Why the FCC’s 911 locating mandate was a colossal failure

Locating became a standard feature of mobile phone service in the years following the Federal Communications Commission’s (FCC) order released in 1999 that described in detail how mobile network operators must provide the locations of wireless 911 callers to emergency call centers. The decision to require wireless 911 locating was first announced in 1996, when mobile phones were mainly used outdoors. People still relied on wired phones indoors — and the phone company already knew the street address associated with each pair of wires.

Flash forward 16 years. A growing percentage of people use mobile phones exclusively. Most 911 calls are made from wireless phones, and most wireless calls are made indoors. That’s a problem, because the two solutions embraced by mobile operators to meet the FCC’s original wireless 911 mandate (one handset-based, the other network-based) are great for locating callers outdoors, but terrible for locating callers indoors. Even worse, indoor locating demands greater accuracy than outdoor locating. Emergency responders can usually spot an accident on the street once they get within several hundred feet. Indoors, even a small error could put emergency responders on the wrong side of a wall.

The problem became clear when data obtained under the Freedom of Information Act showed that over a 90-day period in Washington, D.C. only about 10% of more than 90,000 wireless 911 calls provided accurate location information. Stories spread quickly about 911 callers dying. In one case, a kidnap victim secretly dialed 911, but police dispatchers could only listen helplessly for 18 minutes as he was repeatedly stabbed.

What the FCC should have learned from this experience is that the evolution of technology and tech markets is highly unpredictable. Mapping out plans six or eight years into the future is risky. Most of what was achieved with the FCC mandate probably would have been achieved without it. The wireless industry was already convinced that there were vehicle locating business opportunities.

When the FCC first considered issuing a wireless 911 locating mandate, it assumed that the solutions would be network-based. However, companies such as SnapTrack were busy developing handset-based solutions — integrating GPS receivers and mobile handsets — and the FCC had to be politely reminded not to craft rules that favored some technologies over others.

Early this year, the FCC published rules requiring increasingly effective indoor locating (within 50 meters). Vertical location data must be provided within three years. The long-term goal is to provide “dispatchable” location information such as street address, floor number, and even apartment or suite number. A series of deadlines have been defined for the four nationwide mobile operators. Smaller operators may apply for extensions.

Despite good intentions, the FCC has once again set itself up for failure. The FCC continues to hold cellular operators responsible, as if nothing has changed since 1998. Most of the progress in indoor locating now comes from other companies. Cellular operators have less control over handsets since the introduction of iPhones and Android phones. And today it is possible to make wireless phone calls using Wi-Fi — completely bypassing local cellular operators.

The most accurate and reliable indoor locating systems are also based on Wi-Fi. Skyhook Wireless and Google pioneered the technology by “war driving” the streets of major cities around the world, identifying and measuring the signal strength of every Wi-Fi access point heard, and stamping each record with the vehicle’s exact location. Apple has since created a Wi-Fi database that is continuously updated using crowdsourced data from millions of handsets. TruePosition, a mobile locating company that acquired Skyhook Wireless in 2014, says tests show that Wi-Fi positioning can already locate mobile phone users to within 50 meters indoors about 80% of the time, meeting the FCC’s horizontal accuracy goal.

There are other applications that are helping to drive the development of more accurate and reliable indoor positioning solutions. However, most of these solutions are intended for private use. Venues with heavy foot traffic, such as airports and convention centers, are deploying sensor networks that detect the Wi-Fi and Bluetooth signals periodically transmitted by handsets. The information gathered can be used to plan the locations of concessions and to monitor the time required to get through security.

Brick-and-mortar store merchants are tracking shoppers to determine the effectiveness of advertising and to provide contextual engagement. There are several indoor “micro-locating” solutions that can serve this need.

One approach is dead-reckoning. Since the exact locations of building entrances are known, and GPS can identify which entrance was used, it’s possible to track users indoors using the inertial sensors found in many handsets. Rather than trying to pinpoint the user’s location on demand, it’s possible to calculate the user’s current position based on the direction and speed of travel starting at the entrance.

