Today, Google announced that their are starting a new wireless program for cellular customers. They're calling it Project Fi, and I think it's going to do to the wireless industry what Google Fiber did for the residential Internet service industry. There's been a lot of activity in the information services industry lately, and it's all moving extremely fast in 2015, so hopefully I'll be able to offer some assistance in keeping you up to speed.
When I say Google Fiber changed the residential Internet service industry, what do I mean?
When Google Fiber was first announced, it was an experiment. Google's idea was to take the speed and reliability of fiber optic cable all the way to the home. This wasn't a new idea, but for residential service, it was uncommon. Google delivered fiber optic cable all the way to the residence, delivering connection speeds up to 1 Gbps, or 1000 Mbps for personal use. At the time, Gigabit speeds were incredibly uncommon, and even to this day, that speed is fairly scarce for Internet service providers to offer. Google's main competitor or counterpart at the time was Verizon with their FiOS offering, which delivered impressive speeds, but not Gigabit.
For the providers that have not yet invested in fiber optic service to the residence, they're still offering services in the 50 to 100 Mbps range with coaxial cable or telephone lines and cable modems or DSL modems. This is sufficient for gaming or streaming video, etc, but even the impressive 100 Mbps tier will show some cracks if you have an entire family living in a home that all use bandwidth-intensive services.
It's great that we're improving bandwidth, but that's not the real change here. The real change lies in the fact that Google introduced this service at a competitive price. They're charging $70 per month for Gigabit speeds WITHOUT a data cap. That's incredible. Because Google introduced fiber at such a competitive rate, they've forced other Internet providers to step up to the plate and improve their infrastructure, or risk losing their customer base to Google. For a long time, providers have been riding out the "golden age of coax" to provide Internet service to their customers. When doing it this way, they can continue providing you with "decent" service without investing in their last-mile infrastructure, which to them equates to increased profits. In order to compete with Google in the bandwidth segment, they need to upgrade their infrastructure, because coaxial cables just aren't cutting it to get to the Gigabit speeds. On top of that, once they DO build out their fiber optic infrastructure to the home, they'll need to charge competitive pricing for their top-tier residential Internet services.
By introducing this new idea of top-tier service for reasonable pricing, Google is forcing the competition to upgrade their infrastructure. It's really a win-win situation for consumers, because now they get much better service, and likely for a better price than they were previously paying.
How does Project Fi change the wireless industry?Project Fi is an entirely new service and billing concept. The services are delivered in a different way (using data instead of the traditional voice technology), so the idea of minutes and number of messages sent isn't really a thing anymore. Google is handling all of your voice calls, text messages, picture messages, and voicemails using data now. To connect you to Google's servers to actually deliver this service, they've gotten help from a couple of major wireless carriers in the U.S. - T-Mobile and Sprint.
Since it strictly uses data, Google will bill you for the data you use. Whatever data you pay for, but don't use, you'll get your money back. This is an honest billing method, you really only pay for the services you're actually using.
The way wireless carriers work today is a pretty big disappointment. They charge astronomical prices for services that haven't changed much. They just keep charging you more and more, while inventing new and creative ways to bill you for the things you already had once.
To put things in perspective, let's say I'm a Verizon Wireless customer, and I'm a tech-savvy sort of guy who likes to use his phone for everything. A typical day might include:
-Sending and receiving email
-Using social networking sites like Facebook or Twitter
-Watching videos or movies
-Taking pictures and sharing them with friends or family
-Reading news articles and keeping up on events
-Streaming music in the car or on the go
A typical month for me might include up to 4GB or so of data usage, and I don't watch a lot of videos. Throw some more YouTube and/or Netflix in there, and you're creeping on 6 to 8 GB or so.
For my example here, though, let's say on average, I use 3.5GB of data every month.
I don't have anyone else on my cell phone plan currently, so I'm only a single-line customer. No family plan for me. OK, so let's go to Verizon and ask them about their single-line plans. I only need 1 line for myself, and I use about 3.5GB of data every month.
