UNLICENSED INNOVATION:
`
`THE CASE OF WI-FP
`
`WOLTER LEMSTRA and VIC HAYES“
`
`
`
`Abstract
`
`In thispaper we describe thegenesis and development of Wi-Fi as a combined result
`offl) a change in the US communications radio spectrum policy in the 19805, (2) the
`industry leadership provided by NCR, its corporate successors and collaborators, to
`create a global standard and to deliver compatible products under the Wi-Fi label,
`and (3) the influence ofthe users that moved the application of Wireless-LAstrom
`the enterprise to the home, from indoor to outdoor use, from a communications
`product to a communications service, andfrom operators to end-users as the pro-
`vider of that service. In concluding we assess the implications of this casefor the
`formation ofgovernment policy andfirm strategy. The case exploration and analy—
`sis is based on contributions by experts from the field, having been involved :first
`hand’ in the innovation journey of Wi—Fi.
`
`Keywords: WLAN; IEEE 802.11; Wi—Fi; spectrum policy; firm strategy; sources of
`innovation; technology diffusion
`
`1.
`
`INTRODUCTION
`
`To-day, Wi-Fi has become the preferred means for connecting to the Internet — with-
`out wires: at home, in the oflice, in hotels, at airports, at the university campus.
`
`This paper draws upon a research project being executed within the Faculty Technology, Policy and
`Management at the Delft University of Technology ('l'UDelft} aimed at documenting the genesis
`and development of Wi-Fi. This is a multi-disciplinary and multi-national research project with a
`wide range of contributions from the academic community and the industry at large.
`The authors like to thank the participants of the European Communication Policy Research
`(EuroCPR) conference for the feedback on an earlier version of this paper, in particular Johannes
`Bauer, Martin Fransman, Anders Henten, Eli Noam, and Jean Paul Simon.
`
`Dr. Ir. Wolter Lemstra and lng, Vic Hayes are Senior Research Fellow at the Section Economics of
`infrastructures at the Faculty Technology, Policy and Management of the TUDelft. in their aca—
`demic work they leverage extensive experience at the supply side of the communication industry.
`
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`Wolter Lemstra and Vic Hayes
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`Increasingly Wi-Fi provides access to the Internet for remote communities in devel-
`
`oping countries, e.g. in the Himalayan mountains and in the Andes. Even in rural
`areas of developed countries, for instance, in Denmark a community based Wi-Fi
`initiative emerged to provide broadband wireless Internet access, as the incumbent
`operator failed to extend the infrastructure to less profitable areas in a timely man-
`ner.
`
`This is a remarkable result as wireless local area networking [WLAN) was not on
`the radar screen ofthe US Federal Communication Commission (FCC) when in 1980
`
`it initiated a market assessment that would lead to its landmark decision of 1985,
`
`whereby it decided to open up three radio frequency bands designated for Industrial,
`Scientific and Medical (ISM) applications for the use by radio communication sys-
`tems, including WLANs.
`
`In hindsight, this should not come as a surprise. The Ethernet, which woald
`
`become the standard for wired-LANs, was still subject ofa major standardization bat—
`tle within the IEEE in 1980. Moreover, recall that the Apple II had been launched in
`1977, while the IBM PC would be introduced in 1981, and the Internet would be named
`
`in 1984. Mobile computing equipment like laptops and notebooks still had to be con-
`ceived.
`
`The current success of Wi—Fi is remarkable in more ways. Hitherto, the most sig-
`nificant developments in radio frequency technology—radio-relay systems, radio and
`television broadcasting—had emerged under a licensed regime. whereby a govern-
`ment agency provides exclusive rights to the use of a specific part of the radio fre—
`quency spectrum, thereby providing the application protection from interference by
`other radio frequency applications and users. "the success of Wi—Fi, however, emerged
`under a license-exempt regime, whereby it had to contend with many other applica-
`tions and users in the same radio frequency band, including micro—wave ovens and
`radar equipment.
`I
`In this paper we will explore the innovation journey that has resulted in the global
`success of Wi-Fi, in the form ofa descriptive longitudinal case study. The case starts
`in 1980 when the US Federal Communications Commission initiates a study into the
`public use of spread spectrum techniques leading to its rulemaking in 1985. We
`describe how this opportunity is used by the industry, thereby focusing on the devel-
`opments at NCR and its corporate successors to develop, market and sell a new Wire-
`less-LAN product. The choice of NCR stems from the leading role it assumed in the
`creation and adoption ofa global Wireless-LAN standard: IEEE 802.11. Subsequently
`we will explore how Wi-Fi is being deployed and shaped by the users, as part of com—
`mercial service offerings by “hotspot” operators and through deployment as part of
`community initiatives and municipal networks. We conclude with a discussion ofthe
`implications of this case for government policy and firm strategy.
