Fixed Wireless resurgence

If you think fixed wireless is dead, think again. Even though the first three fixed wireless companies Ò WinStar, Teligent and Advanced Radio Technologies -cost investors almost $10 billion in losses, the fixed wireless industry is getting a second wind. Using a blend of open-spectrum frequencies, fiber, and generic equipment – fixed wireless and its descendants are making a stealth recovery.

Marian Dahl was quite frustrated playing Ultima Online with her daughter on her dial-up modem. The connections kept getting disconnected all the time The 67-year-old complained about this to one of her neighbors, who recommended that she should call Dan Stanton in Chiloquin, a quaint little rural community in Oregon; Population 1500. Dan Stanton is the chief operating officer of Always-On Networks that sells high-speed Internet access to the residents of Chiloquin using fixed wireless technology.

In Colorado, the Grand County Internet Services has cobbled together a nice little high-speed network for 10,000 odd residents of his county. Infact a lot of rural and remote Internet service providers are finding that while tough to deploy initially, fixed wireless broadband is a perfect way to blunt the attack of DSL and Cable Broadband.

Japan and South Korea are widely viewed as tomorrowÌs wirelessly connected societies, and most lament that United States is lagging behind the wireless times. While that is true of the large dense metro areas, it is prairies and one-horse towns in the Great Plains and the great North West, which have become unwired. Chiloquin is a microcosm of a future where wireless Internet access will be as universal as allergies in the summertime. Rural communities in the Northwestern United States and some parts of the Great Plains are now banking on wireless technologies to get their citizens connected. Just like Always-On, there are dozen-odd little companies that are using fixed wireless technology to make high-speed wireless Internet a reality.

Fixed Wireless and its Wi-Max descendents, are all part of a wireless technology bouillabaisse which, according to many would be ready for consumers to taste by 2007, at the earliest. ÏProbably the most exciting thing in computing today is all the things happening around mobile,Ó Bill Gates told attendees of Mobility Developers Conference in New Orleans, Louisiana this past March. ÏWi-Fi will explode and essentially be in most corporate environments, in most home environments, in all the locations where business people spend significant time, hotels, convention centers, airports, I think we can take that as a given. We’ll have Bluetooth for short area connections. So Bluetooth, Wi-Fi, and the pervasive data networks and third generation approaches,Ó he said.

The key to that is why Fixed Wireless/Wi-Max are beginning to take off. The resurgence of Fixed Wireless might come as a surprise to many, given that in its first version it proved to be a spectacular disaster. Teligent, WinStar and Advanced Radio Technology, three of early fixed wireless companies entered halls of infamy after going bankrupt in early 2001, costing investors billions. Having learned from their mistakes and rapid improvements in the equipment made by little known start-ups such as Soma Networks, Navini Networks, and IPWireless, Always-On and its peers have polished their business models.

From Mumbai to Mexico City, these fixed wireless companies are finding success and profits, making the wireless Internet a reality. Strategis Consulting has concluded that sales of Broadband wireless access equipment will go from around $557 million this year to over $2.5 billion by 2006. Even the big boys are getting interested. WorldCom, nee MCI, recently sold some of its fixed wireless spectrum and equipment to South Eastern Baby Bell, BellSouth for about $65 million, according to documents filed with the US Bankruptcy Court in Manhattan. Verizon, another baby bell is doing trials on the fixed wireless technologies, in Maryland-Virginia area, those familiar with the company say.

So far the fixed wireless technology has come in handy at locales, which are difficult to wire for cable or digital subscriber line access. Philip Urso and Jeff Thompson want to change that. They wanted to go after dense markets with lots of small and medium sized businesses, such as Boston, Newport and New York. The duo quit eFortress, a dial-up Internet service provider in 1999 hoping to start a wireless Internet Company. Their timing could not have been worse. Around about the time they started TowerStream; the likes of Teligent and WinStar were hitting an air pocket. Fixed wireless technology was being maligned in the press almost on a daily basis.

