Thursday, September 13, 2007

M2Z Offers Free Horses, FCC Nixes

Infoworld reports that M2Z Networks, the startup co-founded by John Muleta, the former head of the FCC's Wireless Bureau is prepared to sue after the FCC turned down it's request for 20 MHz of currently fallow spectrum. The spectrum between 2155MHz and 2175MHz was to be used to provide free wireless broadband at speeds of 384Kbps downstream and 128Kbps up. In today's broadband marketplace, these speeds are roughly the equivalent of riding a horse compared to driving a car.

Startup may sue FCC over handling of wireless plan

Muleta appears to have read his FCC history when he offered free universal service for broadband with voluntary censorship of inappropriate content if the FCC would provide the necessary spectrum in exchange for 5% of revenue being deposited in the US treasury. In the past such an offer might have been a slam dunk or at least a bank shot of the backboard. The FCC has long used their mission to protect the "public interest" as a means to get concessions from license holders, without ever having to explicitly dictate terms. Free, Universal Service, "Family Friendly", wireless and broadband is surely a litany of desirable goals for the FCC, so why the foot dragging?

First, as I've mentioned previously, the success of the 700 MHz auction will be Chairman Martin's legacy. Until this auction is in the books, the Chairman has no desire to offer an alternate means of spectrum allocation. Approving the M2Z deal would devalue the spectrum being sold in January.

Second, as Sascha Meinrath of the New America Foundation points out, 384 Kbps down and 128 Kbps up is not really a broadband service by today's standards. Certainly, folks with a mule would take a horse for free, even if you could only ride the horse certain places, but the car industry might have something to say. When current technologies can provide faster wireless broadband, what is in the public interest about licensing an inefficient service?

Wednesday, September 12, 2007

The Nobility of Mobility

Arrington posts on TechCrunch regarding some companies and applications making a go of the Mobile Social Networking space.

The Holy Grail For Mobile Social Networks

He correctly identifies what he calls the "chicken and egg problem" with regard mobile applications - a critical mass of users is required for any one user to find any utility. Of course, economists frame this situation in the theory of network effects and Metcalfe's law. A telecommunications network's value is proportional to the square of the number of users.

The goal for any entrant into this space should be to ensure they have enough users so that their usage reaches a tipping point. The best way to acheive a critical user mass for tipping is to ensure that your application is bundled with an existing mobile provider's product. We are also very likely to see vertical integration of mobile social networking apps from Apple and Microsoft and Google as well if they enter the service provider space through the 700 MHz Auction.
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