`
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`Unlicensed Innovation: The Case ofWi—Fi
`
`2.
`
`TRIGGERBD BY US POLICY
`
`A critical input to the development, production and application of any wireless device
`is the permission to use the radio frequency spectrum. This permission has typically
`to be granted by a government agency, as in the current spectrum management para—
`digm the national governments have taken ownership ofthe frequency spectrum as a
`natural resource and assign parts of the spectrum to certain applications and users
`upon request or as a result ofpolicy it executes (Hazlett, 2006). In the case ofWi-Fi the
`first permission is the Report and Order of May 9, 1985 of the US Federal Communi~
`cation Commission1 to “[authorize] spread spectrum and other wideband emissions
`not presently provided for in the FCC Rules and Regulations” (FCC, 1985).
`The political climate was set by the Carter Administration and FCC Chairman
`Charles Ferris intended to extend the deregulation spirit to the radio frequency spec—
`trum. He would like to end the practice whereby numerous requests for spectrum
`
`would be brought forward, based on special cases of technology application. The ada-
`gio was ‘let us unrestrict the restricted technologies’ (Marcus, 2007; 2008). Dr. Stephen
`J. Lukasik the first Chief Scientist of the FCC, was requested to identify new commu-
`
`nications technologies that were being blocked by anachronistic rules. It was Dr.
`Michael I. Marcus, employed at the Institute of Defense Analysis, who suggested that
`spread spectrum was such a technology and as a consequence was invited to join the
`FCC to follow up on the idea. In December 1979 the MITRE Corporation was invited
`to investigate the potential civil usage of spread spectrum. Their report of 1980 started
`the public consultation process on the use of spread spectrum technology.2
`
`1
`
`1
`
`The Federal Communications Commission is an United States government agency, directly respon—
`sible to Congress. The FCC was established by the Communications Act of1934 and is charged with
`regulating interstate and international communications by radio, television, wire, satellite and
`cable. The FCC‘s jurisdiction covers the 50 states, the District of Columbia, and US. posSessions
`(FCC, 2007}.
`
`When the FCC receives petitions for new rule making, or ifthey see themselves a need to make a
`rules change. they have to organise a public consultation in the form ofa "Notice of Inquiry. Nol".
`The public at large is invited to comment within a set period after which the public is requested to
`provide comment on comments, the sci—called Reply Comments.
`All comments have to be addressed in the subsequent consultation round. the so called "Notice of
`Proposed Rule Making, NPRM". In this document, the FCC also provide the proposed new rules
`with the reasons for their choices. This round is also followed by a comment and reply comment
`period.
`Again. the FCC has the obligation to address all comments and reply comments and publishes the
`results in a “Report and Order, R&O". Sometimes. 3 “Further Notice of Proposed Rulemaking,
`FNPRM" is included when the Order is only partially completed. A comment and reply comment
`period automatically follows the FNPRM.
`Issues found in the Order can only be appealed in Petitions for Reconsideration.
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`Walter Lemstra and Vic Hayes
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`2.1.
`
`THE ORIGIN OF SPREAD SPECTRUM
`
`In the Notice of Inquiry the FCC proposed the civil use of spread spectrum (PCC,
`1981). Until 1981 this technique had remained officially classified as military technol-
`ogy (Mock, 2005). The invention of spread spectrurn, in the form of frequency hop—
`ping, dates back to 1942 when a patent was granted to actress Hedy Lamarr and com-
`poser George Antheil: US. Patent it 2,292,387, issued on August 11, under the title:
`“Secret Communications System“. Lamarr, born as Hedwig Eva Maria Kiesler in 1913
`in Vienna, had been married to Friedrich Mandl, an Austrian arms manufacturer,
`
`which had exposed her to discussions on the jamming of radio-guided torpedo’s
`launched from submarines. In 1937 Kiesler left Austria for America, under a contract
`
`with MGM. Here, she met with the composer George Antheil. Their combined insights
`in technology and music generated the idea to change the carrier frequency on a regu-
`lar basis, akin to changing the frequency when striking another key on the piano.
