Amazon may have added considerably to the world’s base of Android devices and applications, but it is becoming almost as threatening as Apple to Google’s mobile ambitions. Its latest plans may involve expanding beyond mobile devices into a fully fledged home media hub, driving its addictive content experience to every screen, and supporting that with its own embedded wireless connectivity, to promise superior speeds and availability compared to Wi-Fi. It is early days yet, but trials with Globalstar, which is proposing to deploy a wholesale Wi-Fi network in licensed satellite spectrum, provide a strong clue to the way Amazon’s stealthy Lab126 R&D arm is thinking.
Amazon is piling up the weapons against Google. It has created a rival app store based on its own implementation of Android, setting up a rival power base within Google’s own technology. It has used that platform to leap ahead of the search giant in the most important approach to mobile monetization outside advertising ‘ selling cheap devices for virtually no profit, in order to drive sales of digital media and even physical goods. Google was forced to follow that strategy when it launched its Nexus tablets, but it lacks Amazon’s compulsive buying experience and level of integration. Now the ecommerce leader seems to be toying with an idea that has also struck Google from time to time, acquiring spectrum to run its own network.
Google has been active in wireless spectrum and networking since it created a Wi-Fi hotzone around its campus and disrupted the US 700MHz auction with threats to participate. More seriously, it has been building out fiber in the US and trialling wireless technologies to bring broadband to unserved areas of emerging economies, with its white spaces projects and Project Loon experiment, the latter using low orbiting ‘stratellites’. That may still seem far-fetched, but the use of satellite spectrum to support terrestrial or hybrid services, and so address the shortage of frequencies for mobile broadband, is an increasingly significant element of global wireless strategies. In the US, both LightSquared and Dish planned to enter the market on the back of mobile satellite holdings, though both have run into problems which may end their dreams. However, those bands will be deployed eventually, when someone gets the finances and the regulatory issues right. Amazon, too, is looking to satellite spectrum, testing an emerging technology called TLPS (terrestrial low power service), which basically supports Wi-Fi, but in a licensed band.
The retailer has been conducting trials around its Lab126 subsidiary’s locations in Silicon Valley, working with Globalstar, the satellite provider. The latter has received considerable interest from the FCC in the past year in its proposals to support TPLS in its mobile satellite spectrum, hosting third party services which could use Wi-Fi devices, but in a private licensed band with none of the interference risks of the usual, unlicensed Wi-Fi spectrum. Carriers were expected to be the most likely customers, as they look to add capacity to their networks without having to buy expensive new spectrum, and as they increasingly rely on Wi-Fi to do this. However, Amazon would also be a natural fit. It could drive uptake of its devices, and therefore its content and products, by embedding wireless connectivity at no extra charge, as it pioneered with the 3G Kindle ereader models.
Using Globalstar’s system, which would have almost universal coverage once built out, would give it more ubiquitous and reliable connectivity than standard Wi-Fi, at lower cost than a cellular MVNO ‘ and without having to build networks of its own. Embedded wireless could become even more valuable as Amazon looks to expand its range beyond mobile devices, to develop a home media hub. It is widely expected to launch a low cost (possibly free to consumers) hub that would support TV, gaming and the Amazon Prime video streaming service, taking on Microsoft Xbox and the Apple and Google TV and media platforms.
We have always been sceptical of the rationale for companies like Google to create their own networks rather than seek to drive their devices and services out over all the carrier systems. The plan involves huge cost and risk, and is the antithesis of the cost structures and expertise to which web players are accustomed. However, there is a clear logic to an MVNO deal, enabling the device or service provider to control the brand and consumer experience rather than sharing those assets with the cellco. And partnering with a new, wholesale-dedicated initiative ‘ like LightSquared and, in the early days, Clearwire were supposed to be ‘ could give companies like Amazon greater control than a traditional cellco deal. For instance, as an early triallist and lead customer Amazon could help Globalstar get its business off the ground and, in return, gain benefits like optimizing the network for its Kindles.
