Nationwide 802.11 venture explored by Intel, IBM, AT&T Wireless, Verizon, Cingular
The New York Times today reports that a group of large telecommunications and computing companies is discussing the possibilities of creating a nationwide 802.11 network. The group includes Intel, IBM, AT&T Wireless, Verizon Communications and Cingular, the article says.
No primary source would speak on the record, but the article notes the discussions -- code-named Project Rainbow -- have been going on for eight months. No decision will be reached for a few months since the companies are still trying to decide whether there is a "workable business model." What a surprise (!) -- a workable business model for nationwide 802.11 is what lots of companies have been struggling with!
Intel has been one of the companies leading the discussions, as well as leading the charge to incorporate 802.11 into computers. IBM's Global Services Division would provide access points and develop software for nationwide integration of the hotspots, according to the article.
[CNET News wrote an article on July 12 about IBM incorporating 802.11 capabilities into its "EveryPlace Wireless Gateway."]
Wireless Internet & Mobile Computing's view
John Markoff, the New York Times reporter, and one of the country's premier computer writers, spoke to me about Project Rainbow and quoted me in the article. Here's my expanded view....
A nationwide 802.11 network run efficiently, with thousands of hotspots, efficient billing and the right pricing certainly would be a great service. But this is easier said than done, and time and time again the wireless industry has tried to create nationwide or worldwide wireless data ventures and has gotten into serious trouble. Think Cellular Digital Packet Data (a story I was the first to uncover many years ago), think Wireless Application Protocol, think Bluetooth.
The problem is when you get a room filled with major corporations with entrenched interests it takes a long, long time to reach a conclusion. Then, when a conclusion is reached, these corporations establish an organization to "promote" the effort. "Promotion" typically results in misleading statements and lies. What misleading statements and lies?
Misleading statements and lies
Typically, wireless groups mislead or lie about the state of the technology (when will it be ready for commercial deployment?), the ease of deployment (is it really just "plug-and-play"?), the capabilities of the technology (such as the theoretical maximum data rates -- that no one achieves) and the availability of hardware (how long will it take to develop bug-free network equipment and consumer devices?).
If you look at the history of CDPD, WAP and Bluetooth, as examples, you will see that most -- if not all -- these efforts were disgusting in how they misled or lied to the public. The wireless data industry seems to feel it must "evangelize" -- i.e., mercilessly promote without paying attention to the facts -- virtually every new development. This is really sad because all these efforts I mentioned -- CDPD, WAP and Bluetooth -- have merit.
As I have said and will continue to say, the top management of wireless companies has been incompetent in advertising and marketing wireless data products because of the hype. The wireless industry has itself to blame (in large part, but certainly not completely) for the public's reaction -- or lack thereof -- to wireless data products and services.
Project Rainbow
Now we have another big-name group that has a good concept. But I can't emphasize enough the importance of ensuring that all the components of the value chain are sufficiently strong! 802.11 actually has some significant advantages over 3G cellular in this regard.
For example, the hardware already is ready for prime time. There are 802.11 PC Cards, Compact Flash Cards, USB transceivers and PCI Cards. There are access points for home and business use.
The "application" is, in great part, the Internet itself and access to your corporate network. The cellular industry, in contrast, has been struggling to find new applications that would be appropriate for relatively slow speeds and relatively expensive airtime.
In addition, 802.11 uses the "right" devices: a laptop computer or a PDA, which have good entry mechanisms and screens.
In some ways, 802.11's advantage is it isn't a "disruptive technology." If you can do it from home or from your office, you probably can do it via an 802.11 connection.
Compare 802.11, for example, with 2.5G (GSM GPRS) and 3G (CDMA 1x) technology. The handsets are slow to arrive, and some have buggy software. The data rates, especially for GPRS, are far slower than anticipated (i.e., hyped by GPRS vendors, cellular operators and other entrenched interests).
Typical cellular handsets, with their tiny monochrome screens and keypads, are awful devices for wireless data, except for SMS. Would you want to read a long message or type a long message on a handset even if you could get a data rates of 1G bps?!
Beware the 802.11 value chain!
Although 802.11 does have advantages over cellular, there are significant problems. For example, you still have to create a nationwide billing system. If the cellular operators want to offer 802.11 + cellular, you need the network and client software. You also need 802.11 + cellular user devices. (Nokia has a multimode PC Card, but other types are needed.)
One huge part of the value chain: the hotspots! Project Rainbow participants still have to negotiate with the "landlords" to get hotspots into hotels, conference centers, airports, coffee shops, etc. Of course, it is possible to buy your way into coverage -- but only to a certain extent.
T-Mobile Broadband (VoiceStream) purchased MobileStar and now has hundreds of locations, primarily in Starbucks and American Airlines Admirals Clubs.
But even if Project Rainbow could purchase every public hotspot in the U.S., it still wouldn't be enough.
Tough negotiations
Another point: Negotiating to purchase hotspot locations is sometimes like climbing up a mountain, one step at a time. Yes, you could negotiate with a major hotel chain, for example, which could deliver many properties. But could even a hotel chain deliver all its properties? Some hotels are owned by the corporation while others are franchisees that do not necessarily have to follow all the dictates of the parent company.
As for airports, you need to negotiate with them one-on-one, and it's very, very tough going. Airports are not just concerned with the aftermath of 9/11, but they also are "concerned" with ringing every last dollar from wireless operators. Airports are playing hardball, and negotiations are not pleasant or quick.
How about convention centers? The situation is similar to airports. There are companies that provide communications infrastructure to convention centers, but every convention center has to decide whether it wants 802.11. Of course, just like every other potential hotspot location, convention centers need their own justifiable business model.
The bottom line
So, what's the conclusion?
Project Rainbow could be good news. It could provide valuable 802.11 services across the country. It could be a big boon to travelers.
It could also take a long, long time to implement, and that implementation process could be stymied by hype.
Media Reports on Project Rainbow
John Markoff broke the story, but the trade publications haven't lost any time following up. None of the articles add anything new from the main players since no one seems to be commenting. Reporters are left with getting comments from analysts, like yours truly.
Computerworld's article quoted me, but one of the quotes doesn't have quite the implication I meant. Quite possibly I'm to blame for not being clearer.
I'm quoted as saying that Project Rainbow seems like a good idea but there are lots of good ideas in wireless that haven't made it, such as WAP and Bluetooth. WAP has indeed been a terrible disappointment. Although proponents are plugging the latest WAP 2.0 standard, I think WAP is considered and will be considered a failure.
The final chapter of Bluetooth, however, certainly hasn't been written. Bluetooth is not dead and it does have some merit. Certainly the initial products have been late, there are interference problems and serious compatibility issues. But there's still life in Bluetooth.
For more Bluetooth information, read Glenn Fleishman's recent entry in 802.11b Networking News. Also, check out Scott Loftesness' Bluetooth Weblog.
3:40:30 PM 
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