[MLB-WIRELESS] wifi-cellular gateway

Tue Aug 26 15:27:59 EST 2003

Bridging Cellular and Wireless
Local area wireless and cellular networks will eventually appear to merge.
There's a nice business opportunity in making that possible.
By Rafe Needleman
<http://lw9fd.law9.hotmail.msn.com/cgi-bin/compose?mailto=1&msg=MSG106182624
9.13&start=105438&len=35140&src=&type=x&to=rafen%40rafeneedleman%2ecom&cc=&b
cc=&subject=&body=&curmbox=F000000001&a=dd1791b5f75e981cc37d05435d363a16> ,
August 25, 2003

Dear Readers: I am taking the month of September off for my honeymoon. I'll
be back in October, but my column will be put out by a different publisher,
so Thursday's column will be my last for Business 2.0. If you're an e-mail
subscriber to What's Next, you'll automatically receive the new column when
it starts. If you're not, but you'd like to be added to the mailing list,
please drop me a line: rafen at rafeneedleman.com. Thanks!

In April I hosted an event where four Wi-Fi
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=214be1976a4c8eef8e36545ec08fa
f90&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c14915%2c00%2ehtml>  companies pitched their business models to an
audience of venture capitalists
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=096601af6c374b9bf82ee2458596b
53e&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c193%2c00%2ehtml> . In August I handled a similar event for
cellular-application companies. Afterward I wondered, Did we really need two
different events?

FAST FACTS
BridgePort Networks
www.bridgeport-networks.com
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=265ed14d557f67198f2e656f5609d
b8a&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebridgeport%2dnetworks%2eco
m>
CEO
Tom Carter
HQ
Seattle
FOUNDED
February 2003
EMPLOYEES
10
FUNDING
Privately funded to date, currently raising $10 million venture round
PROFITABLE?
Projected for 2005
MARKET
Cellular/Wi-Fi integration

On the face of it, the answer is obvious: The cellular network is radically
different from the Wi-Fi network (if you can even call it that). Cellular
communication is routed by a few companies; Wi-Fi is a free-for-all.
Cellular data bandwidth
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=f1520c026445af3dc7b6c7b4c3708
437&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c4716%2c00%2ehtml>  is limited; Wi-Fi speed is generally very good.
Cellular's range is miles; Wi-Fi's is feet. And most important, companies
know how to bill for cellular. Wi-Fi billing is all over the map, from free
to absurdly expensive.

For wireless innovators, picking the underlying network is probably the most
critical decision. If we are to believe the latest projections, there will
soon be more cellular phone
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=dda3cea6e30fc1140fcebb86cbe57
8f1&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c3748%2c00%2ehtml>  on Earth than atoms in the universe, which will
certainly appeal to companies in the business of wireless apps. However, the
cellular value chain is largely controlled by stodgy cellular companies, and
it restricts businesses from reaching customers or making good money from
them; Wi-Fi has none of those limitations.

A few companies have tried to bridge the gap between Wi-Fi and cellular --
not with applications, but with infrastructure. Back in April I wrote about
two of them, ipUnplugged and Padcom. Both make it possible for a data
connection to stay alive as it hops from cellular to a local area network
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=e559dae58a2d57497abd0baa8a384
dbb&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c4420%2c00%2ehtml>  link. But data isn't the most important
battleground for the Wi-Fi/cellular connection. Voice is.

That's where an interesting startup, BridgePort Networks, comes in. This
company makes a gateway device that can transfer a cellular voice call to a
Wi-Fi connection (or vice versa). You can't currently buy a phone that
contains both a cellular and a Wi-Fi radio, but Motorola
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=81c7a359982ae15f49861d603630a
786&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c1660%2c6775%2c00%2ehtml>  ( MOT
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=607179cca5baf5330939b85edecb5
c3f&lat=1061872716&hm___action=http%3a%2f%2fqs%2emoney%2ecnn%2ecom%2fapps%2f
stockquote%3fsymbols%3dMOT> ), LG Electronics, and other companies are
working on such devices, and Texas Instruments ( TXN
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=1d101c7342175316dd9dd1153f7ad
670&lat=1061872716&hm___action=http%3a%2f%2fqs%2emoney%2ecnn%2ecom%2fapps%2f
stockquote%3fsymbols%3dTXN> ) has a PDA
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=75fb0fe7bafaaf7cfefc5aa088550
81c&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c1660%2c16565%2cFF%2ehtml>  concept code-named WANDA, for wireless
any-network digital assistant.

Given the differences between cellular and Wi-Fi, BridgePort's gateway has
to quickly accomplish a lot to manage the handoff from one network to
another. However, it's worth noting that when the cellular companies started
to roll out digital cellular on top of their analog networks, they built
some of this technology into their networks and dual-mode phones. The phones
could then make a second connection in the background so a call could
seamlessly hop from digital to analog midconversation. The cellular/Wi-Fi
phones will do a similar thing.

Once the handoff-technology issue is solved, though, the real challenge
emerges: billing and access control. The cellular carriers charge a lot for
a cellular call, because they own the airwaves and transmission equipment
and they subsidize phones that, without roaming agreements, can't work on
other networks. Not so with Wi-Fi: A Wi-Fi product can connect to any Wi-Fi
network. But the cellcos are surely looking at Wi-Fi as a great way to
offload traffic from their overloaded cellular equipment. So BridgePort and
the cellular companies will have to figure out a way to do handoffs based
not just on which available network has a better signal at the moment, but
also on the potentially complex economics surrounding equipment and network
ownership and the cost of using particular Wi-Fi connections.

Since Wi-Fi also reaches deep into office buildings, where cellular often
has problems, BridgePort's technology could be very attractive to enterprise
customers and thus to cellular carriers that serve them. I expect to see the
service and dual-mode phones first offered to businesses, not individuals.

And if dual-mode devices (phones, PDAs, and laptops
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=8f1eb9d79d3ae0b1329b84a980f7a
9b2&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c43297%2c00%2ehtml> ) do eventually get traction, BridgePort will
end up as a primo acquisition
<http://64.4.8.250/cgi-bin/linkrd?_lang=EN&lah=617a7c3654f3c978068880f396091
8b8&lat=1061872716&hm___action=http%3a%2f%2fwww%2ebusiness2%2ecom%2fwebguide
%2f0%2c%2c189%2c00%2ehtml>  candidate. Some cellular hardware companies,
like Motorola, are working on dual-mode equipment for the core of the
network, but others are sitting on the sidelines, waiting to see if this
trend has legs. Obviously, BridgePort is betting that it does. If the
company is right, it'll be snapped up by some cellular or networking company
that wasn't gutsy enough to make the bet when BridgePort was.
- Rafe Needleman <mailto:rafen at rafeneedleman.com>

What's Next: http://www.business2.com/whatsnext
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t>
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