The Femtocell: Innovation Groundswell Or Unfair Cellular Hard Sell?

The signals emitting from cellular base stations and handsets with today’s most common GSM and CDMA variants, by virtue of their high carrier frequencies, low broadcast signal strengths and other factors, don’t effectively penetrate into (or out of) residences and other structures (thereby explaining, for example, the popularity of last year’s "700 Mhz" upper UHF spectrum auction by the FCC). This limitation hampers cellular carriers’ abilities to effectively compete against traditional POTS service as well as upstart VoIP, and it’s particularly problematic for cellular providers such as T-Mobile who don’t also offer POTS-based service in the United States. In past writeups, I’ve evaluated several means of boosting within-premises cellular signals:

• Spotwave’s booster, which amplifies the ambient signal but therefore inherently requires an adequate received SNR in order to be effective (along with requisite antenna placement restrictions that may also be unaesthetic), and
• T-Mobile’s HotSpot @Home, which relies on Wi-Fi-supportive handsets and custom-firmware routers to augment existent-or-not cellular service with wireless VoIP (strictly speaking, UMA).

Credit T-Mobile for creativity in attempting to lure folks away from POTS. The long-winded ‘HotSpot @Home Talk Forever Home Phone’ service (mercifully later renamed ‘T-Mobile @Home’), which rolled out roughly a year ago in conjunction with a different custom-firmware Linksys router, doesn’t attempt to extend cellphone service into the home. Instead, if you’re a T-Mobile cellular customer ($40/month minimum), you can also port your POTS number to T-Mobile @Home for an incremental $10/month (in exchange for unlimited nationwide calls). The POTS wiring network in your home tethers to the SIM-inclusive router, which leverages your broadband connection to make the calls. While this approach may work for many broadband Internet users, folks like me unfortunately can’t exploit it, because my DSL service isn’t ‘naked’ i.e. AT&T requires that I also have an active POTS line.

Then there’s the femtocell, a blend (simplistically speaking) of the earlier-mentioned cellular signal booster and T-Mobile services. Like T-Mobile’s @Home approaches, it harnesses your broadband Internet connection for voice call purposes. And unlike HotSpot @Home, it lets you use your cellphone indoors. But unlike HotSpot @Home (but like Spotwave’s booster), it broadcasts cellular signals (potentially plus Wi-Fi, enabling it to replace a wireless router or access point) thereby allowing you to use it with any cellphone supporting your particular service provider.

The femtocell concept has been bantered about in the industry for years, but the first tangible product example I encountered in the U.S. was Samsung’s Ubicell, which Sprint rolled out in test markets in September of 2007 as the $49.99 AIRAVE. AIRAVE connects to your existing router over Wi-Fi, versus CAT5 (or, for that matter, completely supplanting the existing router). Sprint launched AIRAVE nationwide at the end of July 2008, unfortunately coincident with a doubling of the unit’s price tag. And although AIRAVE reportedly works well, don’t put away your wallet after buying it, because you’ll also be stuck with monthly fees. Want to extend your cellular coverage to within your home, but still have calls count against your monthly airtime allotment? That’ll be $4.95 on top of your existing cellular bill. How about unlimited nationwide AIRAVE-sourced calls with a single Sprint number? $14.95, please (or said another way, $10/month over the prior baseline option). And what about a family plan? That’ll set you back an incremental $24.95 over your cellular-centric service cost.

Perhaps not surprisingly, the other major U.S. cellular suppliers are also treading down the femtocell path. Verizon launched its Network Extender (also built by Samsung) on Sunday, in fact. The upsides (sorta): a fixed $249.99 price, with no above-and-beyond monthly fees, and up to three simultaneous calls supported. One downside; some of those calls might come from friends, neighbors and nearby strangers, as unlike Sprint’s offering (on a user-opt-in basis), Network Extender isn’t bonded to a specific phone number or numbers. And another; Network Extender only supports voice calls, not EV-DO 3G data services (worried about folks canceling their DSL or FIOS service, Verizon?) or MediaFLO mobile television. And a slip of the website lip revealed some (tentative) details on AT&T’s upcoming Cisco-developed 3G MicroCell (albeit no pricing or roll-out date); support for voice and 3G (UMTS HSDPA) data, up to four simultaneous connections, and a registered-user service lock.

If the femtocell concept takes off, as I suspect it’s got a decent chance of doing (if priced correctly) considering the large number of folks who are already shutting down their POTS service and going cellular-only for voice, it’ll bring a breath of fresh air to a generally depressed tech market. But I can’t shake the feeling that the femtocell is a ripoff (or if you prefer, "clever marketing"). Those of us with cellphones know that it’s already possible to use them indoors…that is, if there’s a cellular base station in sufficiently close proximity. Femtocells, it seems to me, are a sly stab by the carriers at shifting further network build-out expenses away from themselves and towards their customers, not to mention redirecting voice and data traffic away from their networks and onto their customers’ LANs and WAN pipes.

Thoughts, folks?