July 06, 2004, 12:28 PM — Over the holiday weekend, I cleaned up a few things -- including some thoughts about recent news. So, this week, I'll offer a few disjoint items I hope you'll find of interest.
First, the IEEE 802.16-2004 standard was approved about a week ago. Sometimes known during its development as 802.16a or 802.16d, this standard for point-to-point and point-to-multipoint wireless metropolitan-area networks (WMANs) will form the basis of the WiMAX specification. Note the difference between standard and a specification: A standard essentially has the force of law, and is (in an ideal form) the precise definition of an interface between two or more objects. A specification is less formal, and is usually the product of a trade association (like the WiMAX Forum) as opposed to a recognized standards body like the IEEE. IEEE standards are developed through a rigorous process that is fair, open, and auditable. A specification need not have any of these virtues (with no aspersions intended here towards WiMAX, by the way!). And while the purposes of these two types of documents is often the same (to sell more stuff), they address very different needs. An IEEE standard doesn't specify, for example, compliance, conformance, or interoperability testing. And that's why the WiMAX Forum was formed -- to grow the market for wireless broadband by providing these missing requirements for success.
But will the availability of 802.16-2004 and WiMAX really grow the market? There's the obvious scenario that standards and interoperability specs do indeed lower costs, and thus allow for lower prices. Lower costs are the result of the investment in VLSI that becomes feasible as the result of the existence of a standard. Prices, however, are determined by the market, most notably through competition. Regardless, it does seem likely that the price of fixed microwave communications equipment will fall, thus allowing such gear to perhaps compete with wireline broadband, most notably xDSL and cable modems. But there are other costs to consider, including real estate, towers, local permits and licenses, and more. The cable and DSL guys can cut their prices significantly if they wish. So it's unclear to me that we'll see a lot of new fixed wireless broadband in our part of the world any time soon. But note that work continues on a mobile version of 802.16 (still called 802.16e), and then it gets interesting; more on that later this year. In the meantime, I do expect WiMAX to lower prices in venues where fixed microwave is the only option, mostly in developing economies offshore.