Analysis: iPhone and the emergence of convergence

My comrades, welcome to the great day of the grand unification! At last, all information will flow through the glorious Unity Pipeline to our homes and businesses! No more terrible decisions that rent nations apart, forced brother against brother, in choosing service plans!

As you all well recall, the Great Sundering of the 1980s was finally made right on the first day of the New Devolution, which we count from Dec. 29, 2006, starting as Year 1 A.T. (ante telephonum). Mere days later came the birth of the Perfect Device, what our beloved Jobs, may he be blessed in our memory, called the iPhone.

Today, the final pieces are in place. Our broadband data run at a magnificent trillion bits per second, and our telephony—sorry, telepathy, it’s so easy to slip into the old terminology—works wherever we are with every other human being. Not like there’s a choice. And we can receive 501 television channels! Such advances.

Let us raise our iPhone 9.0’s to the sky, and bow our heads in praise of AT&T&T, our Great American Telephone & Telegraph & Telepathy overlord.

OK, perhaps I exaggerate…

While the future may not turn out quite to be the dystopian vision I outline above, there’s a juggernaut of momentum toward convergence —the combination of different kinds of services into one lump, one bill, and one company offering it. The iPhone, announced by Steve Jobs in January and shipping this June, fits neatly into the new AT&T’s strategy in that regard.

Convergence as a broad term describes how voice and video are becoming just one more kind of data service, not unique services that need separate wires and equipment that’s handled differently than straight broadband. With a single cable to your home—whether phone wire, coaxial cable, or a fiber-optic strand—you can already get what formerly required three unique connections, if not more.

Let’s walk through what AT&T is attempting, what other U.S. and international firms have already deployed, and where the iPhone fits in.

Voice, by whatever means possible

Regardless of what we don’t know yet about the iPhone’s full range of features, we know it is a phone, and one of its most frequent uses will be placing calls.

Cell phone users’ top complaint is coverage within their homes. While airports, conference centers, colleges, and hotels have cut deals with cell carriers to put small antennas within their structures—in many cases, the cell carriers pay a hefty fee for the privilege—so far, our homes remain static-filled voids.

But tens of millions of households in the U.S. and hundreds of millions worldwide have Wi-Fi networks backed by broadband Internet connections. Couldn’t those networks be leveraged? You can buy IP phones that work over Wi-Fi, some of which now support Skype directly. However, those services are independent of other voice offerings you may have. If you cut the cord entirely and switch to a broadband telephone service provider such as Vonage, you still need a separate mobile plan.

The iPhone has Wi-Fi built in, but it's unclear if any third-party developers will have the opportunity to write add-on software for the iPhone to take advantage of it. That would leave Skype right out unless Skype’s parent company, eBay, strikes a deal. It also means all other VoIP tools could be off limits—including iChat AV.

What AT&T will likely adopt, perhaps with the iPhone being the first device to be part of the plan, is fixed-mobile convergence (FMC), which is the merger of calling systems that are fixed (through a landline or wired broadband service in the home) and mobile, as with cellular networks.

In an FMC network, you have a single handset or mobile device, a single bill, and a predicable set of charges for use. One of the earliest forms is known as unlicensed mobile access (UMA), and is already in use by T-Mobile in limited markets in the United States and BT (formerly British Telecom) in the UK.

With UMA, a handset has both a cellular radio and an “unlicensed” radio, the unlicensed referring to how Wi-Fi, Bluetooth, and other standards can use some frequency bands worldwide without restriction. UMA typically uses Wi-Fi.

In a UMA plan, a Wi-Fi network is just another cell tower, and you can place calls whether the handset is connected to your carrier’s network via cellular signals or Wi-Fi. The phone is constantly scanning for cell and Wi-Fi connections to allow handoffs. If you walk or drive out of range of one type, the handset seamlessly swaps you over to the other type without dropping the call.

In T-Mobile’s early U.S. rollout, available at this writing for sign-up only in Washington state, you have to pay for at least a $40-per-month voice plan to qualify for the UMA service, which they market as HotSpot@Home; and a special UMA handset.

You can use Wi-Fi minutes from the voice pool, or, for $20 more per month, get unlimited calling over Wi-Fi. That includes any calls that start on Wi-Fi networks, but excludes any that start on cell networks. You can hang up when you arrive home and place a new call, of course. (For family plans, T-Mobile starts at $50 for the cell plan for two lines and charges $20 per month for unlimited Wi-Fi on the first line and $5 per month for additional lines.)

T-Mobile also has 7,000 hot spots at Starbucks, airports, and other locations, from which unlimited Wi-Fi calls may be made. They hope to leverage their service with users who travel or frequent those spots.

This plan lets T-Mobile keep customers who make a lot of calls or who simply want better reception in their home. T-Mobile even offers a subsidized Wi-Fi router with two special features: one gives voice packets higher priority than other data (Wireless Multimedia or WMM); the other lets compliant handsets use much less power by requiring less unnecessary communication when no data is flowing (WMM Power Save).