Hey Verizon, what do you have to offer me?
Right now, Verizon only offers 1GB or 2GB plans for a single line user, for $60 and $75 per month, respectively. These plans are useless for the tech-savvy folks who use their phone heavily.
OK, throw the single line plans right out the window, because they're useless to me. Let's move on to the MORE EVERYTHING plans that they offer. It's basically a family plan, but allows for the use of a single line as well. Sound like it'll be more expensive? Good, because it is.
OK, so Verizon, what do you have to offer me in your MORE EVERYTHING plans?
Hey, great news, they have a 3GB and a 4GB data plan under their More Everything plans. They're only $50 and $60 a month, respectively. But wait a minute, these are essentially shared data plans, and to get access to the pool of data, minutes, and messaging, they charge me a $40 per line access fee.
Well, since I typically use 3.5GB of data, I have to get the 4GB plan, otherwise I'll have a data overage, and that'll cost even more money. So, I go with the 4GB data plan, and I have a single line, so I'm paying $60 for the plan, and $40 for the access to the plan from my smartphone.
That's $100 per month.
Yes, ONE HUNDRED DOLLARS PER MONTH for 4GB of data.
So, just to be clear, I'm a single person asking for 4GB of data per month, and I'm being charged one hundred dollars. That's unbelievable. I haven't even factored in the cost of the device or the fact that there's often times a 2-year contract involved that comes along with a hefty early termination fee if you decide to cancel your service. If I happen to use 1GB throughout a monthly billing cycle, the plan isn't reduced in price either. Man, I should've used all 4 and gotten my money's worth, right?
Where I'm going with this, is that there's a lot of waste in this plan. I don't need to pay for a "pool of data" that I'm going to have the privilege of having access to. As a single person, I should be able to have a single line plan, and pay for the data that I use.
The way Project Fi will change the wireless industry is that they're going to do the same thing to the Tier 1 carriers (Verizon, AT&T, T-Mobile, Sprint, U.S. Cellular) that they did to the residential Internet providers with Google Fiber. They're going to force the competition to match up with them on pricing, otherwise suffer the consequences of losing their customers to the simpler, more honest provider. Google will become a services provider for phone calls, text messages, and picture messages, while the carriers will just become the path between you and Google to get TO those services. Ideally, I'd be able to buy an honestly billed data plan from Verizon, get my phone services from Google by just installing an application on Android or iOS, and then Verizon just has to worry about providing me with LTE data services. Google will be starting this service with T-Mobile and Sprint combined into "one carrier."
There's a catch... you have to have a Motorola Nexus 6
Project Fi sounds wonderful and dandy and like it's going to change the world forever, but why in the heck does it require having a Motorola Nexus 6? What's so special about the Nexus 6 that Google's only offering it with this device?
1. The Nexus 6 has radios in it for every U.S. carrier. This is extremely important.
When you buy a cell phone from a carrier, it's always built specifically for that carrier. It has a special build of software on it, it's got antennas in it that operate specifically with THAT carrier. This way, the carrier has the maximum level of CONTROL over that device. They can field test it with their network prior to releasing it to the public for purchase, they can control the features and software on the device, and the manufacturer can reduce the COST of the device by only including the radios for that specific carrier.
To give you an idea of how varied things are in the U.S. for cellular service, here's some examples...
AT&T = GSM, WCDMA, LTE
Verizon = CDMA + LTE
T-Mobile = GSM, WCDMA, LTE
Sprint = CDMA + LTE
U.S. Cellular = CDMA + LTE
The Nexus 6, from a technologies perspective, supports all of the above, GSM, CDMA, WCDMA, and LTE. It can connect to every TYPE of network that the major U.S. carriers offer for their services.