Another approach uses variations in the Earth’s magnetic field or Wi-Fi signals on a specific channel (Wi-Fi fingerprinting) to map the inside of a building. Consequently, this method is only useful inside buildings that have already been mapped — usually by someone determined to keep the information private. Beacons can also be used to locate handsets, but not nearly enough have been deployed to make a difference.

Everyone wants wireless 911 calls to include location information. And no one faults the FCC for trying to help make it happen. However, the FCC mistakenly believes it can order the wireless industry to produce innovations according to its schedule. The FCC also fails to realize that Internet companies, hardware manufacturers and software developers now have much more to say about indoor locating than mobile network operators.

Perhaps the FCC would get better results if it offered incentives and assistance to the broader industry rather than slapping mandates and the threat of penalties on four operators.

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.


Are cellular operators trying to kill Wi-Fi?

The Wi-Fi industry is very worried about cellular operators’ plans to deploy an unlicensed version of LTE, the global 4G mobile phone standard, in spectrum already used by Wi-Fi networks.

In response, the Wi-Fi Alliance wants the Federal Communications Commission (FCC) to delay approval of unlicensed LTE (LTE-U) products that play by the same rules that enabled Wi-Fi to become what the Alliance describes as an “enormous economic engine.”

Specifically, the Wi-Fi Alliance has asked the FCC to withhold equipment authorizations for LTE-U products until the Alliance has developed and performed its own coexistence tests.

It seems unlikely that anyone is out to destroy Wi-Fi. We need to put this all in perspective.

There are more than 6 billion mobile phone subscribers worldwide, and they are upgrading to smartphones that generate dozens of times more wireless traffic than the basic mobile phones they are replacing.

The mobile phone industry believes, with good reason, that in order to continue growing, it is going to need 1,000 times as much capacity as it has today by the late 2020s. Although it’s going to require more than just additional spectrum to achieve a thousand-fold capacity increase, finding additional spectrum is a big part of the equation.

The capacity increase is needed not just to serve more users, but to deliver more data to each user. A technique called “carrier aggregation” that is part of the LTE standard enables mobile phone operators to create virtual broadband channels by stitching together non-contiguous channels scattered around the radio spectrum. By developing an unlicensed version of LTE, the cellular industry has theoretically added hundreds of megahertz of spectrum in the 5-GHz band to its pool of available spectrum.

The cellular industry insists that LTE-U is not a threat to Wi-Fi. LTE-U will use a single 20-MHz channel out of the approximately 500 MHz available in the 5-GHz band. According to the LTE-U Forum, LTE-U shares spectrum with Wi-Fi at least as well as different Wi-Fi access points share spectrum with each other. And many of the companies promoting LTE-U are heavily invested in Wi-Fi.

Still, the Wi-Fi community’s anxiety is understandable. Millions of homes and small businesses have come to depend on Wi-Fi. One way that the cellular industry has responded to soaring demand has been to offload data traffic to Wi-Fi networks. However, cellular operators have never been completely comfortable handing off subscribers to networks that they don’t control. LTE-U is designed to use a combination of licensed spectrum (the “anchor” spectrum, which handles all of the signaling and control) and 20 MHz of unlicensed spectrum (used to provide additional downlink capacity).

One fear is that mobile phone operators want to use LTE-U to head off competition from Internet companies (such as Republic Wireless) that use a mix of Wi-Fi and cellular access (with a preference for less expensive Wi-Fi). In a worst-case scenario, we could be witnessing an attempt by the cellular industry to muscle its way into and eventually dominate the 5-GHz band in public venues. A perhaps more realistic fear is that LTE-U isn’t the good neighbor that proponents claim and that it may disrupt nearby Wi-Fi hotspots.

