4 posts • joined Monday 26th July 2010 10:50 GMT
Whose Mine Is It Anyway?
The operators object to paying taxpayers for something they'll use to make money - spectrum. Who doesn't like getting things for free, after all?
But the real problem is the idea of an auction. Established operators would, of course, always prefer a beauty parade, because they really have to mess up to lose out. An auction may bring in new players who don't have to justify anything but simply have to prove financial resources. And that poses a real threat.
As a consumer, it's easy. I want more choice. I want more innovation. And I don't want operators to sit on spectrum they've bought (sometimes by buying a company or merging operations), I want it to be used to my benefit.
But that doesn't make me a total fan of the auction mechanism. By nature, it moves money out of building an operation and into the pocket of the Government. It's a direct tax on innovation, not an enabler of it. It's better than the beauty parade, but it doesn't give me what I actually want, because it doesn't open up the market nearly enough. In fact, we've seen in the UK and elsewhere how new entrants tend to merge, because they get to share costs, and as competition reduces so does price pressure.
It seems to me that, faced with the legal threats, Ofcom might do well to consider a completely separate option.
My favoured direction would be to allocate some, if not all, of the available spectrum on the basis of a wholesale-only licence, with some additional light touch regulation to ensure, for instance, that the wholesaler was obliged to offer fair terms to any and every prospective customer.
This wouldn't remove the requirement for prospective network operators to gain licences any more than at present. And it would need to define service boundaries in ways that fit current 4G technologies. That feels slightly uncomfortable, but there's no real prospect of operators doing anything else in the short to medium term.
This would create the right conditions for competition, and accelerate progress to widespread use and innovative application of 4G. And for the established operators, it would guarantee that they can all have access to 4G as and when they want it - as can anyone else who obtains an appropriate licence and agrees terms with the wholesaler.
As a taxpayer, I like the idea of an auction, but it doesn't have to take the primary form of an up-front payment. Retailers in transport locations often pay a combination of a fixed fee and a percentage of actual turnover, and the licensor may be entitled to take back a location that fails to perform. Something of this sort could work in 4G too.
It's the economies, stupid
Intel has yet to deliver its first significant win in this arena. ARM owns the space.
Or rather, it doesn't. And that's its great strength.
Adopting a licensing business model has given ARM two dimensions of innovation - its own relentless drive to deliver processing throughput and power efficiency, and its licensors' packaging of that processor technology directly into single chip systems and package-on-package combinations.
That produces cost and time-to-market advantages, and fosters competition that benefits OEMs, who have confidence in the entire ecosystem, in which ARM enables the shots rather than calling them. The diseconomies facing OEMs thinking about adopting Intel are substantial.
That's not to say that ARM's position is impregnable. Intel's business model gives it many dollars per chip sold, where ARM collects just a few cents. It has breathtaking cash generation, deriving from the markets it dominates and the gross margin position it harvests. That war chest enables all kinds of attacks on the market it must succeed in if it's to maintain anything like its present position as the world goes mobile.
They must succeed. But that doesn't mean they will. And they are in the unenviable position of seeing both their star weapon - the wealth of software written first for x86 - degrading so unexpectedly rapidly, and of finding themselves facing a new wave of competition in Windows and server markets.
Half a league, half a league, half a league onward. It's a magnificent warhorse, and you have to admire the cavalry charge, but just look at the heavy artillery on every side.
Mobile malware is a problem, but McAfee isn't the solution. Buying McAfee guarantees that other security vendors will build closer relationships with ARM - and time will tell whether we need a new model operating system and better security on the device or a new model for mobile e-commerce where the device is simply assumed to be compromised.
This reminds me of the last days of the telecoms bubble, where the only thing that mattered was the size of the deal plus a powerpoint majoring on the word 'synergy.' Mcafee has been bought because it's big enough. Unfortunately it's not good enough to give Intel what it needs, and it guarantees further cooling in the Wintel alliance.
That first false dawn
As it happens, I went to visit Apple on a fact-finding mission as the Newton team was being disbanded, and interviewed leading players. I was looking at different systems; the focus wasn't Newton but General Magic's "Magic Cap." We looked at a number of other systems too, focusing on PDA and mobile media technologies.
Magic Cap pioneered the approach that Apple used with iPhone - building a community of network operators. It showed promise, but it was seriously flawed, and the dead hand of operator control had the inevitable result.
At that time, Microsoft's abysmal WinCE was both confident and victorious. It was puny, unimaginative and annoying but it leveraged Windows and Office. But it always looked like the past, not the future. It wasn't good, it wasn't loveable, it was just there. Newton had the glimmers of loveability, but the tech was flawed and Apple just didn't _get_ networking.
I love the way that Apple has re-invigorated the smartphone world. To me, iPhone and Android look like today - they capture the best of what was already forming all those years back. But I'm still waiting for something that looks like tomorrow, and I have a suspicion that neither Apple nor Google has the vision for the jump from lean and useable touch OS to something truly new.