`They presented their idea to the National Inventors Council and subSequently donated
`their patent to the US. military as a contribution to the war effort. However, the first
`practical application was after the war, in the mid 1950s, in sonobuoys used to secretly
`locate submarines (Mock, 2005 pll—7). The first serial production of systems based on
`direct sequence spread spectrum were most probably the Magnavox ANKARC-50 and
`ARC-90 airborne systems. There are most probably other early systems that have
`remained classified (Marcus, 2007).
`
`2.2. THE FCC REPORT & ORDER
`
`Interestingly, the MITRE report that investigated the potential benefits, costs, and
`risks of spread spectrum communications did not identify a strong requirement or
`need from the industry to assign spectrum for spread spectrum applications. The
`report concludes that “many potential Spread spectrum applications are likely to be
`economically unattractive”, other potential applications “...may be economically fea—
`sible, but may make poor use of the spectrum resources that they would require” and
`“[ih‘t certain applications, spread spectrum techniques can make more efficient use of
`the spectrum than the usual implementation of narrowband techniques. . .
`. ..when
`the information bandwidth per user is low and the operating frequency is high” (Mitre
`Corp, 1980 p6—1 to 6—2). In the analysis it was recognized that spread spectrum is
`inherently more resistant to interference. The MITRE report had identified the bands
`designated for Industrial, Scientific and Medical applications (ISM bands) as bands
`“.. .in which spread spectrum techniques may be able to improve the utilization of the
`Spectrum. ..[as these bands] are relatively unsuitable for applications requiring guar-
`anteed high levels ofperformance. Indeed, since users of the ISM bands are not nom-
`inally protected from interference, it can be argued that any productive use of these
`bands frees other spectrum resources that are needed by applications requiring pro-
`
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`Uniicensed Innovation: The Case ofWi-Fi
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`tection from interference" (1980 p6—4). Typical applications in the ISM bands were
`
`garage door openers, retail security systems, cordless telephones and includes the
`operation of microwave ovens. Hitherto no communications applications were per—
`mitted in the ISM bands.3
`
`The FCC Notice of Inquiry proposed to use spread spectrum as an “underlay”
`within other bands, i.e. sharing the frequencies with other services“ The Notice
`triggered comments expressing fear of interference and the difficulty of tracing the
`source ofinterference. Based on the responses the FCC proposed two rules changes:
`one for licensed use of spread spectrum in the police bands and one for unlicensed
`
`use. The unlicensed proposal called for an overlay on the spectrum above 70 MHz at
`very low power (below —41 dBm) and one for unspecified power limits in the 3 bands
`designated for ISM applications (Marcus, 2007). The Further Notice and Notice of
`Proposed Rulemaking triggered more com ments, whereby many of the respondents
`favoured the proposed authorization (FCC, 1984). Subsequently the FCC deferred all
`actions on all but the Police radio service and the use of spread spectrum in the three
`
`bands designated for ISM applications: the 902-926 MHz, the 2400—24835 MHz and
`the 5725—5850 MHz bands (FCC, 1935).5
`
`This FCC rulemaking that would ultimately lead to the global success of Wi-Fi had
`an intereSIing final twist. After the release of the spread spectrum authorization, the
`whole top leadership of the FCC Office of Science and Technology was exiled, possibly
`as a result of actions by the industry being concerned about the deregulation that
`would make the FCC less responsive to major manufacturers who wanted new tech-
`nology only made available when it was convenient to them. An attempt was made to
`fire one deputy, and the name of the Office was changed into Office of Engineering
`and Technology. The position of Marcus was eliminated and an attempt was made to
`dismiss him from the FCC. According to MarcuS: “In the months following the spread
`spectrum decision three top manager of the Office of Science and Technology were
`removed and the new organisation took no similar bold initiatives for almost a dec-
`ade.” (Marcus, 2007; 2008).
`
`3.
`
`DEVELOPED BY INDUSTRY, WITH NCR IN THE LEAD
`
`Some FCC staff members had opposed the rule changes out of fear that the new rules
`to be adopted would never be used. The reality proved otherwise. The authorizations
`
`In Europe, some communication services were permitted in the ISM bands: video surveillance by
`police, and news gathering services such as the video connections between mobile cameras on
`motorbikes and helicopters to follow the Tour de France.
