Channel Should Prepare for A Wireless Broadband Boom

Wireless broadband is jockeying to become a potential big moneymaker for the channel and for the U.S. economy as a whole. However, channel players still have to sort through a variety of wireless technologies – Wi-Fi, WiMAX, satellite and others – to pick a winner. And the Federal Communications Commission may make the situation even more uncertain by considering a plan that would provide free high-speed Internet access to a large area of the United States within a few years.

Under the FCC proposal that comes up for discussion in June, the winner of a 25 MHz wireless spectrum auction would have to offer free wireless broadband access on a portion of it before being allowed to use the rest for commercial purposes. The free wireless network would have to reach 50 percent of the U.S. population four years after the license was awarded and  95 percent within 10 years.

It's not at all certain the FCC is going to approve this plan, which is certain to be opposed by many wireless carriers, ISPs, free-market advocates and wireless industry trade groups. However, the proposal would help silence critics who claim the federal government has done little to bring broadband to more households.

The impact on the channel could be explosive. A national free wireless broadband network would certainly ignite demand for numerous broadband services (voice would certainly be among them) and jump-start technology improvements in smart phones, PDAs and a host of other devices sold through the channel. It could also prod growth in the unified communications market in which many VARs play. And the need for new wireless applications would be enormous. Less clear is the impact on existing private and municipal Wi-Fi networks, as well as on upcoming fixed and mobile WiMAX deployments in this country. Would a national wireless network whet demand for more advanced networks and applications or cause ISPs to retreat from the marketplace?

One thing that is clear is that the FCC debate will occur at a propitious moment. The trade group CTIA (which is cool to the FCC's free-service requirement) has just released a study that says the total value of wireless broadband and mobile voice services to the U.S. economy will exceed $427 billion by the year 2016. The study was commissioned by CTIA and prepared by analyst Roger Entner as a follow-up to a 2005 Ovum research group report.

In a prepared statement, CTIA CEO Steve Largent said the study proves the wireless industry "continues to be a major player in the U.S. economy and an important driver for growth. At a time when America is in the midst of an economic pinch, more and more employers are turning to wireless broadband technology to help reduce costs, increase efficiency and productivity, and stay competitive in the marketplace," he added.

There is plenty in the report for channel partners to digest. It found, for example, that the health care and small-businesses markets benefit greatly from the implementation and use of wireless broadband solutions. For example, in 2005, productivity improvements due to use of mobile broadband solutions across the U.S. health care industry were valued at almost $6.9 billion. By 2016, that number will triple to $27.2 billion. The channel will likely play a vital role in many of those implementations.

The CTIA study also found that in 2005, 68.8 million U.S. enterprise users had mobile wireless services, with 25 percent using a mobile wireless broadband solution. By 2016, the number will grow to 81.9 million mobile enterprise users, with 83 percent using wireless broadband.

All in all, it looks like bright days ahead for wireless broadband. However, will the reality live up to the hype? The channel may have a lot to say about that.

(Al Senia is managing editor of ITChannelPlanet.com)