SEMINAR REPORT

ON

3G v/s Wi-Fi
SUBMITTED BY:

HARIPADA DEY
7th SEMESTER
REGD.NO: 0301101178
DEPT. OF ELECTRICAL ENGINEERING

DEPARTMENT OF
ELECTRICAL ENGINEERING
UNIVERSITY COLLEGE OF ENGINEERING
BURLA, SAMBALPUR, 768018.
 CONTENTS
Page no.

Introduction 1

Background of Wi-Fi and 3G 2

Working of 3G 5

Various types of 3G 6

Working of Wi-Fi 6

Examples of various Wi-Fi devices 7

How are they same 8

How they differ 10

Implications 13

Conclusion 18
3G vs Wi-Fi

INTRODUCTION
The two most important phenomena impacting
telecommunications over the past decade have been the explosive parallel
growth of both the internet and mobile telephone services. The internet
brought the benefits of data communications to the masses with email, the
Web, and eCommerce; while mobile service has enabled "follow-me-
anywhere/always on" telephony. The internet helped accelerate the trend
from voice-centric to data-centric networking. Data already exceeds voice
traffic and the data share continues to grow. Now, these two worlds are
converging. To realize the full potential of this convergence, however, we
need broadband access connections. What precisely constitutes "broadband"
is, of course, a moving target, but at a minimum, it should support data rates
in the hundreds of kilobits per second as opposed to the 50Kbps enjoyed by
80% of the internet users in the US who still rely on dial-up modems over
wireline circuits or the even more anemic 10-20Kbps typically supported by
the current generation of available mobile data services. While the need for
broadband wireless internet access is widely accepted, there remains great
uncertainty and disagreement as to how the wireless internet future will
evolve.
The goal of this article is to compare and contrast two technologies
that are likely to play important roles: Third Generation mobile ("3G") and
wireless Local Area Networks ("WLAN"). Specifically, we will focus on 3G
as embodied by the IMT-2000 family of standards versus the WLAN
technology embodied by the WiFi or 802.11b standard, which is the most
popular and widely deployed of the WLAN technologies. We use these
technologies as reference points to span what we believe are two
fundamentally different philosophies for how wireless internet access might
evolve. The former represents a natural evolution and extension of the
business models of existing mobile providers. These providers have already
invested billions of dollars purchasing the spectrum licenses to support
advanced data services and equipment makers have been gearing up to
produce the base stations and handsets for wide-scale deployments of 3G
services. In contrast, the WiFi approach would leverage the large installed
base of WLAN infrastructure already in place.
In focusing on 3G and WiFi, we are ignoring many other
technologies that are likely to be important in the wireless internet such as
satellite services, LMDS, MMDS, or other fixed wireless alternatives. We
also ignore technologies such as BlueTooth or HomeRF which have at times
been touted as potential rivals to Wifi, at least in home networking
environments.

Speaking broadly, 3G offers a vertically-integrated, top-down,

service-provider approach to deliver wireless internet access; while WiFi
offers (at least potentially) an end-user-centric, decentralized approach to
service provisioning. Although there is nothing intrinsic to the technologies
dictating that one may be associated with one type potential tensions
between these two alternative world views.
We believe that the wireless future will include a mix of
heterogeneous of industry structure or another, we use these two
technologies to focus our speculations on the wireless access technologies.
Moreover, we expect that the two worldviews will converge such that
vertically-integrated service providers will integrate Wifi or other WLAN
technologies into their 3G or wireline infrastructure when this makes sense.

