Fixed-wireless technology cast in
supporting role
By John Borland
Staff Writer, CNET News.com
October 4, 2000, 12:15 p.m. PT
A communications technology that once appeared ready to make a
significant dent in the high-speed Internet market may be relegated to
niche status due to a changing telecom landscape.
At the peak of the excitement over the Sprint-WorldCom merger, it appeared that
the high-speed Net world would shortly be gaining a "third pipe" in the form of
widespread fixed-wireless Net connections. The technology came soaring out of
obscurity late last year, as all three big long-distance players announced plans to
offer the service commercially, and the erstwhile merger partners made it a
centerpiece of their joint high-speed Net strategy.
But, despite its big-name backing, analysts are now
saying, fixed wireless still will be stuck as a bit player in
the broadband industry for the knowable future. The "big
two" high-speed technologies--cable modems and
telephone companies' digital subscriber lines
(DSL)--seem to have nothing to worry about, at least
today, analysts say.
"Fixed wireless is a great option, but really in a
supporting role," Forrester Research analyst Mark Zohar
said. "Cable and DSL are going to jostle for the leading
role for the foreseeable future."
Fixed-wireless systems are mounted on rooftops, using a
large dish antenna. The technology uses different wireless
spectrum frequencies than mobile wireless systems and
provides local phone service and high-speed Internet
access primarily for business customers.
Forrester's numbers are even more daunting. Forrester
predicts that cable and DSL jointly will have 86 percent
of the high-speed Net access market by 2005, with fixed
wireless trailing with only 9 percent.
Near miss?
The fixed-wireless business has been building slowly for several years, with
companies like Teligent and Winstar Communications expanding in big cities, with a
focus on business customers. For consumers, little has been available other than
promises and trial projects.
The momentum began to shift last year,
when Sprint and WorldCom each
began buying up companies that offered
"wireless cable," or combination cable
TV-like and broadband Net
connections. After months of bidding
against each other, the companies
agreed to merge. But that plan crashed
to a halt this summer when the
Sprint-WorldCom merger ran into a
regulatory brick wall. Suddenly each
company was pushed back to the
starting line, each with
only half of an
ambitious high-speed
Net strategy in hand.
The two companies said they would
push ahead individually and have since
gone from trials into offering genuine commercial service. AT&T also has taken its
"Project Angel" wireless broadband initiative out of trials and into the market. But
without the merger of Sprint and WorldCom, the industry lacks a single giant
backer for the technology.
Moving ahead
All three of the giants, as well as some of the local telephone companies, are
pursuing the fixed-wireless strategy despite remaining hurdles.
Analysts note that the technology itself still has issues that keep it from being as
widely used as ordinary cable modems or DSL. Wireless signals still can
experience interference from buildings or even large trees between a home and the
antenna, making the technology difficult to use in densely populated city areas.
And like cable, it is a shared-bandwidth technology--as more people log on in a
given neighborhood, the download speeds available to any single person will drop.
Cisco and smaller companies such as Wi-Lan are developing a new set of
technologies intended to make fixed wireless more reliable, particularly in congested
urban areas. But adoption of that technology on a wide scale has yet to occur.
Sprint and WorldCom, at least, are optimistic that the wireless option can compete
on equal terms with cable and DSL.
"We see it as the 'third pipe,'" said Russ Robinson, a Sprint spokesman. But even
Sprint would be offering a "hybrid" of options that gives DSL to people in some
places and wireless to others, he said.
Over the last few months, Sprint has turned on service in five cities, with more than
10,000 customers in the two that have been operating long enough to start
reporting figures. The company announced service in Houston today. The service is
priced at $39.95--or whatever the local DSL market price is--and offers an
average of about 1 megabyte-per-second download speeds, the company says.
Since the collapse of the merger, WorldCom is focusing its fixed-wireless services
on the business market. It kicked off its first "soft launch" of the service in Memphis,
Tenn., on Sunday and still has commercial trials in several other cities. Typically, a
"soft launch" means the service is available and being sold commercially but has not
yet been marketed.
Not all telecommunications executives are as bullish on the technology, however.
"I don't think fixed wireless is a silver bullet in any territory," Qwest
Communications International CEO Joe Nacchio said at a recent technology
conference. "I think it's a good supplemental technology, but it's not a cure-all for
rural territories."
Qwest inherited some fixed-wireless technology from local phone giant US West,
which it bought earlier this year.
Analysts say the technology will continue to be most useful in areas where DSL or
cable lines haven't been upgraded, a category that still covers much of the country
and particularly rural and outlying suburban areas. Despite continuing technological
hurdles, it is easier to set up wireless towers in these areas than to invest the millions
of dollars necessary to bring high-speed cable or telephone lines out to many of
these regions, analysts say.
AT&T has said that it plans to use its Project Angel technology to fill in areas where
it doesn't own cable lines or its partners don't have upgraded lines.
Sprint's Robinson said that the collapse of the merger with WorldCom will
undermine that company's efforts to bring the technology to rural areas, however.
Some areas that are in the 35-mile radius of suburban towers still will be able to get
service, but the initial plans have been scaled back, he said.
In the meantime, fixed wireless will have to compete with DSL and cable on price,
and companies will have to convince consumers that it is a viable option, analysts
said.
"There truly is a consumer stigma issue around wireless," Forrester's Zohar said.
"Where fixed wireless will have to play is as a lower-cost option." |
