WiMAX operation, called Xohm.

The new entity, still called Clearwire but majority-owned by Sprint, has
about two years to prove the value of WiMAX, says Peter Jarich of
Current Analysis, another market-research firm. This will be hard.
Clearwire hopes to launch in September in Baltimore, but further delays
would not come as a surprise. In the meantime, operators are upgrading
their 3G networks to reach similar access speeds.

Yet even if Clearwire fails and WiMAX is confined to a niche, the
efforts of Intel and its allies will not have been in vain. The LTE camp
has already taken more than one leaf from WiMAX's book, says Olivier
Baujard, chief technologist at Alcatel-Lucent, another big
equipment-maker, which has a foot in both camps. The first LTE networks
will now be deployed much faster than expected, perhaps as soon as 2009.
Makers of LTE gear have also agreed to fair cross-licensing of
intellectual property (although, predictably, Qualcomm has refused to
join either patent club). And mobile operators appear to have realised
that they need to open up their networks.

This rapprochement may explain why there is now talk of merging the two
technologies, by making WiMAX part of the LTE standard. Even Sean
Maloney, Intel's Mr WiMAX, says "they ought to be harmonised". Although
this is still unlikely, it would not be a bad outcome. Subscribers could
then take advantage of internet-like openness combined with the
robustness of wireless technology-without having to put up with the
inconvenience of two different standards.

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