All bets on wireless – for now

If you are have some spare change to invest, or you're building a name in Washington D.C. for future career options, wireless is the place to be at this moment.

Since the dot.bomb bubble, venture capitalists have been acting more like they should when it comes to investing in telecommunications firms. VC now look for a longer term play of five to seven years once they invest, steady growth with revenues and profits, solid management and an understandable business model - no more of this crap of raising $20 million with a PowerPoint presentation and a smile.

In tight times, VCs circle the wagons, figure out which children can stay in the lifeboat, cut off funding to those who can't, and invest in those companies that have a good to excellent shot at profitability once the storm clears. Better still if they can find profitability during the storm.

FMC/femtocell play Kineto Wireless took in $15.5 million in funding last week, including a "strategic investment" from Motorola.  You know Moto has to have serious belief in Kineto to give them money after all their tribulations this past year. Expect FMC/mobile UC players to continue to build business; everyone has their own personal cell phone, everyone uses it for work, everyone wants to keep personal and business calls seperate.

WiMAX is another area attracting funding. Sure, everyone has heard about the in-progress $3.5 billion capitalization of Clearwire once the Sprint/Clearwire merger passes through the FCC, but Altair Semiconductor closed $22 million in Series C round funding in late September. Fabless Altair is using the money to expand its global operations, as well as to continue development on WiMAX and LTE chipsets. There are a couple of other VC announcements in the pipeline, regardless of where Wall Street goes in the next two weeks.

And I suppose a number of people will owe thanks to FCC Chairman Kevin Martin if two different proposals to free up spectrum for public use go forward. This week, Martin came out bullish on using "white spaces" - the open spectrum between TV channels - in an open and unlicensed fashion. The FCC's Office of Engineering and Technology (Uber-radio-geeks) put five prototype/proof-of-concept "white spaces" devices through their paces to see if gizmos could be built to conduct spectrum sensing (i.e. what TV channels are in use, which aren't, use the ones that aren't being used), and the results [1] have been satisfactory.

Round two comes with last week's FCC report on AWS-3 spectrum; basically, it's a band that sits next to T-Mobile's network. The FCC would like to auction AWS-3 [2] with the stipulation that the winner would dedicate resources for free national wireless broadband access. It's an interesting idea and main cheerleader M2Z Networks says it would provide the national treasury with a dedicated yearly revenue stream in exchange for use of the spectrum to sell a higher-end (faster speed, no porn filters) for-pay service.

Of course, neither white spaces nor AWS-3 usage are sure things. The National Association of Broadcasters (NAB) is determined to crush any perceived threat to the use of "its" spectrum, while T-Mobile is likely to fight AWS-3 for the potential for it to interfere with its services.

- Doug [3]