A glass-half-empty, half-full analysis
Although AT&T’s recently announced MicroCell femtocell service is still in the trial stage, uproar over its pricing has already erupted. After all, if a mobile operator’s network service coverage is poor in your home or office, why should it be up to you — and not the service provider — to foot the bill for making it better?
The same argument exists for commercial femtocell services already available from Verizon Wireless (dubbed Network Extender) and Sprint (Airave). It’s just a more colorful issue in the case of AT&T Mobility. The operator is prominently trying to find a backhaul-offload remedy for its 3G data network, now growing clogged in highly populated areas by high-bandwidth iPhone traffic.
In addition, AT&T is using its femtocell — currently being tested in Charlotte, N.C. — for both voice and 3G data, while its competitors are boosting circuit-switched voice signals only. AT&T is currently asking $150 for the femtocell, though the carrier has said that commercial pricing might vary. You also get a $100 rebate if you buy a $20-per-month unlimited calling service for calls made from your home.
What’s controversial about femtocell setups is that they make use of the wired backhaul connection you already have in place. So, on the one hand, the mobile operators are hitching a free ride on the last-mile connection that you and your Internet access provider pay for, rather than backhauling traffic to their core networks over their own airwaves and infrastructure. This situation has some people seeing red.
It seems absurd to charge the end customer $100 (Sprint), $150 (AT&T) or $249 (VZW) for the femtocell, which will allow in-home usage of a mobile phone and network service that have already been bought and paid for. Sprint also charges $5 a month to then use its Airave femtocell service.
Then again, femtocells kind of have to work this way because there simply isn’t enough licensed spectrum owned by a single operator to backhaul what could add up to gigabits of traffic from a neighborhood of residences each served by a femtocell. Each femtocell can support about 5Mbps per device across about 5,000 square feet of space. If there are 500 residents in a given area, they could generate about 2.5Gbps of data for backhauling. Not going to happen over cellular — 3G or 4G.
As such, femtocells need cables or municipal Wi-Fi for the backhaul. Since it makes no sense for your wireless carrier to run cabling to your premises because you want a femtocell to boost your wireless capacity indoors, what’s a mobile operator to do?
At least in the case of Sprint, it has quadruple-play partnerships with the big cable companies (among them Comcast, Time Warner and Cox). So if one of these entities is the last-mile provider, at least that it can turn around and sell a bundle of voice, data, video and wireless to the same customer. These ISPs are likely to be less sore at Sprint for backhauling a partner’s cellular-generated traffic over their cables than other ISPs who backhaul competitors’ traffic.
There’s another way to look at the situation. These days, home usage commonly entails multiple people sharing that last-mile connection using a variety of devices: Wi-Fi-enabled laptops or smart phones, for example, and set-top boxes.
Family members might be simultaneously downloading a movie, checking e-mail, playing an interactive Internet game and so forth. What difference does it make if one of those devices, instead of being a Wi-Fi enabled laptop or smartphone or a set-top box, is an iPhone? Regardless of what the access network internal to the home is — cellular, Wi-Fi or Ethernet — all that same traffic ends up on the ISP last-mile link, anyway (unless you have a UMA service from T-Mobile, which will backhaul your voice traffic over its cellular network).
On the other hand, it’s clear why some last-mile ISPs might be tempted to block traffic from the femtocell. This issue is being addressed at a higher level by the FCC, which has proposed making the blocking or degradation of a competitor’s traffic by an ISP (mobile or wired) illegal.