Technologies is only a small piece of the puzzle though. Each one of the technologies has their own specific BANDS, or FREQUENCIES that they operate on. Here's a list of just LTE networks and how diverse they are, without even taking a look at the other technologies:
AT&T = 2, 4, 17
Verizon = 2, 4, 13
T-Mobile = 2, 4, 12
Sprint = 2, 25, 26, 41
U.S. Cellular = 5, 12
LTE Frequencies by Band (in MHz)
2 = 1900
4 = 1700
5 = 850
12 = 700, A and B Block
13 = 700, C Block
25 = 1900 G Block
26 = 850
41 = 2500
So, as you can see, the phone needs to be able to receive and transmit on a whole bunch of frequencies, and that's just LTE. To combine all of this technology into a single device is extremely costly, and up until now, that sort of diversity in a single device has never been required.
That's where the Nexus 6 comes into play. My point here is that the Nexus 6 is capable of operating on every technology that every U.S. carrier can provide to their customers. This makes it a very capable device. I can take my unlocked Nexus 6 to any carrier in the U.S. and active it with them. This makes the Nexus 6 the only device that makes Project Fi possible. Rest assured, you'll see more devices like this, but they aren't cheap to build. This is partially why the Nexus 6 is so expensive, and doesn't follow pricing trends that other Nexus devices brought.
2. Switching between carriers or Wi-Fi on the fly (software)
In number 1 here, I explained why connectivity to every carrier is so important. There's another component to that connectivity, though, which is software. The phone needs to know which carrier has the strongest signal in your area, and it needs to be able to make the switch seamlessly from T-Mobile to Sprint, or from Sprint to T-Mobile, without you even knowing it.
Think of this as going outside of your carrier's network and roaming on another carrier, but now it's not roaming, it's the phone actually deciding which carrier is providing the best service, and actively selecting to be on that carrier.
Typically, this is handled between carriers with a ROAMING AGREEMENT. The phone will switch carriers, but it'll do it as a last resort when it can't find service with the primary carrier. Right now, the Tier 1 carriers don't really have LTE roaming agreements, so you're pretty much stuck with what you have natively on your own carrier. The software that makes Project Fi possible changes the game ENTIRELY for this. Instead of the carrier making the call as to which network you're connecting to, the phone is now making the decision. It's not a last-ditch effort either, the phone is actively deciding what's going to be best for YOU, not the carrier.
At this point, I can only assume this will be a software release for the Nexus 6, most likely available in Android 5.1.1. The logic for the carrier switches will be built into the software in combination with the Project Fi SIM card that you put in the phone.
To throw another wrench into things, Project Fi is also fully functional on Wi-Fi. In addition to the algorithm for deciding which carrier to use, Project Fi has also included functionality for Wi-Fi. According to Google, a call will seamlessly transition from Wi-Fi to cellular, or back the other direction, and also between cellular networks. This means I can be on the phone at my house on Wi-Fi, get in my car and drive away from my house, transition to cellular, and then when I get to work, if I'm still on the phone, I'll connect to the office Wi-Fi, and continue the call. This is really impressive stuff, not to mention the fact that while I'm on Wi-Fi at home or at the office, all of the things that I'm doing on the phone don't count towards my monthly bill.
Without the software and logic behind Project Fi, which will initially only be available on the Nexus 6, none of this would be possible.
So, to kind of wrap things up, I think you're going to see some big changes in the wireless industry coming up very shortly here. There have been some ongoing price wars over the last 6 months, and carriers finally starting to introduce better plans and pricing that benefit the consumer, but I think this is going to be a giant leap forward. Refunding customers for the data they don't use is a big change, and actually aggregating wireless services between carriers is an entirely new concept altogether.
Let the phone do the heavy lifting to decide which carrier is best, don't rely on the big carriers to do it for you!
I'm looking forward to Project Fi. I'll give it a try, even if that means I have to put up with T-Mobile and Sprint for a little while. It's all about sending the right message, and getting things done. I'm going to try to hunt down someone from Verizon and AT&T, and send them my message as well. Walking into a retail store and telling them off won't do me any good, so I'll have to find the right person, but that isn't going to stop me.
Until next time!