Posted by: eschi | November 10, 2008

Internet – The American way

I figured that I cannot start my appearance on the blog with a sexist comment on the Playmate article, so here is my inaugural contribution to our blog, obviously slightly work-biased…

This is something I read a couple of weeks ago.  Basically, the FCC (famous for their good old Milgrom spectrum auction) is likely to put up for auction quite a bit of spectrum for a provider to offer free (read: ad-supported) internet for nearly everyone. Although slightly socialist I guess it is quite a nice idea and I doubt that it will impact the broadband retail market in any way.

However, the whole thing is American and obviously has a “haken”. The available content will be securely filtered and “family-friendly”, so that Paul the Puritan can happily let Paul jr. surf the web! Actually, it would be very interesting to see the whole thing go live and bet on the number of seconds it takes for computer nerds to circumvent the filters (personal guess:  0.01)…

More info here and here


  1. Socialism is ad-supported these days? Maybe that’s where our East German brethren went wrong…

    Maybe you can shed some more info on this: What kind of technology would be used to provide this service? Just a regular cell technology like GSM/UMTS or CDMA or some sort of next-gen wireless standard? Would this be something that existing hardware could take advantage of right away?

    And why do you not think this would have any perceivable impact on the broadband market? Granted, 768k ain’t all that much if you want to do anything that reeks of multimedia (especially if you have to share that pipe with other users), but for most web browsing, email and whatnot this would be perfectly fine.

    All in all: I want this in Germany, too! Sans content filters, of course, which is a pretty appalling precedent and one that I hope the next Obama appointee to the FCC chairmanship will get rid of. Wireless we can believe in, so to say.

  2. He Marky Marc, finally you are present. And off course you could have started with a sexist comment: I started with trying to make useful comments but my level declined faster than the stock exchange last months and now I am at my more natural level, so join the club 😉

    Just a short question: how would it be add supported? Would it replace banners on sites or would the screen be smaller and surrounded by ads? And is it really feasible, I mean the click-through rate of adds on sites are relatively low I believe. I for example have used only a few in all those years and recently I realised I really don’t notice the ads at all, as if I filter them or something.

  3. Good questions, guys. I have done some further research to answer them.

    Re technology: The FCC advocates technology neutrality, however, the fact that there is only one single block of spectrum available makes TDD technologies more likely to be implemented (e.g. WiMAX) than FDD (mostly CDMA in the US).

    Re market: Given the amount of spctrum available (~25MHz) of which only 25% must be used for free broadband, the main issue will be capacity. Assuming that the auction winner will only offer about 5MHz for free, this will allow approximately 6Mbit/s available per base station (checking with my colleagues later) available to all users at the same time. Although this may be great for Franck the Farmer who just happens to be part of the 95% covered, metropolitan areas will be heavily congested. So, Toby, you are right, I expect the service to be able to deliver very basic functionality (email,IM, non-fancy surfing). Which is nice if you are on-the-go but does not really replace your home connection. This might be a threat to mobile broadband, but I am not sure how high penetration in the US is…

    Re advertising: I could not find anything specific. I would expect there to be some advertising when you log in but am unsure to what extend webpages can be modified by the service provider. An extra window around your browser might be an option but I am not sure whether this is technically feasible…

    If you look more closely at the company, who drives this initiative, M2Z Networks, you will see that they plan to offer wholesale and premium services. So, I expect they will go with offering the minimum amount of spectrum for free and cross-subsidising this with their paying customer. So, the ad-support might just some alibi revenue stream for the people to be impressed…

  4. Thanks for the answers. This is sounding more and more interesting.

    The technology will indeed be “a variant of 802.16”, i.e. WiMAX which ought to make this accessible through hardware which I suspect will probably be built into anything built after 2010 or so.

    About bandwidth: isn’t the solution to urban areas simply to increase the number of towers? In principle only cost should limit the quality of the service they can provide, no? And I suspect Franck the FarmerTM is going to be hosed no matter what (unless he grows stuff in the middle of a major metropolis). These types of networks don’t seem very profitable in flyover country.

    About its effects on the market: IANAMA (I am not a market analyst), but the most interesting applications and use cases for this services seem to me to involve text, whether in human-readable form or in the form of structured, machine-readable data (various dialects of XML and such). And at least for my current mobile internet use, that covers pretty much all I need. And for receiving email, checking my RSS feed subscriptions and a few AJAXy internet apps, 384 kbps (see the FAQ which is pretty interesting) seems like more than enough. Then again, I wouldn’t be surprised, if they do suppress certain services over the network because anything but browsing can’t be used to serve ads.

    Far more interesting, however, might be what this means for devices like Amazon’s Kindle, which currently has connectivity via Sprint’s EVDO network. I suspect many more devices would be able to benefit from some free, very low-throughput connectivity to the Interwebs.

    How exactly they will present the ads, I still don’t have any idea about. The FAQ says “Advertising revenue will support the free service, using local geo-tagging for highly relevant non-intrusive search results (i.e. searching “pizza” will give you the local pizza place down the street and not a Pizza Hut in another city or state)”, which is a cool concept in principle and one e.g. Google would probably be thrilled to be able to provide. But I doubt Google would be very happy if they just replaced/added ads to their search results. And if I’m not mistaken Google would have a pretty solid case against this violation of its intellectual property rights.

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