BACKGROUND ON WIFI AND 3G

3G

3G is a technology for mobile service providers. Mobile

services are provided by service providers that own and operate their own
wireless networks and sell mobile services to end-users, usually on a
monthly subscription basis. Mobile service providers use licensed spectrum
to provide wireless telephone coverage over some relatively large
contiguous geographic serving area. Historically, this might have included a
metropolitan area. Today it may include the entire country. From a user’s
perspective, the key feature of mobile service is that it offers (near)
ubiquitous and continuous coverage. That is, a consumer can carry on a
telephone conversation while driving along a highway at 100 Km/hour. To
support this service, mobile operators maintain a network of interconnected
and overlapping mobile base stations that hand-off customers as those
customers move among adjacent cells. Each mobile base station may
support users up to several kilometers away. The cell towers are connected
to each other by a backhaul network that also provides interconnection to the
wireline Public Switched Telecommunications Network (PSTN) and other
services. The mobile system operator owns the end-to-end network from the
base stations to the backhaul network to the point of interconnection to the
PSTN (and, perhaps, parts thereof).
The first mobile services were analog. Although mobile
services began to emerge in the 1940s, the first mass market mobile services
in the U.S. were based on the AMPS (Advanced Mobile Phone Service)
technology. This is what is commonly referred to as first generation
wireless. The FCC licensed two operators in each market to offer AMPS
service in the 800-900MHz band. In the 1990s, mobile services based on
digital mobile technologies ushered in the second generation (2G) of
wireless services that we have today. In the U.S., these were referred to as
Personal Communication Systems (PCS) and used technologies such as
TDMA (Time Division Multiple access), CDMA (Code Division Multiple
access) and GSM (Global System for Mobile Communications). From 1995
to 1997, the FCC auctioned off PCS spectrum licenses in the 1850 to 1990
MHz band. CDMA and TDMA were deployed in the various parts of the
U.S., while GSM was deployed as the common standard in Europe.The chief
focus of wireless mobile services has been voice telephony. However, in
recent years there has been growing interest in data services as well. While
data services are available over AMPS systems, these are limited to quite
low data rates (<10Kbps). Higher speed data and other advanced telephone
services are more readily supported over the digital mobile 2G systems. The
2G systems also support larger numbers of subscribers and so helped
alleviate capacity problems faced by older AMPS systems in more
congested environments. Nevertheless, the data rates supportable over 2G
systems are still quite limited, offering only between 10-20Kbps. To expand
the range and capability of data services that can be supported by digital
mobile systems, service providers will have to upgrade their networks to one
of the 3G technologies. These can support data rates of from 384Kbps up to
2Mbps, although most commercial deployments are expected to offer data
rates closer to 100Kbps in practice. While this is substantially below the
rates supported by the current generation of wireline broadband access
services such as DSL or cable modems, it is expected that future upgrades to
the 3G or the transition to 4G mobile services will offer substantially higher
bandwidths. Although wireline systems are likely to always exceed the
capacity of wireless ones, it remains unclear precisely how much bandwidth
will be demanded by the typical consumer and whether 3G services will
offer enough to meet the needs of most consumers.

WI-FI

WiFi is the popular name for the wireless Ethernet 802.11b

standard for WLANs. Wireline local area networks (LANs) emerged in the
early 1980s as a way to allow collections of PCs, terminals, and other
distributed computing devices to share resources and peripherals such as
printers, access servers, or shared storage devices. One of the most popular
LAN technologies was Ethernet. Over the years, the IEEE has approved a
succession of Ethernet standards to support higher capacity LANs over a
diverse array of media. The 802.11x family of Ethernet standards is for
wireless LANs. WiFi LANs operate using unlicensed spectrum in the
2.4GHz band. The current generation of WLANs support up to 11Mbps
data rates within 300 feet of the base station. Most typically, WLANs are
deployed in a distributed way to offer last-few-hundred-feet connectivity to
a wireline backbone corporate or campus network.Typically, the WLANs
are implemented as part of a private network. The base station equipment is
owned and operated by the end-user community as part of the corporate
enterprise network, campus or government network. In most cases, use of
the network is free to end-users (subsidized by the community as a cost of
doing business, like corporate phones). Mobilestar, which declared
bankruptcy during thelatter half of 2001, was one of the leaders in this area.
In addition, there is a growing movement of so-called "FreeNets" where
individuals or organizations are providing open access to subsidized WiFi
networks.
In contrast to mobile, WLANs were principally focused on
supporting data communications. However, with the growing interest in
supporting real-time services such as voice and video over IP networks, it is
possible to support voice telephony services over WLANs.
HOW DOES 3G WORK?