The two sides have been busy conducting and documenting various performance tests. LTE-U proponents present test results that show LTE coexists well with Wi-Fi — that adding an LTE-U node to a location is no worse than adding another Wi-Fi node. The Wi-Fi industry presents test results that show LTE-U nodes do not coexist well with Wi-Fi and cause neighboring Wi-Fi nodes to experience severe performance degradation. However, since commercial LTE-U equipment isn’t yet available, it was necessary to emulate LTE-U. My bet is that each side configured the equipment to produce the results it wanted.

To get a handle on all of this, we need to remember what unlicensed operation is all about. Many years ago, frequencies were allocated in different parts of the radio spectrum for industrial, scientific and medical (ISM) bands. The original purpose was to accommodate devices that generate radio signals for purposes other than communicating, such as microwave ovens. Later, it was decided that these bands could also be used for communicating, with some caveats. The communications devices must either transmit at very low power levels or use spread spectrum, a technology that is less likely to cause interference. FCC licenses would not be required to operate the devices, but they would not be protected from receiving interference. The rules governing these devices have been purposely kept simple, so they say nothing about how devices in the same vicinity must share the spectrum.

Wi-Fi has been phenomenally successful, in part, because the standards developed by the industry specify methods for neighboring networks to share the radio spectrum, such as by scanning for clear frequencies and using a “listen-before-talk” protocol. But Wi-Fi devices have always had to contend with non-Wi-Fi devices operating in the same spectrum that may not make any effort to share the spectrum.

Surely the solution is not to change the rules — rules that have been very successful until now — in the middle of the game. Others should have the same right to pursue business opportunities made possible by the unlicensed rules.

To start, everyone needs to calm down. We will know much more once the first LTE-U nodes are deployed. Not just how well LTE-U coexists with Wi-Fi, but how sincerely LTE-U equipment makers and operators are committed to working with the Wi-Fi community to avoid or at least minimize interference problems. It’s doubtful that cellular operators will recklessly deploy LTE-U and risk alienating their own subscribers.

I see two ways to head off serious problems. First, the LTE-U and Wi-Fi camps should work together on a voluntary basis to ensure optimal spectrum sharing. Neither side should seek special privileges from the FCC. And neither side should attempt to pull rank on the other.

Second, it’s understandable that some in the Wi-Fi industry feel they are at a disadvantage in that the cellular industry is vying for unlicensed spectrum to be used in addition to its substantial licensed spectrum. The Wi-Fi Alliance needs to develop a more effective spectrum strategy — a strategy that aggressively pursues the best options for additional unlicensed and perhaps even licensed spectrum for carrier Wi-Fi.

The ultimate solution is not more government regulation; it is smarter unlicensed devices that find and use clear channels so effectively that over time they are granted access to more and more spectrum.

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.

Wi-Fi challenges Bluetooth for the beacon market

The proximity engagement market just became more competitive. The Wi-Fi Alliance recently unveiled Wi-Fi Aware as an alternative to Bluetooth Smart, the technology behind the Apple iBeacon and Google Eddystone specifications.

Question: Is Wi-Fi Aware sufficiently different and compelling to entice beacon device and proximity engagement application developers?

A quick refresher: Proximity engagement solutions bring to life places and objects in the physical world by tagging them with digital content. Apple’s iBeacon relies primarily on smartphone apps, and most iBeacon developers are focused on retail store shopper engagement. Google’s Eddystone aims to create a “physical web” of sensors and machines accessed via mobile browsers. Both emphasize the use of small, inconspicuous devices that broadcast the same short message over and over, can be deployed practically anywhere, and can run for years off a coin cell battery.

The beacon market is just getting started. There are on the order of 100,000 beacons in use today. That number could grow rapidly to 50 million. Although many companies have invested money and resources in Bluetooth beacons, it’s not too late for a competing technology to help drive and ultimately dominate the market.

