The FCC Wants Web Investors to Be Rich

For Web investors, white could soon make green. The Federal Communications Commission is officially backing a move to allow unused broadcast spectrum called "white spaces" to be used for wireless Internet service.

If approved, the decision would advance the economic attractiveness of cloud computing, and boost the fortunes of Google (Nasdaq: GOOG  ) , salesforce.com (NYSE: CRM  ) , and Facebook, among dozens of others.

White spaces, explained
What we call white spaces used to carry analog TV signals over long distances and through buildings. If you've ever had a TV with "rabbit ears," chances are you've tapped into the white spaces spectrum to get programming. You may have even seen a dial TV marked UHF (ultra high frequency) and VHF (very high frequency).

We don't allow that anymore. Instead, we've moved to digital TV delivered via cable and satellite. Spaces once occupied by analog signals have gone quiet, or "white." And they have huge value because they can be made to broadcast data over very long distances and through buildings.

For most of us, it's likely been 10 years or more since we've seen a dial TV. That's why, in 2004, the FCC began discussing opening those airwaves to other uses. Current FCC chief Julius Genachowski wants to take this idea from concept to reality.

He isn't only the one. Microsoft (Nasdaq: MSFT  ) has been able to provide Wi-Fi access over a mile between two antennas using white space spectrum, The Wall Street Journal reports. Google and Dell (Nasdaq: DELL  ) are also supporters of the FCC's plan.

We interrupt this program for opposition from broadcasters
The National Association of Broadcasters (NAB) isn't as enthusiastic. Members are concerned that Wi-Fi intrusions into white spaces will interfere with wireless microphones and other devices they use in broadcasting, the Journal reports. Static is deadly in broadcasting.

They have a point, sort of. If you've ever set up a wireless router (raises hand), you know that interference can be a problem. Anytime two devices broadcast into the same spectrum -- 2.4 megahertz for older models of Wi-Fi routers -- interference can occur, leaving you unconnected.

Potential technical issues aside, broadcasters don't have much of a complaint here. Networking equipment makers such as Cisco (Nasdaq: CSCO  ) and Netgear (Nasdaq: NTGR  ) have for years been building multichannel routers. More channels (usually) equals less interference.

My point? By itself, the act of broadcasting Wi-Fi signals into white spaces won't create interference. Conditions have to be perfectly bad in order for interference to occur, and even then problems shouldn't be difficult to fix given the state of wireless networking gear.

How white spaces help cloud computing
Assuming I'm right -- and look, this technology isn't widely deployed yet so I very well could be wrong -- the FCC's decision has the potential to resize the cloud computing opportunity for the bigger. Here's why:

  • Distance creates pervasiveness. Most of today's Wi-Fi networks have trouble broadcasting beyond 100 feet. Microsoft's tests show geometric improvements over that distance. If they prove replicable, users would have more, and more reliable, wireless access. And that, in turn, should lead to greater consumption of cloud services.
  • No need to wait for seeing-eye services. Perhaps the biggest advantage of adopting white spaces is the ability to broadcast over long distances through walls. The long-distance WiMAX network Clearwire (Nasdaq: CLWR  ) is developing requires a line-of-sight connection between antennas.

Modern computers are ready for cloud computing. How do I know? Right now, as I write, I'm running a YouTube playlist, connected to a host of Google cloud services in my Chrome browser, and using Meebo to instant message over the Web. More than 110 simultaneous processes in all. And yet my computer is consuming just 15% of its available processing horsepower.

In short, releasing white spaces would allow networks to finally catch up with software and processing horsepower. It's long past time.

Now it's your turn to weigh in. Does the FCC's white spaces ruling make you more interested in cloud computing? Please vote in the Motley Poll below and then leave a comment to explain your thinking. And don't forget to come back and see how your fellow Fools are voting.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Nergear is a Motley Fool Stock Advisor selection. Google and salesforce.com are Motley Fool Rule Breakers recommendations. Google and Microsoft are Motley Fool Inside Value picks. Motley Fool Options has recommended subscribers open a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool has written a bull call spread position in Cisco, and owns shares of Google and Microsoft. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is a go for launch. Begin the countdown.


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