Free Wireless Broadband for the Masses Winners: Analysis Flawed

I was recently looking at these two articles from Motley Fool about the 5 Winners and 5 Losers of these potential changes by the FCC.

In two weeks, the FCC will vote on rules behind the sale of a sought-after chunk of airwaves. Chairman Kevin Martin wants to include the stipulation that the winning bidder must set aside 25% of the spectrum to roll out free Internet access to 95% of the country.

First the Winners:

Google: I agree here. The more people with broadband the more total web searches will go right to Google. They will clean up.

Logitech: His argument is that more Internet access means more webcams and headsets for Skype. Logitech will see larger sales but people currently use cellphones to communicate. Wireless broadband will probably be more useful for Android handsets that will connect to Skype and not computer headsets. If you have to boot up a laptop to use Skype then it will not have the same penetration as reaching into your pocket.

Amazon.com: I agree here since Amazon will get quite a few new buyers depending on how many new people embrace Free WiFi. Still there is like a 90% broadband penetration in places like Korea and Japan and they still have thriving shopping malls (well, when there isn't a recession.) The idea of people going to the store and trying on clothes, seeing an item up close, and having it the same day will probably stay with us no matter how deep the broadband penetration. However we will get more hybrid store/web-presence combos in the future. Kind of like how Circuit City has the web-order service that you can pick up at a nearby store in 24 minutes.

Ebay: He says that Skype and Paypal will dwarf the actual auction site in the future. I think Skype is only as good as its "always-on" access to mobile phones. If Skype has deep penetration into the mobile handset market then I will believe this. Also there needs to be a Skype enabled IPhone but AT&T would fight it tooth-and-nail. However, the first time your Skype enabled phone drops when you are in the middle of nowhere (i.e. where Free WiFi doesn't reach) you will be wishing for Verizon again.

Nintendo: I'm not sure about this one since free WiFi will probably help Xbox Live games more because there is just more network multi-player games for that console. Also digital distribution sound good on paper but Wired Broadband is barely fast enough to support very large downloads. Imagine having to download an entire Blue-Ray DVD game over a Wireless N or WiMax connection and then holding them on your fairly tiny Xbox 360 hard drive. Digital Distribution for consoles will only take off when you get that 10 Terabyte Drive add-on for the new Xbox 720.

Also in the Winners column but not mentioned in this article (for some unfathomable reason) is Cisco and other companies that make the routers that will channel all of this new bandwidth to 95% of the country. Everyone that wants to take advantage of this Free Wifi needs an N or WiMax enabled device that is conveniently sold by by Cisco and other network gear makers. I think Cisco will reap massive profits since in a way they will be selling the infrastructure that all of this Free Wifi will need to travel across.