`This underlay approach was similar to the approach the FCC adopted in 2003 for Ultra Wide Band
`(UWB), but in 1981 it was an idea ahead ofits time (Marcus. 2007).
`
`The limitation on peak power was set at a level of 1 Watt for the three ISM bands. No limitations on
`the antenna gain were specified.
`
`4
`
`5
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`Walter Lemstra and Vic Hayes
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`opened the way for innovatioa, because with the regulation in place companies were
`more willing to allocate investment capital to research and development. In 1988 the
`first real civil applications of spread spectrum appeared in the form ofa Local Area
`Networks, e.g. Telesystems and one year later the Garnbatte‘S MIDI LAN, which
`became very popular with top rock musicians. A derivative of this system was used in
`nuclear power plants, under the name of Midistar ~ Pro. From 1990 onward the
`number of equipment authorizations by the FCC expanded significantly, see Figure ]
`(Marcus, 2000).F
`
`Figure 1. Spread spectrum equipment authorizations
`
`1000
`
`100
`
`It)
`
`lSM Band Spread Spectrum Annual Equipment Authorizations
`
`
`
`
`
`I 1933
`
`199a
`
`1992
`
`1994
`
`1995
`
`1993
`
`mm
`
`2002
`
`3.1.
`
`THE LEADING ROLE OF NCR AND ITS CORPORATE
`
`SUCCESSORS
`
`A leading role in the development of WLANs has been played by NCR.3 A nagging
`issue for their sales force had been the lack of mobility in the cash register product
`
`portfolio. Retail department stores, one of the main client groups of NCR, reconfig-
`ured the sales floor on a regular basis and the cost of rewiring the transaction termi-
`nals was a significant expense. To address this issue NCR had conducted a study into
`the use of infrared light technology, but quickly recognized that radio technology
`
`would be a much better option: . ifit was permitted, if we could make it work, and
`
`Gambatte beCame Digital Wireless Corp. and then Cirronet. It was acquired by RFMonolithics in
`Texas in 2006.
`
`By bringing spread spectrum techniques into the civil domain, the FCC not only opened the way for
`Wi—Fi to emerge. but also facilitated the developments towards spread Spectrum application in the
`field of mobile telephony in the form ofCDMA. promoted by Qualcom, a company established by
`Jacobs and Viterbi c.s.. a month after the FCC decision (Mock. 2005).
`
`NCR Corporation was founded in 18?9 as the National Manufacturing Company of Dayton. Ohio.
`to manufacture and sell mechanical cash registers. In 1884 it was renamed National Cash Register
`Company. The company was acguired byATStT in 1991. A restructuring ofATBtT in 1996, led to its
`re—establishment as a separate company in 1997 (NCR, 2007}.
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`Unlicensed Innovation: The Case ofWi-Fi
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`if we could turn it into affordable products” according to Don Iohnson at the NCR
`Corporate R&D organisation (Johnson, 2007). The purposc and mission ofCorporate
`R&D in Dayton Ohio was to (1) recognize emerging technologies and (2) to promote
`advanced development and study in areas which would benefit multiple operating
`units. All advanced development was performed in the individual operating units.
`Following the FCC Report 8: Order NCR Corporate initiated a feasibility study into
`the use of a wireless technology in local area networking. Copper wires, coax and
`(shielded) twisted pair, differ from radio frequency spectrum in their transmission
`properties and in the way the medium can be accessed. In terms of the Open System
`Interconnection (031) model this implied that new designs were required at the phys-
`ical layer (PHY) and at the medium access layer (MAC), see also Figure 2, which shows
`the layers of the OSI protocol stack in relation to examples of current day protocols
`used in the context of the Internet (Based on Ohrtman and Roeder, 2003). Any pos-
`sible further impact on the higher layers of the stack (network through application)
`would also have to be assessed.
`
`Figure 2.1EEE 802.11 standards mapped to the OSI reference model
`
`IEEE 802.11 relaIEd standards stack
`
`l
`
`I
`
`PRESENTATION
`SESSION
`
`TRANSPORT
`NETWORK
`
`IEEE 301.2
`Logical Link Controller (LLC)
`
`IEEE Bull 1
`
`Media Access Control {MAC}
`
`Examples of related prom-c015
`used in the context ofthe internet
`
`HTTP. HTTPS. SMTP, POP3, IMAP. FTP,
`UUCP, NNTP, SSL, SSH, lRC, SNMP, SIP.
