Wi-Fi is the dominant standard protocol for wireless local-area networking. But it uses an airwave frequency that is awfully crowded, and as a result regulators have been forced it to run slowly to prevent interference. Technological improvements have made it possible to speed Wi-Fi transmissions five-fold, a big boon to networking companies and consumers. If the FCC allows it, the boost to growth in wireless networking could be significant.
 |
|
|||||||||
|
||||||||||
|
||||||||||
By
Though "Wi-Fi," a wireless broadband protocol, may not have the catchy name of rival technology Bluetooth, it does have a large installed base of people using it in office environments. And if the Federal Communications Commission (FCC) approves a proposed boost in the rate at which it can process information -- its "throughput speed" -- Wi-Fi may have the momentum and applicability to run competing wireless broadband standards out on rails. This may sound boring to the non-propellerhead crowd. But try this on for size: Last year, companies sold a combined $1.2 billion in wireless networking kits to firms and organization keen on mobile data access. This number is expected by some to increase by perhaps 50% per year for the foreseeable future. (For more on this business, visit our Telecom & Networking InDepth page.) Given that, companies producing wireless broadband equipment are quite interested in settling on one, open standard communications protocol used to transmit data over wireless networks to ensure that all their products work together. If the experience of the cellular telecommunications industry has been any indication, Europe's election to settle upon a single standard -- GSM -- has proven a superior strategy to the alphabet soup of competing protocols in the U.S., including CDMA, TDMA, AMPS, iDEN, and so on. By avoiding this, European users have international roaming capabilities and significantly deeper penetration rates. Faster technology, meanwhile, means more applicability. More applicability means more people want to buy it. And a single standard helps. Pay attention, this could get interesting. In wireless networking, Wi-Fi, the dominant standard, is currently capped at a throughput of 11 megabits per second (mbps) due to concern over interference in the airwaves. Wi-Fi operates on the 2.4 gigahertz frequency, a crowded, unlicensed band shared by microwave ovens and cordless telephones. Wi-Fi devices may share this frequency with other services, but may not interfere with them -- the FCC's limits on Wi-Fi's throughput speed ensure that -- and must accept interference themselves. Other standards, including the confusingly named 802.11a -- Wi-Fi is 802.11b -- operate on other, less-crowded frequencies, and 802.11a is five times faster. But companies have yet to introduce 802.11a-standard devices, and as such the Wi-Fi installed base grows. More importantly, 802.11a is not compatible with current equipment, so changing over would be costly. The FCC, however, has approved a study to consider whether Wi-Fi throughput speed can be increased to 54 mbps. If that happens, the resultant growth in wireless networking may prove even more explosive. Plus, the Wireless Ethernet Compatibility Alliance (WECA), a 60-company interoperability board, has said Bluetooth standard will also be Wi-Fi-compatible. Why does this matter, and to whom? Essentially, WECA's members are banking on the network effect of having a multitude of interoperable wireless systems making the market for their products that much more powerful. WECA members include such networking and wireless powerhouses as Nokia (NYSE: NOK), Breezecom (Nasdaq: BRZE), AMD (NYSE: AMD), GRIC Communications (Nasdaq: GRIC), NEC (Nasdaq: NIPNY), Cisco (Nasdaq: CSCO), and Intersil (Nasdaq: ISIL). These companies, the remainder of the WECA members, and all of their suppliers have no small incentive for wanting settlement on a neutral standard. And the FCC action, if passed, will make it that much better. Networks with 54 mbps throughput capability are inherently more versatile for more data-intensive applications than ones limited to 11 mbps. In the coming months, the Institute for Electrical and Electronics Engineers (IEEE) will test the faster Wi-Fi standard to ensure that interference levels remain at an acceptable level. Should it find favorably, the FCC is expected to accept its finding. Bill Mann is the fella with the high-top fade. He owns shares of Nokia and Cisco. His stock holdings can be viewed online, as can The Motley Fool's disclosure policy.
RSS Headlines
Fool UK