3G chops each call or transmission into little packets of data,

marking each one with an individual code to show which connection it
belongs to. This is a much more efficient way oftransmitting data, allowing
3G networks to deliver larger files – like pictures and even video – at much
faster speed.

THE VARIOUS TYPES OF 3G

There is currently no single global 3G standard, but the

principal technologies of 3G include WCDMA which has been chosen for
3G mobile phone systems in Europe, Asia and the US. It first converts raw
data into a narrowband digital radio signal and then attaches a marker or
spreading code to each data packet to identify it as belonging to a particular
communication. CDMA was first introduced in 1995, and works in similar
fashion. Many of the leading operators are currently creating CDMA
networks. CDMA phones have longer standby times than current models,
and in-built reverse compatibility means that over 100 million customers
worldwide who already use CDMA can easily upgrade to newer
models.CDMA2000 1xEV-DO provides ‘always-on’ packet data
connection, like landline-based broadband, for more convenient mobile
internet use. EDGE is the technology that allows existing GSM networks to
provide 3G services.

HOW Wi-Fi WORKS?

Typical Wi-Fi setup contains one or more Access Points (APs) and one
or more clients. An AP broadcasts its ssid (Service Set Identifier,
"Network name") via packets that are called beacons, which are
broadcast every 100 ms. The beacons are transmitted at 1 Mbit/s, and
are of relatively short duration and therefore do not have a significant
influence on performance. Since 1 Mbit/s is the lowest rate of Wi-Fi it
assures that the client who receives the beacon can communicate at
least 1 Mbit/s. Based on the settings (e.g. the SSID), the client may
decide whether to connect to an AP. Also the firmware running on the
client Wi-Fi card is of influence. Say two APs of the same SSID are in
 range of the client, the firmware may decide based on signal strength to
which of the two APs it will connect. The Wi-Fi standard leaves
connection criteria and roaming totally open to the client. This is a
strength of Wi-Fi, but also means that one wireless adapter may
perform substantially better than the other. Since Wi-Fi transmits in the
air, it has the same properties as a non-switched ethernet network. Even
collisions can therefore appear like in non-switched ethernet LAN's.

Examples of Wi-Fi Devices

Wireless Access Point (WAP)

A wireless access point (AP) connects a group of wireless

stations to an adjacent wired local area network (LAN). AP is similar to
an ethernet instead of relaying LAN data only to other LAN stations, an
Ap can relay wireless data to all other compatible wireless

Wireless Routers

A wireless router connects a group of Wi-Fi-enabled devices (i.e.

PDAs, laptops, etc.) to an adjacent wired network (such as a cable modem or
DSL modem). A wireless router is a wireless access point combined with an
ethernet hub. A wireless router forwards IP packets between your wireless
subnet and any other subnet.

HOW WI-FI AND 3G SAME

A. Both are wireless

Both technologies are wireless which (1) avoids need to install
cable drops to each device when compared to wireline alternatives; and (2)
facilitates mobility. Avoiding the need to install or reconfigure local
distribution cable plant can represent a significant cost savings, whether it is
within a building, home, or in the last mile distribution plant of a wireline
service provider. New base stations are added as more users in the local area
join the wireless network and cells are resized. Wireless infrastructure may
be deployed more rapidly than wireline alternatives to respond to new
market opportunities or changing demand. Wireless technologies also
facilitate mobility. This includes both (1) the ability to move devices around
without having to move cables and furniture; and (2) the ability to stay
continuously connected over wider serving areas. We refer to the first as
local mobility and this is one of the key advantages of WLANs over
traditional wireline LANs. The second type of mobility is one of the key
advantages of mobile systems such as 3G. WLANs trade the range of
coverage for higher bandwidth, making them more suitable for "local hot
spot" service. In contrast, 3G offers much narrower bandwidth but over a
wider calling area and with more support for rapid movement between base
stations.Although it is possible to cover a wide area with WiFi, it is most
commonly deployed in a local area with one or a few base stations being
managed as a separate WLAN. In contrast, a 3G network would include a
large number of base stations operating over a wide area as an integrated
wireless network to enable load sharing and uninterrupted hand-offs when
subscribers move between base stations at high speeds. This has
implications for the magnitude of initial investment required to bring up
WLAN or 3G wireless service and for the network management and
operations support services required to operate the networks.