Like Bluetooth Smart, Wi-Fi Aware provides a generic framework for proximity engagement. However, the Wi-Fi Alliance emphasizes three key differences that it believes set Wi-Fi Aware apart.

First, Wi-Fi Aware is designed to leverage Wi-Fi infrastructure. Wi-Fi infrastructure devices will be able to simultaneously serve as access points and proximity beacons. For instance, a large retail store that already uses Wi-Fi for inventory management could add shopper engagement to an existing network. The beacons in dual-mode devices won’t need batteries and can be easily added to Wi-Fi network management systems. According to the Wi-Fi Alliance, some existing Wi-Fi infrastructure is firmware upgradable to Wi-Fi Aware, although it’s up to individual manufacturers to decide whether to offer upgrades.

Second, Wi-Fi Aware offers its own high-speed communication link. Bluetooth beacons must rely on separate cellular or Wi-Fi connectivity. That can be a problem for Bluetooth beacons. For instance, a Bluetooth beacon inside a building that relies on cellular connectivity may work for some mobile subscribers but not others, because not all carriers have the same coverage. (Some mobile phone frequencies are better for penetrating buildings than others.) While a venue operator could always deploy separate Bluetooth beacon and Wi-Fi networks, it may be easier to deploy and manage a single “dual-mode” network.

Third, Wi-Fi Aware is bidirectional. This isn’t really different. Bluetooth Smart is also bidirectional. While Bluetooth beacons are typically configured to operate in broadcast-only mode, most can receive data for monitoring and control purposes. The Bluetooth community chooses to emphasize that unidirectional beacons can run for years off batteries. The Wi-Fi Alliance chooses to emphasize the advantages of bidirectional proximity engagement via line-powered devices.

It’s not surprising that the Wi-Fi Alliance positions Wi-Fi Aware as being able to do everything for proximity engagement that Bluetooth Smart can do — and more. Being able to leverage the vast and growing Wi-Fi infrastructure is a major advantage, but being late to market is a problem. There are at least two leading vendors already offering Wi-Fi access points with integrated Bluetooth beacons (Aruba Networks and Cisco Meraki). The Wi-Fi Alliance’s best strategy for getting the industry to embrace Wi-Fi Aware is to insist that it was worth the wait and any extra effort.

The first Wi-Fi Aware products may not appear until the end of the year, so we won’t know the answers to certain questions until we see the products in action. The Wi-Fi Alliance has put considerable effort into making Wi-Fi Aware power efficient. Will we see small, battery-operated Wi-Fi Aware beacons that are competitive with Bluetooth beacons (which are even available as stickers)? Some proximity engagement markets require a critical mass of users. How long will it be before there are tens of millions of Wi-Fi Aware-capable mobile devices? Finally, will Wi-Fi access points with integrated Wi-Fi Aware have any performance or functional advantages over Wi-Fi access points with integrated Bluetooth beacons?

In 2005, the Bluetooth Special Interest Group (SIG) announced that it was working with other industry groups to develop a high-speed mode based on a technology called “ultra-wideband.” However, ultra-wideband development ran into some hitches and the Bluetooth SIG concluded that it made more sense to simply adopt the proven and popular Wi-Fi technology for its high-speed mode.

Given that history, it seems reasonable to ask why the Wi-Fi Alliance didn’t choose a proven and popular technology, Bluetooth Smart, as its proximity engagement technology. After all, the main advantages of Wi-Fi Aware — working with Wi-Fi infrastructure, providing high speed connectivity, and serving bi-directional applications — can all be realized using a combination of Bluetooth Smart and Wi-Fi. Only time will tell if Wi-Fi Aware is a necessary alternative or a missed opportunity.

Beacon developers, what do you think?

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.

What to expect from 5G wireless

As we head into the 2020s, mobile phone networks will have to handle much more traffic and many more connections.

