Saturday, February 18, 2006

Cellular Internet Challenges DSL and Cable

Wireless Internet running on the cellular phone networks has matured to the point where bandwidth, coverage and prices now represent a serious challenge to wireline broadband services. Consider that you can now get T-Mobile Internet Unlimited running on their EDGE network with unlimited data for $49.99 a month, one has to wonder if the days are numbered for the low end DSL and Cable Internet services.

Clearly, this is not what you hear touted in the poplar press. There's still a notion that cost sensitive consumers are finally starting to abandon their 56K dial-up services in droves, in favor of adding DSL to their phone lines or Cable Internet bundled with Cable TV. What's sneaking up without so much fanfare is the steady upgrading of cellular base stations to assign more and more channels to always-on data service. For their part, the cell phone companies are pushing their new video and music on-demand services enabled by the upgrade in available data bandwidth. To them, the big revenue growth will come from entertainment and information services they can get cell phone users to buy as upgrades. Aircards and data service for mobile computers seem like an afterthought. Or are they?

Right now you can upgrade your computer to get Internet service from a cell phone network. What you need is an available PC Card slot. Those come standard on laptop computers, but you can get adaptors for your desktop model. You plug in what's called an aircard. This is a radio transceiver designed to work on one of the cellular data network standards: EDGE or EV-DO. In effect, it's a cell phone on a PC peripheral card that works like a modem.

The lowest cost service is T-Mobile's Internet Unlimited with MyEmail. You pay a monthly access fee of $49.99 for unlimited data on the T-Mobile USA Network. That gives you instant access to your email and Web browsing with full Internet access. The Sony Ericsson GC89 Cellular and WiFi PC card to let you access the network is available free after rebate when you order it with T-Mobile Internet service. EDGE (Enhanced Data rates for Global Evolution) gives you download speeds up to 274 Kbps with this card when you have a strong signal from an EDGE enhanced cell tower. Otherwise, the system gracefully falls back to a lower speed standard, GPRS (General Packet Radio Service) running at data rate of 30 to 80 Kbps.

Verizon offers a higher speed cellular Internet service called EV-DO (EVolution-Data Only) with download speeds of typically 400 to 700 Kbps and bursts up to 2.4 Mbps. When outside of the EV-DO network coverage, the system automatically provides 1xRTT service at an average of 60 to 80 Kbps. For $79.99 a month, you can have access to the Verizon Wireless EV-DO network using an Audiovox PC5740 PC card that you can get free with a service order.

Some new laptop computers like the Sony Vaio VGN-T350P and the Panasonic CF-18 and CF-29 Toughbooks come with cellular Internet capability built-in. All you have to do is activate a wireless service contract and you have wireless broadband Internet to go.

Up till now, these cellular Internet services have been promoted to mobile professionals who need Internet access wherever they happen to be. But consider that these data rates are not all that different that you get in practice from many DSL and Cable Internet services. Consider also that most people use their computers at home for reading email and browsing the Web, not high bandwidth video services. Further consider that many people are dropping their landline phones in favor of using just their cell phones and you have a perfect storm brewing for disruptive technology change.

Typically when people move, they have to establish new phone service with the phone company, perhaps including DSL service for broadband Internet. Or, they skip the DSL and get Cable Internet with or without Cable TV service. Then they set up a Wi-Fi network so they can still use their laptop computers without getting tethered by network wiring. How soon will it be until the light goes on that says: "Hey, if I get cellular Internet I can have wireless Internet access on my computer and carry it with me to the park or my favorite hangout that doesn't have a Wi-Fi hotspot. I don't need to order a phone line because I already have my cell phone and I don't need DSL. I'm getting satellite TV, so I don't need Cable either."

Cellular internet may soon completely blow away satellite Internet service. Two-way satellite broadband is very expensive, has long latencies and can be interrupted by bad weather. With cell towers popping up in more and more remote locations and more base stations getting EDGE or EV-DO capability, if you can use your cell phone in a location, chances are that you can get cellular Internet service too.

The other fierce wireless competition is Wi-Fi hotspots, which are common in sit-down restaurants and coffee shops and are now being embraced by many communities. Download speeds are faster than cellular broadband, but hotspot coverage still is spotty and likely will continue to be. But why not take both? Most laptop computers now have Wi-Fi capability built-in and the GC89 aircard even includes Wi-Fi access up to 54 Mbps. When you are in range of a Wi-Fi hotspot you can enjoy faster speeds. Everywhere else, you have cellular Internet access that is likely more than adequate.

Consumer fascination with sub-Megabit per second DSL and Cable Internet services, both of which have reliability issues in addition to oversubscription, may soon wane in favor of cutting the cord with Wi-Fi and cellular Internet. The future for phone and cable companies is in 100 to 1,000 Mbps fiber optic lines to the home that will enable high bandwidth applications like HDTV on demand. But they better get moving on this faster than they have been... before newer wireless technologies grab this market also.

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