B. Both are access technologies

Both 3G and WiFi are access or edge-network technologies.
This means they offer alternatives to the last-mile wireline network. Beyond
the last-mile, both rely on similar network connections and transmission
support infrastructure. For 3G, the wireless link is from the end-user device
to the cell base station which may be at a distance of up to a few kilometers,
and then dedicated wireline facilities to interconnect base stations to the
carrier's backbone network and ultimately to the internet cloud. The local
backhaul infrastructure of the cell provider may be offered over facilities
owned by the wireless provider (e.g., microwave links) or leased from the
local wireline telephone service provider (i.e., usually the incumbent local
exchange carrier or ILEC). Although 3G is conceived of as an end-to-end
service, it is possible to view it as an access service. For WiFi, the wireless
link is a few hundred feet from the end-user device to the base station. The
base station is then connected either into the wireline LAN or enterprise
network infrastructure or to a wireline access line to a carrier's backbone
network and then eventually to the internet. For example, WiFi is
increasingly finding application as home LAN technology to enable sharing
of DSL or cable modem residential broadband access services among
multiple PCs in a home or to enable within-home mobility. WiFi is generally
viewed as an access technology, not as an end-to-end service.

C. Both offer broadband data service

Both 3G and WiFi support broadband data service, although as
noted earlier, the data rate offered by WiFi (11Mbps) is substantially higher
than the couple of 100 Kbps expected from 3G services. Although future
generations of wireless mobile technology will support higher speeds, this
will also be the case for WLANs, and neither will be likely to compete with
wirelinespeeds (except over quite short distances).The key is that both will
offer sufficient bandwidth to support a comparable array of services,
including real-time voice, data, and streaming media, that are not currently
easily supported over narrowband wireline services. (Of course, the quality
of these services will be quite different as will be discussed further below.)
In this sense,both support "broadband" where we define this as "faster than
what we had before." Both services will also support "always on"
connectivity which is another very important aspect of broadband service.
Indeed, some analysts believe this is even more important than the raw
throughput supported.

