Several big names in the cellular communications industry are backing a company called Ingenu that this week launched what it hopes will be a nationwide wireless network dedicated to the Internet of things.
Richard Lynch, the former CTO of Verizon Communications, is chairman of the Ingenu board. John Horn, the former CEO of Raco Wireless, a machine-to-machine company that worked closely with T-Mobile (TMUS) and was purchased by Kore Wireless, is the CEO.
On the board and acting as advisors for Ingenu are Ivan Seidenberg, former CEO of Verizon Communications (VZ), and Dr. Andrew Viterbi, former CTO of Qualcomm (QCOM). So what do these men see in Ingenu, which was formerly marketing the same technology as On Ramp Wireless? The company has raised more than $100 million from GE Ventures, ConocoPhillips (COP), NRG Energy (NRG), Third Wave Ventures, and others to build a wireless data network using a technology called RPMA, which stands for random phase multiple access. Without delving too deeply into the exciting world of spectrum management and modulation, they are building a network for low-bandwidth data transmissions using the same frequency band as Wi-Fi.
The idea behind what Ingenu calls The Machine Network is that companies can use the network to transmit very small amounts of data over fairly long distances at a low cost and be assured that they will arrive. The network also uses pretty significant security on the packets, which means that the data transmissions will be secure. The network will compete with similar low-data-rate networks for the Internet of things, such as those being built by SigFox in Europe and San Francisco. It will also compete with the LTE and 3G cellular networks that the carriers offer, although the argument against cellular networks is that those networks have so much more capacity and are generally more expensive, so using them for small scale transmissions from Internet of things is akin to using a firehose when a faucet will do.
Ingenu has built test networks in Dallas and Phoenix, which are popular places in the U.S. to test wireless networks of all kinds. It’s physically easy to set up wireless networks in those cities because of the lack of water and topography to interfere with the spectrum. The company has an ambitious plan and lots of capital, but what it is attempting is a big bet. History is littered with failed attempts to build new wireless networks. And while Ingenu has experienced executives on its side, there are several issues that could stand in its way.
The first is the network infrastructure. Ingenu says that it will need towers every 300 square miles to deliver a signal, which is actually not that bad. Most cellular networks require towers to be far closer together. However, on the receiving side, any device that wants to receive the Ingenu signal will require a special radio. Ingenu plans to license the radio technology out to other vendors since it doesn’t want to be in the hardware business. Still, any specialized radio product is going to add costs no matter who manufactures it.
There’s also an issue about how the Ingenu describes the RPMA technology in its technical white paper. It explains that it can distance its towers (which lowers its tower-siting costs) so much because it turns up the power on its antennas, which essentially makes them “shout” louder to be heard over many miles. This is fine for the towers, which have an external power supply, but for the receiving device, this could lead to problems when they are trying to send messages back to the tower. The louder a device “shouts” to be heard the bigger a drain the signal is on the battery, which means that any device on this network needs both a proprietary radio and significant battery power. That may limit the types of devices this network could be used for to larger items or those that don’t need to communicate as often.
That’s not a deal killer, but there’s also a philosophical issue with these low-data rate networks—will they be enough over time? The Machine Network offers 624 kbps download speeds, which is enough for tiny instructions and 156 kbps upload speeds, which is enough for basic time, temperature, and other sensor data. However, the network’s planned capacity could quickly become eclipsed by the needs of future products connected to the Internet of things. Take what happened with OnStar for example. It was once enough to have basic 2G cellular radios in cars for OnStar service, but once faster access was available software updates, real-time navigation, and streaming music all became must-have features.
A sensor that today reports temperature data may be repurposed tomorrow with a lens to deliver images or a mic to send sound. At that point, the low-data-rate networks look pretty old-fashioned.
Ingenu plans to offer its services to smart city, smart grid, and other Internet of things customers. It has not disclosed any customers at this time, but it says it has more than 35 networks across the globe in operation. For more on the Internet of things, check out this Fortune video:
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