For remote users who can get broadband in their homes, a cell connection may not even work, but they’d be able to place Wi-Fi calls with aplomb. (Industry estimates peg VoIP calls over Wi-Fi as costing about a penny a minute; cell calls cost more like a nickel a minute. So T-Mobile saves money, on average, for each new Wi-Fi user while gaining loyalty.)

AT&T’s leg up

The disadvantage to T-Mobile’s offering is that the quality of voice calls over Wi-Fi can be just as good or poor as Vonage or Skype, as T-Mobile offers no wireline broadband for sale in the U.S. HotSpot@Home—and any regular VoIP service—has to have its voice packets pass over whatever provider’s network you use and the Internet at large before reaching a gateway that puts the data out into the regular phone network.

This unpredictable path is why one Vonage call can be marvelous and the next sub-par. It’s also been a bone of contention over net neutrality: there’s plenty of suspicion that carriers and cable operators have purposely degraded VoIP services that pass over their networks.

AT&T would have a significant advantage if it moves into UMA or other flavors of FMC, because it has more than 10 million DSL subscribers. Because AT&T controls the termination of a DSL line that originates in the home, the company can split voice packets off before they hit the Internet.

AT&T also has thousands of hot spots in its AT&T FreedomLink network, giving them the same roaming advantage as T-Mobile. It currently sells FreedomLink for $2 per month to its DSL subscribers and $20 per month to others.

AT&T choosing to go this route isn’t an unlikely scenario: England’s monopoly incumbent BT just launched its full-on UMA offering in early January, but only to broadband DSL subscribers, for just this reason. BT OpenZone is the company’s UK-based network of a couple thousand public hot spots.

The iPhone already has Wi-Fi and cell. AT&T could take baby steps, offering Wi-Fi calling under a separate plan, similar to Vonage. But UMA is largely a matter of software; any hardware engineering could already be built into the iPhone. Nokia, Motorola, and Samsung all have UMA handsets being sold by T-Mobile or BT, so the technology is already well understood.

AT&T has already signaled some of the coming convergence: the company has announced its Unity calling plan in mid-January, which expands unmetered calling to cell users from mobile-to-mobile calls to the entire AT&T network of 100 million landline and cell subscribers. It’s a small step from that form of Unity to one that ties the hardware together, too.

The downside: the cost. To qualify for Unity, you pay for a $60 for 900-minute wireless plan or better and a $50 landline plan that includes unlimited long distance, voicemail, and other features. You also have to make a two-year wireless and one-to-two-year landline contract commitment. Still, break out all these bundles, and it’s probably a savings for most current landline/cell subscribers.

Everything on one device

The next step beyond converged calling is convergence of all devices. The grand vision that Cingular spelled out before the AT&T’s BellSouth acquisition—and one that Verizon Wireless has said it’s following—is one in which every device is network agnostic. (Technically, it’s called IMS or IP Multimedia System, and no two human beings on the planet define it identically.)

For instance, if you’re carrying a suspiciously small, touch-sensitive video player—a forthcoming device made by a company based in Cupertino, Calif., say—you could be watching streaming, on-demand video while riding a train home from work using the on-board Wi-Fi now showing up on many transit systems.

As you get off the train, the device switches, without noticeable stutter, to the high-speed cell network. The quality of the video drops down as does the audio, but it doesn’t drop. You walk home, your eyes still locked on the screen, and you step in the door, plop this mystery device in a dock attached to your high-definition television, and the service switches over to the 50 Mbps fiber connection to your home, and the video continues, but now in 1080p with 5.1 surround sound.

Sounds crazy, no? It’s not really that far away: each component is already readily available—several cell companies offer streaming video; MobiTV has TV over Wi-Fi hot spots; and all incumbents are pushing out television over fiber optic.

The real question is whether people are willing to hook up with a single carrier for the so-called quadruple play of voice, video/TV, broadband, and mobile from one company. The promise is cheaper and better; the companies themselves save a small fortune in billing and customer retention that they can pass along a portion of to the home user.

Closing thoughts

Will the iPhone become the Unity device of the future? There’s real potential. AT&T is wiring fiber-optic lines to neighborhood control points across its territory, in the hopes of delivering a competitor to cable and satellite TV—it owns the largest mobile carrier in the US; it owns more landlines than any other carrier; and it has more DSL customers than any other carrier.

iPhone could be something so far beyond what appears to be the coolest device ever designed by Apple and used for telephony. It could actually be the first device to fulfill the promise of convergence—the first device, that is, that hasn’t appeared exclusively in TV ads showing a glorious future.

[ Glenn Fleishman is a frequent Macworld contributor and blogs about wireless networking at Wi-Fi Networking News. ]

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