There is a long way to go, of course, from a trial in Silicon Valley to a national partnership, not least regulatory approval ‘ currently Globalstar only has an experimental licence from the FCC to test its Wi-Fi over satellite idea. But if it becomes a commercial reality, it could add 22MHz of capacity to the US mobile broadband store. The operator is currently licensed to provide mobile satellite service in the ‘Lower Big LEO’ band at 1610-1618.725MHz for uplink operations and the ‘Upper Big LEO’ band, in 2483.5-2500MHz, for downlink. The TLPS network would run in the upper band, essentially adding a fourth non-overlapping channel (Channel 14) to the upper reaches of the 2.4GHz licence exempt spectrum. It would also make use of a small amount of unlicensed ISM frequencies at 2473-2483.5MHz. The scheme would see Globalstar convert about 80% of its frequencies to terrestrial use, as Dish and LightSquared have also aimed to do, chasing the richer rewards of mobile broadband compared to the satellite market.
The question then would be whether that unleashed capacity would primarily end up augmenting conventional cellcos’s networks and propping up their models ‘ as has happened with public Wi-Fi itself, despite the mobile carriers’ early hostility to hotzones; or whether it could propel something more disruptive. The US, as mobile power consolidates in the hands of the majors, needs some innovative thinking, and a wholesale 4G and/or Wi-Fi network underpinning a variety of different service providers could be a genuine challenger to Verizon, AT&T and their business norms.
Google has been a cheerleader for the idea of a wholesale, open access network that could even provide spectrum ‘on-demand’ for small or specialist providers which do not need to offer their services 24/7. But in reality, it has not yet turned its own wireless projects to that end, and in fact a smaller player ‘ BandwidthX ‘ has come closer with its Wi-Fi capacity marketplace. A Globalstar system could enable a new approach, and a platform for a ‘long tail’ in wireless services, but it would need a powerful backer, and Amazon might be just the ticket, pushing it up alongside Google in terms of its ability to influence the evolution of the mobile web.
Globalstar has been investigating several routes to monetize its satellite spectrum better, but TLPS has aroused the most interest. It has been working with wireless research group Jarvinian to trial the technology, using access points specially created by Carrier Wi-Fi specialist Ruckus. Jarvinian had spoken of a ‘major technology company’ with which the consumer benefits were being tested and assessed, but had not named it ‘ although in an FCC filing earlier in the year, it did identify three Silicon Valley locations where trials were taking place, all them sites of Amazon’s secretive research arm Lab126, which created the Kindle.
However, while Globalstar is talking up its spectrum ‘ claiming it is more valuable than Clearwire’s because it can tap into the existing Wi-Fi device ecosystem ‘ it must also be shivering in the shadow of LightSquared. As with most satellite bands, there are issues over potential interference with neighboring services once higher powered terrestrial equipment is introduced. In LightSquared’s case the issue of interference with GPS killed the project, at least for the time being, while in the case of TLPS, there are nerves about adjacent 2.4GHz incumbents, including conventional Wi-Fi. The Bluetooth SIG, also in 2.4GHz, has expressed concern, and meanwhile, one of the requirements of the two-year experimental licence granted to Globalstar is to ascertain whether TLPS would disrupt the BAS (broadcast auxiliary service) services.
Satellite analyst Tim Farrar of TMF Associates, who broke the Amazon story, thinks Globalstar is using the Amazon tests to put pressure on interim FCC chair Mignon Clyburn to initiate a Notice of Proposed Rulemaking ‘ the key step towards approval of a new technology ‘ before she hands over to incoming chair Tom Wheeler, who is expected to be more cautious. Globalstar is keen to get backing for its idea before it is overshadowed by other emerging options for adding to the US’s mobile spectrum arsenal and supporting new services ‘ TV white spaces and the 3.5GHz band are both in the spotlight. It claims its system can achieve 3-5 times the range of public Wi-Fi in congested spectrum, and even work well in cluttered indoor environments, while Ruckus has said it could reach up to four times the capacity of ‘traditional Wi-Fi’ (though without specifying whether that was 802.11n or the new 802.11ac).