HOW THEY ARE DIFFERENT

A. Current business models/deployment are different.

As noted above 3G represents an extension of the mobile service
provider model. This is the technology of choice for upgrading existing
mobile telephone services to expand capacity and add enhanced services.
The basic business model is the telecommunications services model in
which service providers own and manage the infrastructure (including the
spectrum) and sell service on that infrastructure. In contrast, WiFi comes out
of the data communications industry (LANs) which is a by-product of the
computer industry.
While WiFi can be used as an access link, it has not theretofore
been thought of as an end-to-end service. Typically, the users of WiFi
networks are not charged directly for access. Service is provided free for the
closed user-community (i.e., employees of the firm, students at the
university), with the costs of providing wireless access subsidized by the
firm or university. More recently participants in the FreeNet movement are
setting up WFi base stations and allowing open access to any users with the
suitable equipment to access the base station i.e., just an 801.11b PC card in
a laptop).
In addition to the FreeNet movement, there are a number of
service providers now looking at using WiFi as the basis for wireless access
over broad geographic areas. Most recently, the hairman and founder of
Earthlink (one of the largest ISPs in the U.S.), Sky Dayton formed a new
wireless ISP called Boingo. With respect to deployment, 3G will require
substantial investment in new infrastructure to upgrade existing 2G
networks, however, when deployed by an existing mobile provider, much of
the 2G infrastructure (e.g., towers and backhaul network) will remain
useable. For WiFi, it is hoped that deployment can piggy-back on the large
existing base of WLAN equipment already in the field.
In contrast to 3G, WiFi Wireless access can emerge in a
decentralized, bottom-up fashion. Alternative approaches that are under
research consideration (i.e., not commercially viable today) include using
some form of micro- payments (e.g., eCash or credit card billing). It is also
well-known that consumers have a demonstrated preference for flat rate
billing, which may cause problems in a decentralized WiFi provisioning
model. If backhaul costs are traffic variable (e.g.,suppose rate for Internet
connection from base station to cloud varies with traffic), then offering flat
rate service may be perceived as too risky for the base station owner.
B. Spectrum policy and management
One of the key distinctions between 3G and WiFi that we have
only touched upon lightly thus far is that 3G and other mobile technologies
use licensed spectrum, while WiFi uses unlicensed shared spectrum. This
has important implications for (1) Cost of service; (2) Quality of Service
(QoS) and Congestion Management; and (3) Industry structure.
First, the upfront cost of acquiring a spectrum license represents
a substantial share of the capital costs of deploying 3G services. This cost is
not faced by WiFi which uses the shared 2.4Ghz unlicensed, shared
spectrum. The cost of a spectrum license represents a substantial entry
barrier that makes it less likely that 3G services (or other services requiring
licensed spectrum) could emerge in a decentralized fashion. Of course, with
increased flexibility in spectrum licensing rules and with the emergence of
secondary markets that are being facilitated by these rules, it is possible that
the upfront costs of obtaining a spectrum license could be shared to allow
decentralized infrastructure deployment to proceed. In the face of rapid
technical progress, changing supply and demand dynamics, this lack of
flexibility increased the costs and reduced the efficiency of spectrum
utilization. High value spectrum trapped in low value uses could not be
readily redeployed. With the emergence of secondary markets, it would be
possible for spectrum brokers to emerge or service integrators that could
help distribute the spectrum cost to enable decentralized infrastructure
investment for licensed spectrum.
Second, while licensed spectrum is expensive, it does have the
advantage of facilitating QoS management. With licensed spectrum, the
licensee is protected from interference from other service providers. This
means that the licensee can enforce centralized allocation of scarce
frequencies to adopt the congestion management strategy that is most
appropriate. In contrast, the unlicensed spectrum used by WiFi imposes
strict power limits on users (i.e., responsibility not to interfere with other
users) and forces users to accept interference from others. This makes it
easier for a 3G provider to market a service with a predictable level of
service and to support delay-sensitive services such as real-time telephony.
In contrast, while a WiFi network can address the problem of congestion
associated with users on the WiFi network, it cannot control potential
interference from other WiFi service providers or other RF sources that are
sharing the unlicensed spectrum (both of which will appear as elevated
background noise). This represents a serious challenge to supporting delay-
sensitive services and to scaling service in the face of increasing competition
from multiple and overlapping multiple service providers.
C. Status of technology development different.
The two technologies differ with respect to their stage of
development in a number of ways. These are discussed in the following
subsections.
1. Deployment Status
While 3G licenses have been awarded in a number of markets at a
cost of billions of dollars to the licensees, we have seen only limited
progress with respect to service deployment. Indeed, many of the licensees
have seen their market values drop precipitously as a consequence of the
high costs of obtaining the licenses, increased cost of deployment
expectations, and diminished prospects for short-term revenue. In contrast,
we have a large installed base of WiFi networking equipment that is growing
rapidly as WiFi vendors have geared up to push wireless home networks
using the technology. The commoditization of WiFi equipment has
substantially lowered prices and simplified the installation and management
of WiFi networks, making it feasible for non-technical home users to self-
install these networks. However, although there a large installed base of
WiFi equipment, there has been only limited progress in developing the
business models and necessary technical and business infrastructure to
support distributed serving provisioning. In addition, many of the pioneers in
offering wireless access services such as Mobilstar and Metricom went
bankrupt in 2001 as a consequence of the general downturn in the telecom
sector and the drying up of capital for infrastructure investment.
2. Embedded Support for Services
Another important difference between 3G and WiFi is their
embedded support for voice services. 3G was expressly designed as an
upgrade technology for wireless voice telephony networks, so voice services
are an intrinsic part of 3G. In contrast, WiFi provides a lower layer data
communications service that can be used as the substrate on which to layer
services such as voice telephony. For example, with IP running over WiFi it
is possible to support Voice-over-IP telephony. Another potential advantage
of 3G over WiFi is that 3G offers better support for secure/private
communications than does WiFi. However, this distinction may be more
apparent than real. First, we have only limited operational experience with
how secure 3G communications are. Hackers are very ingenious and once
3G systems are operating, we will find holes that we were not previously
aware of. Second, the security lapses of WiFi have attracted quite a bit of
attention and substantial resources are being devoted to closing this gap.