There are roughly 6 billion mobile phone users worldwide, and they are upgrading to smartphones. The typical smartphone generates more than 30 times the traffic of the average basic mobile phone. Although the Internet of Things (IoT) is just getting started, it could easily require billions of new connections to sensors and machines.

It’s not too early to start planning for the next-generation wireless technology. 5G wireless is likely to be a constellation of enhancements rather than a single technological breakthrough. As we’ve seen in the past, the wireless industry isn’t going to abruptly switch off 4G and turn on 5G. Instead, expect “4.25G,” “4.5G,” and “4.75G” devices and networks to be gradually introduced over the next several years. Each incremental improvement will create new opportunities for users, enterprises and entrepreneurs.

The never-ending quest for more spectrum

Despite its maturity, the wireless industry continues to invent new ways to squeeze capacity out of existing spectrum. But doubling or even quadrupling capacity won’t be good enough. The wireless industry is literally asking for a 1,000x capacity increase. In addition to basic performance improvements, that is going to require more spectrum and more aggressive reuse of existing spectrum.

The good news is that at really high frequencies, bandwidth is abundant. In part, that’s because it’s easy to find large blocks (say, 500 megahertz) of unused spectrum at frequencies such as 60 gigahertz. Unfortunately, signals at those frequencies don’t travel far or around corners, and electronic components tend to be pricey. Over the short term, expect the mobile phone industry to be granted limited rights to share lower-frequency bands (below 6 gigahertz) that were allocated to other services years ago.

Also expect a big increase in the deployment of small cells. Mobile phone networks were originally built for car phones. Thanks to the development of pocket-size handsets, today’s networks largely serve indoor users. Although outdoor cell sites can often reach users indoors, indoor cells are needed to ensure coverage throughout large buildings and in homes and buildings far from cell sites. Putting small cells indoors ensures that more bandwidth is available for both indoor and outdoor users. Increasingly, mobile network operators are permitting home and business owners to install small cells using the operators’ licensed spectrum — as long as the owners provide the electricity and broadband Internet connections at their own expense.

The technology under the hood

There will be some enhancements to the mobile phone air interface, as well. 5G wireless will make more aggressive use of MIMO technology. MIMO exploits multipath propagation — which until recently was considered about as useful as static — to multiply the maximum transmission rate. Today, MIMO is enabling 4G networks to achieve speeds of hundreds of megabits per second. Tomorrow, it will enable 5G networks to exceed 1 gigabit per second. Unfortunately, radio is a shared medium and individual users almost never experience such high speeds. But there is a MIMO solution for that, too. Multi-user MIMO segregates users so they aren’t all contending for the same resources. Although multi-user MIMO reduces the (theoretical) peak speed, it increases the (real) average speed. Other enhancements to the mobile phone air interface will enable networks to more efficiently serve a mix of high-speed (multimedia) and low-speed (telemetry) applications.

There are some potentially disruptive wireless technologies in the works that could change the course of 5G wireless. Kumu Networks’ self-interference cancellation technology promises to double spectrum capacity and simplify frequency planning. Basically, this technology enables a mobile phone to hear the whisper of distant signals under the roar of its own transmitter. MagnaCom, an Israeli company, has developed a new multidimensional signaling technique that it says provides a 10x performance improvement. And San Francisco-based Artemis Networks claims its personal cell (“pCell”) technology delivers a 35x capacity increase using existing 4G devices. Rather than avoiding interference, the firm’s cloud-based solution puts interference to work. It’s an intriguing but highly controversial idea that has so far only been demonstrated under controlled conditions.

Everyone and everything

There are also some industry trends that could alter the trajectory of 5G wireless. Internet firms are offering mobile services created by stitching together coverage provided by a mix of mobile and Wi-Fi networks. Expect more seamless interoperation between mobile and Wi-Fi networks in the future. Beacons (using Bluetooth or the new Wi-Fi Aware protocol) are attaching information and services to places and objects in the physical world, potentially triggering yet more growth in wireless traffic. With almost as many mobile phones in use as there are people in the world, the next big growth wave will likely be connecting “things,” such as automobiles and parking meters.

