How Much Better Does Any Competing Access Technology Have to Be?

There is a reason venture capitalists traditionally look for a new technology that is "10 times better than the existing technology." The reason it rarely is good enough for an innovation to be "twice as good" as the present alternatives is that competitors will respond, and keep innovating themselves, when challenges arise.

In many ways, that will be the challenge for TV white spaces. If if one assumes a cost advantage over mobile or fixed networks, it is not reasonable to assume the existing suppliers, and new competitors will stand still. Faced with new challenges, they will step up value propositions and cut prices. That narrow sthe advantage represented by the challenger.

Internet access in rural areas, supplied by TV white spaces, should be more affordable than mobile or a fixed network, and will almost certainly offer more bandwidth than a satellite provider.

The issue is whether the TV white spaces platform, used for rural Internet access, offers so much more value it can survive the expected competititve response.

There is no question there are advantages. The issue is whether, in the long run, the advantages are great enough to thrive, long term.

You might argue the advantage of using dynamic access (using TV white spaces or any other spectrum band) is efficiency.

“Most spectrum is unused in most places most of the time,” according to H Nwana, Dynamic Spectrum Alliance executive director. By using shared access, on a dynamic basis, “we can gain a substantial increase in available spectrum.

The efficiency gains come in areas other than better use of spectrum. “Reassignment of spectrum is hard, long, painful process,” said Nwana. “In the U.K, clearing TV channels took £40 million in compensation to moved users, and two to three years.”

So one way of looking at dynamic spectrum access is that it removes expense and time from the process of allowing new users of spectrum to be added, without disrupting existing licensees.

Where dynamic access also is paired with unlicensed access, it might be possible to offer Internet access that can be sold to end users for $2 to $5 per month, not $15 to $20 a month,” said Nwana.

From a flexibility standpoint, there are other related advantages. “You change the database and you change the frequency assignments. We love that,” said Nwana. “Auctions are controversial and  take time, while generating lawsuits.”

While acknowledging the role for mobile, Nwana also believes the economics of mobile Internet access are not sustainable. “The mobile industry has price points that are good for narrow coverage areas in developed nations, but those economics don’t work in Africa.”

Though some might contest the argument, Nwana argues it is “not possible” for mobile operators to sell access to users at a $5 to $10 average revenue per user.

That might be contestable. In India, for example, a 500 Mbyte mobile data plan costs about $3.40 a month. A smartphone to use such a plan might cost $248.

One can argue any access technology does not have to start out 10 times better. Maybe it only has to be better.