3. Standardization

It is also possible to compare the two technologies with respect to

the extent to which they are standardized. Broadly, it appears that the formal
standards picture for 3G is perhaps more clear than for WLAN. For 3G,
there is a relatively small family of internationally sanctioned standards,
collectively referred to as WCDMA. However, there is still uncertainty as to
which of these (or even if multiple ones) will be selected by service
providers. In contrast, WiFi is one of the family of continuously evolving
802.11x wireless Ethernet standards, which is itself one of many WLAN
technologies that are under development. Although it appears that WiFi is
emerging as the market winner, there is still a substantial base of HomeRF
and other open standard and proprietary technologies that are installed and
continue to be sold to support WLANs. Thus, it may appear that the
standards picture for WLANs is less clear than for 3G, but the market
pressure to select the 802.11x family of technologies appears much less
ambiguous – at least today.
IMPLICATIONS

A.WiFi is good for competition

One implication that emerges from the above analysis is that
success of WiFi Wireless local access alternatives is likely to be good for
local competition.
First, if only 3G survives, then it is less likely that we will see
non-vertically-integrated, decentralized service provisioning. And, the
higher entry costs associated with acquiring licensed spectrum and the need
to construct a geographically-larger network to begin offering service will
limit the number of firms that compete in the market. Of course, this does
not mean that wireless access services would not be competitive – there may
be more than enough competition among existing mobile providers to
preclude the exercise of market power. However, there is also the possibility
that the few 3G providers will become fewer still through mergers, and when
coupled to the market power of wireline local exchange carriers, this could
provide a powerful nexus for the continuation of monopoly power in last
mile facilities. Obviously, he firms that have a potential opportunity to
establish such market power – the mobile providers and the local exchange
carriers (that own asignificant share of the mobile operators) – have a
powerful incentive to collude to establish monopoly control over mixed
wireless and wireline services.
Second, if both 3G and WiFi survive, then the diversity of viable
networking infrastructure strategies will be conducive to greater facilities-
based competition. Third, success of the WiFi service model could help
unlock the substantial investment in private networking infrastructure that
could be used as the basis for constructing an alternative infrastructure to the
PSTN and cable wireline networks. As noted above, this will require adding
the necessary business functionality and technical support to enable base
station owners to bill for WiFi service. Once this is developed, the
opportunity to create novel new ways to leverage the existing infrastructure
investment will be increased. Fourth, if only the WiFi service model
survives, then we would expect this to be inherently more competitive
because of the lower entry barriers for setting up local access services. The
use of unlicensed spectrum means that property rights over the spectrum
cannot be used to exclude potential entrants, although congestion – if not
appropriately managed – could be just as effective in limiting competition.
However, at the margin, the threat of competitive entry would limit the
ability of any single or small group of providers establishing bottleneck
control over the last mile wireless access infrastructure. Of course, since the
WiFi model does depend on wireline infrastructure to connect to the internet
backbone, it is possible that wireline carriers could effectively leverage their
control over wireline access facilities to adversely affect wireless access
competition. Since many of the largest mobile service providers are
affiliated with wireline providers, there is likely to be an incentive to
discriminate against WiFi carriers if these are seen as competitors to either
3G or wireline services. Fifth, the more flexible nature of the WiFi model
means that it can seed a more complex array of potential business models
that could fuel competition both at the retail level in services and at the
wholesale level in alternative infrastructure. For example, WiFi could
emerge as an extension of FreeNets, transmogrified into user-subsidized
community networks, or via third party aggregators such as Boingo. These
networks could be in direct competition to 3G services. Another alternative
might be for WiFi to be used as the last few hundred feet access technology
for alternative local loop facilities (e.g., a municipally-owned fiber network).
In this mode, WiFi could reduce the deployment costs of over builders. A
more generalized version of this scenario is any form of subsidized
deployment, where the entity subsidizing creation of the WiFi net might be a
university (campus net), a government entity (municipal net), or a business
(enterprise net). The lower costs of deploying wireless as compared to
installing new wireline cabling plant may make reduce the adoption costs of
such a strategy, thereby increasingly the likelihood of their adoption.