5G wireless is important because it will bring us a step closer to a world in which everyone and everything is always connected. The opportunities to observe and manage people, places, and things will multiply, enabling the next successful mashups and shared economy business models.

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.

The Apple Watch’s identity crisis

Slice Intelligence reports that sales of the Apple Watch have plummeted 90% since it was introduced. Some people say that’s no big deal: Hot new Apple products often rack up astronomical sales in the first few days and then settle down to a more reasonable pace.

I have a different take. Steve Jobs may be gone, but his reality distortion field persists. The Apple Watch’s initial success was mainly if not entirely due to the Apple mystique. Most early buyers wanted to be the first kid on the block with an Apple Watch. Now we are seeing what ordinary gadget shoppers think. Apple Watch has yet to find its niche.

For starters, the Apple Watch suffers from an identity crisis. It looks like a wristwatch and is called a “watch,” but it acts like a remote control for the iPhone. Why position a smart device that does so much more than display the time as a watch? Most people no longer wear wristwatches. Today, everyone carries a phone that shows the time with incredible accuracy. Plus, the time is often displayed on the things around us: from ovens to automobile dashboards to desktop PCs. The idea of wearing a device on your wrist that first and foremost tells time is so last century. The misnamed Apple Watch is really our first glimpse at an entirely new product category.

Whatever the Apple Watch is, it’s not yet fully baked. Steve Jobs had an uncanny ability to create fundamentally new products that were instant successes. He made us forget that such successes are the exception rather than the rule. Usually, new products require years of trial-and-error development and testing before hitting stride. Without Jobs to guide it, the Apple Watch is just another cool product with the Apple logo and a high price tag. It’s going to require time, patience and determination to enhance and refine this product until its true value and purpose come into focus.

For now, the Apple Watch is more of a status symbol than a utilitarian product. That’s why the product comes in 38 different models, ranging in price from $350 to $17,000. Suffice it to say that $350 is a little high for an iPhone accessory — while $17,000 is just right for the man or woman who has everything.

Unlike the iPhone, the Apple Watch is not a product that you can’t live without. Everyone needs a mobile phone to stay in touch and access information. The Apple Watch’s main purpose, however, appears to be sparing iPhone owners from having to reach into their pockets or purses to pull out the device. That’s a small convenience, but it doesn’t justify the Apple Watch’s cost, the need to charge it nightly, and having to remember to put it on before leaving home. As things stand, the Apple Watch mainly appeals to diehard gadget geeks.

Don’t get me wrong. I’m not saying that the Apple Watch was a big mistake. It is an impressive product that is packed with features. But it is clearly in its infancy. The Apple Watch’s ability to display messages and information, to collect data and report on the wearer’s health and fitness, and to facilitate mobile payments all suggest that Apple is on to something. It’s just that neither Apple nor anyone else is yet sure what that something is. The Apple Watch, if given the opportunity to fully evolve, could become an incredibly useful tool. Perhaps by gathering health data 24/7 from millions of people we will learn to detect health problems earlier and avert life-threatening incidents. Or perhaps the Apple Watch will display messages triggered by GPS and Bluetooth beacons making it the first augmented reality product “for the rest of us.”

Apple, this is your wake-up call. Now show us that you are in for the long haul to make the Apple Watch a product that most users can’t live without.

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.

Retail industry SOS: Can Bluetooth beacons save the day?

These are tough times for most brick-and-mortar stores. Although online sales are still only about 7% of total retail sales, online sales are growing about three times faster than in-store sales. Plus, the way consumers interact with retail stores is changing: People increasingly use mobile phones to locate stores, check whether items are in stock, and compare prices. If brick-and-mortar stores want to prosper (or even just survive), then they must adapt to the new always-connected environment.

