Nationalize the mobile broadband industry???

I am going to put forward a brief argument recently made by a member of the 3GPP standards body that will be unpopular with my friends who work with AT&T, Verizon, Sprint, T-Mobile, and anyone associated with the Cell Phone Industry. I’m not in favor of the idea myself, but I know that if I don’t state the case now, someday, someone will make the argument.

It seems appropriate in this time that we are debating the idea of government-run health-care, that perhaps we should look at the idea of nationalizing certain industries. There is one industry that may become a target for nationalization, particularly as more people use it. Is it time to nationalize the cell phone industry and bring wireless cellular communications under the control of one company that is run by the government?

Yes, I know the arguments against nationalizing the wireless industry are legion. And yes, someone will remind us that AT&T was once a monopoly in the wired phone industry that was broken up about 30 years ago. But in the future, someone will make the case FOR nationalization, so I thought I’d get the case for nationalization out there as a public service so that everyone will have the correct information to make a judgment when that day comes.

First, let’s make a couple of points…

(1) Wireless has become more important than electricity for many people around the globe. No, seriously, it has. 85% of the planet’s population has wireless connectivity compared with only 80% of the planet having electricity. And the 85% is increasing. At some point this year, the number of wireless connections around the globe will exceed the number of people in the world. Furthermore, at it’s present projections, the number of wireless connections on Earth will exceed 50 billion by 2025. Although people will still use wireless to communicate, wireless connections will become more and more based on machine to machine communications. Every appliance in your home will have some type of internet connectivity, passing data back to other machines, allowing smarter machine to mange things that have become tedious in our eyes. In short, the internet has become less an internet of documents and more an internet of things. The change in definition is significant.

(2) The mobile phone has become more than just a phone or internet device. In many parts of the world, it has become money itself, either as a credit card or as a tool to hold money. In addition, plans include making the mobile phone a way to monitor personal health stats, and a way to share locations and information between people. Some kids today have become so dependent on their smartphones from everything in their lives that they cannot function without it.

(3) Even though the world has finally adopted a global technology in the form of LTE, the fragmentation of the World’s RF bands has made a global 4G device almost impossible—unless you want to go back to the days of a phone the size of a brick. There are about 40 RFs that have been approved for LTE use and let’s just say they all don’t play nicely with each other. Look at the recent problems Apple has had with LTE on the new iPad outside of the US.

Based on this and other pieces of information, the smartphone has gradually become an essential part of people’s lives. It has become as much of a necessity as food, air, water, and shelter. I’ve personally seen homeless people have smartphones and they prefer having a smartphone to a stable place to sleep. In fact, during the recent Occupy protests, some people decided it was more important to buy a new smartphone than eat so they could get their message out to the masses.

But there is a problem. The cell networks that have supported cell phones are on the verge of being overwhelmed and possibly melting down. They cell phone industry is trying to compensate for an exponential increase in use of the networks by increasing network efficiency, buying new spectrum, and putting up more cell towers, but it’s clear that at present projections, widespread daily outages on the network will be seen starting next year. And it’s only expected to get worse. By 2016, Yankee Group projects that mobile data will exceed network capacity by a 2:1 margin. Plus, most networks don’t work well with each other in the US. If you are an AT&T customer and your network is having problems, you can’t go use Sprint’s network because AT&T and Sprint’s phones are not compatible with each other.

So, how would a nationalized network work in the US, if it was implemented? That’s a little unclear. The first way would be obvious. All the networks would be forced into one government-owned company. The US government would buy back all the spectrum, then merge it all together producing larger bandwidth that could increase capacity in urban areas where lack of spectrum is a problem. The US would also standardize under one technology (likely 3GPP), focusing the engineers on the problems of that technology, instead of being spread out to focus on 5 or 6 different technologies. Would it work? Well, Europe did a similar thing when the western portion of the continent created a single technology called GSM. By working on the issues before releasing the standard in 1991, they created a Europe-wide technology standardized at 2 RFs (later expanded to 4) that allowed cell-phone makers to easily create devices that could work across the globe. We don’t have that with LTE at present. In addition, putting up cell towers would be less of a hassle, because the government would eliminate one layer of obstacles that is now prevalent in working out how to put up towers.

A second way to implement a “nationalized” network is similar to a model now being implemented by the Russians for LTE. Last year, 5 companies entered into a landmark agreement where you effectively have network sharing. Scartel, the largest WiMAX provider in Russia, agreed to build the LTE network at specific RF bands, and 4 other companies would provide services on that network with the option to buy into the network. In the US, you might have AT&T and Verizon build the network. All the US providers could then buy into AT&T and Verizon’s network, but everyone would use the same network, with much more cell towers at their disposal. But it would still have national capabilities and all the networks would have to agree to work together.

One big benefit of nationalizing the cell phone industry is that it would focus cell phone providers to build more towards a specific set of requirements. That would in the long run reduce the cost of building a cell phone, a cost benefit that would be required to be passed on to the consumer in the long run.

The second benefit is that unifying the US along a specific set of requirements would make producing a “world phone” feasible again. As of right now, there are about 6 different LTE frequencies being proposed, and that doesn’t even count Lightsquared’s proposal which was just thrown out. If the US could unify around 1 or 2 frequencies, the rest of the world (China and India possible exceptions) would be focused on opening that common spectrum up to cell phone use, thus paving the way for a global standard to be built.

There are other benefits to be considered, and yes, there are potential risks. Again, though, this is just the thoughts of someone who has dealt with standards bodies, and he is expressing frustration at the fragmentation of LTE networks around the world. While I disagree with the idea, I sympathize with his concerns. While nationalizing the cell phone is a bad idea as far as I’m concerned, it is a way to try and build a global LTE standard—something that could become more imperative as LTE-Advanced starts being released next year.