MULETA URGES WIRELESS TO TAKE ON LONG DISTANCE, TV, RADIO
REDWOOD CITY, Cal. -- Silicon Valley investors should focus on wireless opportunities to take business away from older communications sectors like long distance, radio and TV, FCC Wireless Bureau Chief John Muleta told a financial conference here Wed. The old industries lack the relationships with individual customers, as opposed to premises that wireless has, with “big customer ownership implications,” Muleta said at Wireless Ventures 2004.
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“Intermodal competition” offers the big opportunity because all platforms will support all applications, so voice, for instance, becomes just another application, Muleta said. Many people overlook how critical operating systems and support functions will be in the new world of interchangeable platforms, he said. Investors also should take to heart a message he said he’s hearing from industry: Applications and customer equipment must be plug & play, digital, IP-centric and “cheap.”
No great shakeout of cellular carriers has occurred mainly because of their huge success in taking business from wireline carriers, rather than just fighting among themselves over an existing wireless business pie, Muleta said. This has had a “seismic effect,” as evidenced in intercarrier compensation, where the new reality has “blown that [traditional] model apart,” he said. Everything else being equal, investors should home in on opportunities for customer relationships and control, rather than operating at lower levels of the protocol stack, he said.
Investors should seek “unique, scalable applications” and avoid painting themselves in a corner through commitments to particular operating systems, Muleta said. “It’s a great industry,” he said of wireless: “Keep investing in it. If I had my druthers, it would be on the licensed side, but we'll talk about that.”
Pitches for new-technology spectrum use should feed into the FCC’s established priorities, Muleta said. Advocates should make a case that their proposals for spectrum policy flexibility will promote competition, and should demonstrate that real investments are being made in their technology and real incentives exist to create maximum value from the spectrum use, he said.
Asked about the Nextel spectrum controversy, Muleta said Verizon’s policy objections to the consensus swap plan Nextel supports “never really address” the underlying problem of shortcomings in public-service radio. Still, the FCC recognizes “there is some bootstrapping going on,” with Nextel seeking advantage from the situation, he said: “My bosses, I think, will make a decision soon. It adds excitement to my life to have Verizon come and beat me up every week.”
The advent of dedicated digital signal processing chips means “spectrum will not be a scarce resource per se” -- but the right to use spectrum remains a separate matter, Muleta said, so “we must have the right regime for the use of spectrum.”