`RTP, Telnet, DNS
`
`TCP. UDP, SC'I‘P, DCCP
`
`{PW}, IPv6, lCMP. ARP, IGMP
`
`Data Link
`Layer
`
`Ethernet. Wi—Fi. Token Ring, FDDI, PPP. ATM
`
`b a]
`P Y“
`W“
`
`RES—232, BIA—422, its-449, Eta-435, lflBaseT.
`lnsaaser. IEEE 302.1 la. IEEE 802.1 lb, IEEE
`802.1 lg. DSL. ADSL
`
`Twisted pair copper. coax, fiber. radio, infra-red
`
`I
`
`I
`
`I
`
`Infrared PHY
`
`
`
`
`
`
`
`
`
`Direct
`Frequency
`
`
`5mm“
`“WW
`5W“
`firmed
`
`
`WWW
`511mm?"
`(FHSSJ
`(D5551
`
`
`
`
`
`PHY Layer
`PHY Layer
`
`
`
`
`I
`MEDIUM
`
`3.2.
`
`INVOLVEMENT OF THE DUTCH R&D CENTRE
`
`The seed money from Head Quarters in Dayton Ohio kicked 01? a development proc—
`ess whereby a Dutch-based Systems Engineering centre started a feasibility study for
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`Walter Lemstra and Vic Hayes
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`an American company to assess whether a wireless device could be developed for cash
`registers to be sold in the USA.
`The Systems Engineering centre was established to adapt the NCR products to the
`specific European requirements. The centre included a significant software develop—
`ment team working on integration of financial systems into the IBM-world, and
`another group of experts working on adapting the telephone modern technologies to
`the European Standards. The Utrecht Centre had become a skill centre in modem
`
`communication designs. One ofthe designs was a wired Local Area Network (MIR-
`LAN); which NCR deployed to wire up their Cash Machines in stores before Ethernet
`became a standard.
`
`The choice of the Utrecht Engineering Centre for the execution of the technology
`investigation was based on their signal processing expertise, hardware design experi—
`
`ence related to wired Local Area Networks, and the recent acquired radio technology
`knowledge from Philips Electronics.
`The first part of the feasibility project was to determine what power levels were
`needed and under what rules such products could be certified by the FCC. One of the
`
`issues was the so called “processing gain” requirements. This was the factor that had
`to be used in a spread spectrum system to “expand” the bandwidth above the band-
`width you would “normally” need just to get y0ur informatiOn data signal transmit-
`ted. The logic here is that the more “spread” or processing gain the system has, the
`
`more the signal looks like “noise” to others — the more capable the system is in reject~
`ing other signals, so more coexistence would be possible in a unlicensed band (Tuch,
`2007).9 Of course there is a trade of? between the data rates to be achieved and the
`
`complexity ofthe total system and thus the costs. Interactions with the FCC suggested
`that a signal with a code sequence oflength 10 or greater was required. This informa-
`
`tion implied that a WLAN could be realized operating at l Mbitfs or more. The team
`set to work to get the processing gain parameters set, and established a code which
`had a length of 11 with the required pmperties that were determined from indoor
`propagation studies.10 The feasibility study resulted in a Wireless—LAN Demo unit
`and a set of related product specifications.
`
`3.3. THE START OF PRODUCT DEVELOPMENT
`
`After the feasibility study had ended with positive results, the development team in
`Utrecht convinced the Retail Systems Division that product development was also
`best carried out by the same team. In the summer of 1987 the team set out to create a
`Wireless Network Interface Card (Wireless-NICE) to build a Wireless-LAN with an
`
`At the time, Bruce Tuch was leading the wireless RBtD efforts of the Utrecht centre.
`The code's property: The periodic and aperiodic autocorrelation function of this 11 length code is
`“bounded” by one. Actually it turned out that this was a “known code” called the Barker Sequence
`used in Radar Systems that was “rediscovered”.
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`Unlicensed Innovation: The Case of Wi—Fi
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`over-the-air data rate of 1—2 Mbitfs, to be used in the retail markets that NCR was
`
`serving. The NIC would have to operate in the 902—923 Mi-Iz band, the lower ISM
`band as specified by the FCC. This IOWer band was selected to provide the maximum
`possible range, as Opposed to the ISM bands at 2.4 and 5 GHz which have higher levels
`of attenuation. Another reason was to reduce the cost of the electronics.