B.WiFi and 3G can complement each other for a mobile provider

Yet another alternative might be for WiFi integrated into 3G type
networks. Actually, this seems like the most likely scenario since there are
compelling reasons for why these two technologies may be used together.
Each of the technologies has distinct advantages over the other that would
allow each to offer higher quality services under disparate conditions.
Putting the two together would allow a service provider to offer a wider set
of more valuable services. The obvious adopter of such a strategy would be
a mobile firm since it is easier for 3G to adopt WiFi and incorporate it into
its networking strategy than for a WiFi facilities provider to go the other
way. The reasons for this are several. First, there is the asymmetry in entry
costs discussed earlier. Integrating 3Gand WiFi networks provides the
opportunity to offer both ubiquitous coverage with good voice telephony
support (still the killer app for interactive communication networks) while
providing local "hot spot" connectivity in high demand areas (airports,
hotels, coffee shops) or in areas where existing WiFi facilities may be
opportunistically taken advantage of (malls, multi-tenant office campuses).
The hot spot connectivity would be attractive to offset the capacity
limitations of 3G. The 3G mobile billing and wide-area network
management (e.g., homing, hand-off control, authentication, resource
allocation/management, etc.) capabilities could address some of the
shortfalls that are limiting the capability of WiFi to evolve into a platform
for mass wireless access. Adopting such a strategy would offer the mobile
provider the opportunity to tap new service markets. For example, allow
scheduled high speed file transfers (e.g., queue email with big attachments
for downloading when opportunistically near WiFi hotspot); or, allow more
adaptive power management strategies (e.g., switch from WiFi to 3G service
to conserve battery power with more graceful performance degradation, or
vice versa if external power becomes available). These and other services
could increase the revenue opportunities available to the wireless service
provider. Additionally, adopting such a strategy would be defensive. Co-
opting the competition is a well known strategy. If WiFi succeeds, then 3G
networks that fail to implement WiFi-like functionality will lose service
revenues to WFi enabled competitors.
On the other hand, integrating Wi Fi into a 3G network
may increase deployment costs. The business/service model will be more
complex and many adjustments will be required within mobile firms. When
set against the potential revenue benefits, however, these higher
coordination/adjustment costs do not seem likely to be overly substantial.
C. Spectrum Policy is Key
Obviously, spectrum policy has already had and will continue to
have a critical role to play in how our wireless future evolves. One of the
key distinguishing features between 3G and WiFi is the use of licensed
versus unlicensed spectrum. Continued progress towards creating secondary
spectrum markets will benefit both 3G and WiFi models. For 3G, secondary
markets would allow more flexible management of property rights.
Secondary markets would allow spectrum to be reallocated more flexibly to
higher value uses and could improve dynamic efficiency. For example, to
balance localized supply and demand mismatches. For WiFi, the emergence
of spectrum markets may make it possible to adopt a suitable mechanism for
addressing congestion issues. Of course, if implemented in the unlicensed
band where WiFi currently operates, this would require additional policy
changes to implement a market-based resource allocation process. The
appropriate protocols and institutional framework for supporting such a
market is an interesting topic for research. It may be easier to implement
such a mechanism in a WLAN technology that could operate in a licensed
band where there are clear property rights.