Fortunately, a simple yet powerful tool has emerged that could help retail stores up their game. Bluetooth beacons don’t do much; they merely broadcast the same short message over and over. However, when Bluetooth beacons are used in tandem with smartphones and Web content, they bring places and objects to life. Specifically, Bluetooth beacons enable merchants to provide smartphone users personalized shopping experiences and self-service options. That empowers merchants to maximize sales, reduce costs and cut down on theft.

The biggest question confronting retail store merchants planning to deploy Bluetooth beacons is: What’s the best strategy? There are several components to an in-store beacon strategy. Should merchants try to engage every smartphone user who walks in the door, or focus on a specific group? What’s the best way to get shoppers to opt in and to keep them from opting out? How can merchants get the biggest bang for their beacon bucks? How should beacons be deployed physically? Finally, do Bluetooth beacons pose security risks and, if so, how can they be managed?

I’ve reached out to people who work day-in and day-out on these issues and here are my conclusions about the best ways to use Bluetooth beacons in retail stores.

Bluetooth beacons should be employed to deepen relationships with existing customers rather than attempt to engage with everyone. Acquiring a new customer can cost 10 times as much as keeping an existing customer. Therefore, a store merchant’s top priorities should be enhancing the shopping experiences of its best customers and learning more about their likes and behaviors.

According to Omer Artun, CEO of predictive marketing cloud company AgilOne, Bluetooth beacons should be managed like loyalty programs. The best way to get customers to join and use loyalty programs, and to keep them from dropping out, is to periodically reward them with things that are genuinely valuable, such as discounts, giveaways and invitations to special events. One great thing about Bluetooth beacons is that they can be used in combination with loyalty programs, automatically issuing rewards whenever a program member visits the store, and enabling them to redeem rewards instantly.

Merchants will get the most out of Bluetooth beacons by targeting customers who have installed their branded apps. Branded apps give merchants greater control and a more complete picture of customer behavior.

There is also a role for shared apps and ad exchanges such as those offered by Swirl Networks. They can be used to acquire new customers and advertise merchants’ apps — often in conjunction with beacons operated by a third party such as a mall owner.

Bluetooth beacons should be deployed to create distinct interaction zones. In theory, multiple beacons can be used to pinpoint a shopper’s location. But people experienced with the technology point out that interference, noise and transmission delays make pinpoint-locating impractical. Companies that specialize in enabling consumers to locate products within individual stores agree. Point Inside, whose StoreMode platform is used by Target stores, recommends avoiding overlapping coverage by configuring beacons to transmit with minimal power. Aisle411, who provides product maps for Walgreen’s stores, believes beacons should be used along with other technologies (such as magnetic fingerprinting and dead-reckoning) to track and interact with shoppers.
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Since Bluetooth beacons should primarily target existing customers, security is absolutely essential. Security adds complexity and can reduce battery life, but these are worthwhile tradeoffs. Because most Bluetooth beacons can be configured over-the-air, it’s imperative to prevent vandals and competitors from reconfiguring them. Merchants should assign different passwords to different beacons, periodically change the passwords, and monitor Bluetooth frequencies for suspicious activity. Rogue beacons, which could be used to hijack customers, are an even bigger risk. Beacon supplier Gimbal has been at the forefront in developing secure beacons that address this risk.

Can Bluetooth beacons revitalize retail store sales? Both online and brick-and-mortar stores are continuing to evolve. Online stores are adding physical presence through the use of lockers and drones, while physical stores are enhancing their online presence through apps and now beacons. Retail store merchants must take the time to learn the best ways to employ beacons. Bluetooth beacons are going to be an essential tool for delivering superior shopping experiences and leveraging big data to engage shoppers in ways that drive sales.

This commentary by Ira Brodsky first appeared at Computerworld. Brodsky is a Senior Analyst with Datacomm Research and is the author of five books about technology. Brodsky focuses on mobile solutions for payments, retail automation, and health care.