`
`The creation ofa new Medium Access Control (MAC) protocol, as part ofthe Data
`
`Link Layer (DLL), was the focus ofthe product development effort. To limit costs and
`to reduce the development time the team intended to leverage as much as possible
`existing MAC designs and to make use of existing protocol standards where possi-
`ble.
`
`3.4.
`
`THE ROLE OF STANDARDS WITHIN NCR
`
`Within NCR de—facto standards had been a curse rather than a blessing, as they were
`of a proprietary nature. AlthOugh the company was a leading provider of point-of-sale
`terminals, most of the time these terminals had to be connected to a back office com-
`
`puting system, mostly supplied by the leading mainframe provider IBM. Having a
`dominant position in this market IBM used proprietary protocols to connect terminal
`equipment to its mainframes and mini—computers. As a result much of the protocol
`expertise of the Utrecht development team originated from the analysis and subse—
`quent emulation of IBM protocols. Where NCR had the opportunity it promoted the
`use of open standards.
`
`3.5-
`
`FINDING AN EXISTING MAC PROTOCOL
`
`Finding a related MAC was in essence a search for a MAC protocol already being
`implemented using a wireless medium, or to find a MAC implemented for another
`medium, such as twisted pair copper or coax cable, that could be adapted to wireless
`
`use. This search led to “ALOHA”, which was one of the first Wireless Radio protocols,
`
`and derivates of this protocol which morphed into Ethernet and later the IEEE 802.3
`standard. While looking at the standards for LANs, another possible choice emerged:
`the Medium Access Control used in the Token Bus standard, which was very recently
`
`approved as IEEE 302.4. It became clear that the standards body to focus on was IEEE
`and in particular the “802” committee. The development team recognized that having
`
`an already established group within IEEE 802 to sponsor a new physical layer was a
`much faster process than trying to start a new standard from scratch. The IEEE 802.41
`Task Group was already working on a wireless variant driven by General Motors, but
`it seemed it was “losing stea m”.”
`
`“
`
`According to the PA R this taskgroup is denoted 802.4c which through a transcription error became
`802.4l.
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`Wolter Lemstra and Vic Hayes
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`The Chair of the 802.41 Task Group did not attend anymore, but the Executive
`Secretary was available and willing to convene on request of NCR a meeting in July
`1988. In the following meeting in November Vic Hayes of NCR was elected to take
`over the chair of this Task GrOup. However, as Tuch observed: “Making the 802.4
`
`protocol fit with the wireless medium was like trying to use a boat to get across a
`swamp instead of a hovercraft." (2007). Having concluded that the Token Bus MAC
`protocol was not suitable for the purpose, the MAC used as part of the IEEE 802.3
`Ethernet standard still might be adapted. One of the key issues was how to get “colli-
`sion detect” implemented using a wireless medium. A solution develoPed by NCR and
`
`Inland Steel was presented to the IEEE 802.3 Ethernet standards group, to solicit
`interest to start a new wireless working group (Tuch and Masleid, 1991). They were
`apparently too busy on the evolution of the Ethernet standard towards higher speeds
`to support this initiative. With a negative vote for the proposal the political stage was
`set to “start from scratch” with a new Wireless MAC standard. Under the leadership
`
`of Bruce Tuch of NCR, the companies interested in establishing a wireless local area
`
`network standard quickly generated the necessary paperwork for the establishment of
`a new standardization project within IEEE. At the July Plenary meeting, the IEEE 802
`Executive Committee approved the request. With the subsequent approval by Stand-
`ards Board the new “802.11” Working Group was born, and Vic Hayes of NCR was
`
`appointed as the interim chairperson.
`
`3.6. NCR TAKING THE LEAD IN IEEE 802.11
`
`September of 1990, at the first meeting of the 802.11 Working Group Vic Hayes was
`elected as the Chair.12 At the November 1991 meeting of the Work Group two Sub
`Groups were established, the MAC group and the PHY group. On a case by case basis
`
`the sub groups made their own rules for what materials the proponents had to submit
`
`for the “802.11” membership to make a well informed decision. Once the proposals
`would be available, the two groups had the daunting task of selecting the appropriate
`technology for the project. In most of the cases the Task groups used a process of
`selection whereby in each round of voting the proposal with the lowest number of
`supporting votes would be removed from the list, until a proposal would reach major-
`
`ity support. The proposal reaching majority support would be submitted to the Work—
`
`ing Group for approval as the technological basis for the draft standard.