Urso and Thompson tried to raise capital, only to be rebuffed by the venture capitalists. Instead, in summer of 2000, they raised $5 million from friends and family and started TowerStream, Providence, R.I.-based fixed wireless service provider. The company wanted to sell wireless T-1 connections, which stream data at 1.5 megabits per second, to business customers using open unlicensed spectrum.

Urso and Thompson started to advertise their service Ò wireless T- connection for $500 a month – on the Boston area talk radio stations. In comparison, the traditional T-1 connections from phone companies such as Verizon Communications cost nearly $1200 a month. ÏThe first question people would ask us, ÎHow many customers do you have?Ì It took two sales people almost two weeks to sign-up our first customer,Ó recalls Urso, ÏI was holding my breath.Ó Since then the company has benefited from word-of-mouth publicity, signed up 500 customers and turned profitable in February 2003. Now TowerStream is in Manhattan and doing well. (Read my Business 2.0 story on TowerStream.)

Other service providers are finding success with fixed wireless as well. Andrew Lombard, who runs Dallas-based AirBand says his company is cash flow positive and will have $10 million in sales (and some profits) by end of 2003. ÏWireless is cheap and scalable, and it works,Ó says Lombard. The new fixed wireless operators have learned from their mistakes. They are frugal, mostly operate in unlicensed part of the wireless spectrum and use a more robust technology that is less dependent on line of sight.

AirbandÌs offers service in more than a dozen cities, at speeds ranging from 384 kbps to OC-3 levels (a whopping 155 Mbps.) Lombard says that their architecture is pretty much like the traditional fiber loops. Airband has created wireless loops around the cities in the 18 and 23 Gigahertz spectrum. In order to deliver service to end users, the company used the 5.8 Gigahertz band, which is open spectrum.

Teligent or WinStar spent $200,000 per points of presence, while Lombard says he spends about $4000 dollars per point of presence. They were spending $13,000 in roof rights alone per building while most of the new devices donÌt really need that. That is because most of the fixed wireless technologies are non-line-of-sight and donÌt need to have massive antennas on every rooftop. ÏIt takes about nine cell cites to cover the entire Dallas-Metroplex area,Ó he says.

The reason companies like Airband, TowerStream and others can offer cost effective solutions is primarily because of the technology developed by a new generation of start-ups such as SOMA Networks and Aperto Networks. ÏWe attacked the economics of the system,Ó says Greg Caltabaino, chief operating officer of SOMA Networks, and points out that it is as easy to use as unpacking, and plugging in to back of a computer and go surfing. ÏThis is a solution targeting a new type of Phone Company which is residential phone market, and those in small towns and rural communities,Ó says Caltabaino.

Aperto Networks which has products based on a new standard called 802.16, is winning big in the broadband wireless space Ò it has 60 customers worldwide and is beginning to gain traction in North America as well. ÏAcross the world there is big broadband wireless use, and we are being used to challenge the incumbents,Ó says Alan Menezes, vice president of marketing for Aperto.

So how does Fixed Wireless fit into the Ïever-connectedÓ wireless world? Most believe that fixed wireless will be a viable option to the cable and DSL broadband, its biggest role will be to act as a glue that binds the Wi-Fi hot-spots together. Fixed wireless will act as an invisible metro area network. For instance today, the Wi-Fi hot spots are connected to the Internet using T-1 connections, but in the future a simple antenna will bring bandwidth from a fixed-wireless base station, to a hotspot and then the Wi-Fi gear will be used to distribute it to customers in Starbucks as they sip their lattes.

T-Mobile, for instance spends about $15 million on T-1 connections every year, but if they used an 802.16 wireless solution, they can set their own network in a city for less than $75,000. A base station can cover about five radius miles, and using unlicensed spectrum can provide a total of 84 MBPS in bandwidth. A $1000 antenna would be enough to get a hot spot online.