D. Success of WiFi is potentially good for multimedia content

Multimedia content benefits from higher bandwidth services so
the ability to support higher speed Wireless access may help encourage the
development of broadband multimedia content. On the other hand, the lack
of a clear business model for deploying broadband services over a WiFi
network may raise concerns for how content would be paid for and/or digital
rights management issues. The digital rights management issues are perhaps
more difficult to control (from a content provider's perspective) in a more
decentralized, end-user centric environment than in a centralized service
provider network (i.e., contrast Napster to AOL). The vertical integration
model of 3G may offer greater control which might actually encourage more
content production. This is a complex question that merits additional
thought. It is premature to posit which of the two effects are likely to be
larger.
E. Technical Progress Favors Heterogeneous Future
Technical progress in wireless services favors a heterogeneous
wireless future. There are several reasons for this.
First, with each technology, the rapid pace of innovation means
that multiple generations of each technology co-exist in the network at the
same time. Coupled to this heterogeneity, there is the on-going competition
among alternative wireless technologies. All of these share common benefits
so to a certain extent, all benefit from advances in basic elements such as
modulation techniques, smart antenna design, power management and
battery technology, and signal processing technology. However, because the
different technologies have asymmetric problems, basic advances affect
them differently. For example, the success of the IP suite of protocols rests
in large part in their ability to support interoperable communications across
heterogeneous physical and network infrastructures. Analogously,
developments in wireless technology will favor the coexistence of
heterogeneous wireless access technologies. One of the more important
developments will be Software Defined Radio (SDR). SDR does a number
of important things. First, it makes it easier to support multiple wireless on a
common hardware platform.
Second, it makes upgrades easier and more flexible to
implement since it substitutes software for hardware upgrades. Third, it
facilitates new and more complex interference management techniques.
These are useful for increasing the utilization of spectrum. The implication
of all this for WiFi-like strategies appears clear. It improves the likelihood
that WiFi will emerge as a viable model. This is further enhanced because
the success of WiFi will, perforce, require additional technical progress to
resolve some of the issues already discussed (e.g., security, QoS
management, service billing). The implications for 3G are perhaps
somewhat less clear. The 3G approach is similar to other telecommunication
standards approaches (e.g., ISDN, ATM, etc.): it is most successful when it
is monolithic. The centralized, top-down approach to network deployment is
more vulnerable and less adaptive to decentralized and independent
innovations. service providers, end-users, and policy makers should not
expect to see a simple wireless future.
Third, we expect 3G mobile providers to integrate WiFi
technology into their networks. Thus, we expect these technologies to be
complementary in their most successful mass market deployments.
fourth, we also expect WiFi offer competition to 3G providers
because of the lower entry costs associated with establishing WiFi networks.
This may take the form of new types of service providers (e.g., Boingo), in
end-user organized networks (e.g., FreeNet aggregation or municipal
networking), or as a low-cost strategy for a wireline carrier to add wireless
services. The threat of such WiFi competition is beneficial to prospects for
the future of last mile competition, and will also encourage the adoption of
WiFi technology by 3G providers as a defensive response.

CONCLUSIONS

This article offers a qualitative comparison of two wireless

technologies that could be viewed simultaneously as substitute and/or
complementary paths for evolving to broadband wireless access. The two
technologies are 3G, which is the preferred upgrade path for mobile
providers, and WiFi, one of the many WLAN technologies. The goal of the
analysis is to explore two divergent world views for the future of
wirelessand to speculate on the likely success and possible interactions
between the two technologies in the future.
While the analysis raises more questions than it answers, several
preliminary conclusions appear warranted. First, both technologies are likely
to succeed in the marketplace. This means that the wireless future will
include heterogeneous access technologies so equipment manufacturers,
service providers, end-users, and policy makers should not expect to see a
simple wireless future. Second, we expect 3G mobile providers to integrate
WiFi technology into their networks. Thus, we expect these technologies to
be complementary in their most successful mass market deployments.Third,
we also expect WiFi offer competition to 3G providers because of the lower
entry costs associated with establishing WiFi networks. Our analysis also
suggested a number of areas where further thought and research would be
beneficial. These include the obvious questions of how to integrate 3G and
WiFi networks or how to add the appropriate billing/resource negotiation
infrastructure to wifi to allow it to become a wide-area service provider
platform. These also include several more remote questions such as which
style of technology/business approach is favored by the rapid pace of
wireless technology innovation or which is more likely to favor the
development of complementary assets such as broadband content.