`
`‘2
`
`Hayes would serve as Chairperson ofthe IEEE 802.1] Working Group for 10 years, the maximum
`period allowed.
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`Unlicensed innovation: The Case of Wi-Fi
`
`3.6.1. Thefirst barrio ground: IBM vs NCR / Symbol Technologies / Xircom
`
`The first point of contention emerging in the MAC Task Group was about the princi-
`ple to be used in assigning capacity to a terminal based on the shared use ofthe radio
`spectrum. A similar issue in the Wired—LAN arena had split the industry and led to
`three different incompatible standards having been approved by the IEEE: Ethernet,
`Token Bus and Token Ring. For WLAN IBM proposed a centralized approach while
`NCR together with Symbol technologies and Xircom Submitted a proposal that sup-
`ported a decentralized mechanism. The merits of the two proposals were intensely
`debated.l3 In the end the proposal for a decentralized approach wan the vote; one of
`the reasons being that this protocol would support “ad hoc” networking, whereby a
`terminal would be able to independently coordinate communications with another
`terminal.
`
`3.6.2. The second barrio ground: Frequency Hopping vs Direct Sequence
`
`The second area of contention was related to the PHY. In its 1985 Rule 8: Order the
`
`FCC had specified two different spread spectrum modulation techniques that could
`
`be used: Frequency Hopping (FHSS) and Direct Sequence (DSSS). When put to a vote
`in the PHY Task Group neither of the two modulation techniques obtained the
`required 75% level of support. Proponents of FHSS claimed it was easier to implement,
`
`while DSSS had the promise ofa more robust system with a higher data rate. The indi—
`viduals in the FHSS camp feared that the required investment in silicon would be
`significant, while the 0558 camp tried to refute the argument based on their experi-
`ence in the implementation of pilot versions. As neither of the two groups could get
`the required level of support, the only way out was to include both modulation tech-
`nologies in the standard.
`
`3.6.3. The third battle ground: HomeRF
`
`The initiative for an alternative standard called HomeRF is said to originate with
`Proxim, and led to the establishment of an industry consortium (HRFWG) in early
`1997 (Negus, Stephens et al., 2000). The main driver for this development was the
`perceived inadequate support for isochronous services, i.e. the use of telephony, in the
`IEEE 802.11 draft specification.14 The consortium adopted the Frequency Hopping
`
`13
`
`'4
`
`To reach agreement within the IEEE Working Groups and Task Groups individuals opposing a
`proposal in a vote have to explain the reasons for their opposition. By making these reasons explicit
`the group as a collective is invited to find ways to resolve the issue and ifsuccessful it has broadened
`the support for the resulting proposal.
`Companies that were involved in HomeRF development included: Butterfly Communications,
`Compaq, HP, IBM. Intel, iReady. Microsoft, Motorola, Proxim, OTC Telecom, RF Monolithics,
`Samsung and Symbionics (Lansford, 1999).
`
`Competition and Regulation in Network Industries. Volume 9 {2003), No. 2
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`Wolter Lemstra and Vic Hayes
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`method as the basis for their standard.15 The HomeRF Shared Wireless Access Proto-
`
`col - Cordless Access (SWAP-CA) combined portions ofthe OpenAir frequency hop-
`ping PHY as developed by Proxim, CSMAJ’CA packet data derived from the 802.11
`Frequency Hopping standard. and TDMA-based voice support from the Digital
`Enhanced Cordless Telecommunication (DECT) standard. The FH method adopted
`
`by the consortium supported a data rate of 1.6 Mbitfs (Negus and Petrick, 2008).
`HomeRF was positioned as a low cost solution having a relaxed PHY specification
`supporting both isochronous (connection oriented) and asynchronous (connection-
`less) traflic. In April 2000 Intel announced its Anypoint wireless home networking
`and in November Proxim unveiled its Symphony HRF (Palo Wireless, 2003).
`When the IEEE adopted the “802.11b” project for an 11 Mbitls WLAN, the consor—
`
`tium announced a second release of the specification for speeds of6 Mbitfs up to 10
`Mbitfs (Negus, Stephens et al., 2000). Therefore, they filed a letter at the FCC asking
`
`for a change of the Frequency Hopping in the form of an interpretation of the existing
`rules to widen the channel width from 1 MHz to 3 and 5 MHz. However, th