Raw Economics & Visible Future :

New Broadband Service Coming to United States, LightSquared

With a $7 billion investment, from hedge fund Harbinger Capital Partners, LightSquared has announced plans to build a coast-to-coast, wireless broadband network. A wholesale only service, based on a mix of terrestrial and satellite networks. They plan to have the system launched by late 2011 and cover 92% of the US by 2015.

In a telecom era noted for endless mergers and continuos consolidation, it is amazing to see new competition. It is equally extraordinary to see a telecom claiming that their network will be 100% Net Neutral.

It is a unique and intriguing business model: build out a backbone only network, at a wholesale price point, that would enable partners to add the last mile of connection, service and perhaps, device. A company like Apple could create their own network for the iPad. Delivering content via iTunes that is stored at their mysterious data center in North Carolina and never deal with AT&T, Verizon or Sprint.

The moderate sized telecoms, struggling to bust past the control of the big telecoms, such as T-Mobile or Virgin, could enter new regions and compete more directly with the Big Boys. Large retailers, especially those positioned in consumer electronics could offer complete services, bandwidth, mobile device and even content. All of these of these players could just as well partner in even more exotic hybrid offerings.

Municipalities and other local governments while attempting to offer their citizens broadband, seeing it as a critical infrastructure with utility pricing, have been delayed by persistent telecom lawsuits and political maneuvering. They could create their own network services based on the LightSquared network backbone, allowing them to ‘jump’ past the hegemony of the large telecoms.

The telecoms and cablecoms have wanted it all: backbone, last mile, content delivery and services. They are not happy with this new, competitive prospect. LightSquared will function as “a disruptive force” in US wireless “by democratizing wireless broadband services,” the firm’s new Chair and CEO Sanjiv Ahuja proclaimed on Tuesday.

If LightSquared is successful in this bold plan and any of these possibilities could come to pass, the broadband landscape could undergo a continental shift. New forms of services, new innovations and new business models could take place. This is the state of a none monopoly state of affairs, this is normal, this is how it should be.

Originally published in the Swiss online newspaper, www.zitig.ch, reedited for WholeThinking.

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