Hi Jason:
I hate to tell you that, but you are grossly
misinformed regarding broadband wireless and all
competing broadband local access technologies.
LOS wireless technology such as used by WCII
relies on roof antennas and is about 99.99%
reliable (see WCII's announcement on its
point to multipoint test of Nortel equipment in DC).
As for the wide availability of bandwidth, as far
as wireless is concerned, to ensure small roof
antennas, one needs to use frequencies beyond 20GHz.
The choices are TGNT (400MHz of spectrum at 24GHz),
LMDS operators (1.3GHz at 28Ghz-- note that WCII has
actually some of those licences, including the one for
the entire San Francisco area), and 38Ghz. The FCC may
auction in the future some additional bandwidth in the
39Ghz band. Satellite operators will have also some
bandwidth in the Ka band.
Thus, WCII does not have a monopoly, but it has the
largest bandwidth holdings (more than 700MHz in all
top 50 markets) of all broadband wireless service
providers, as well as a 2 years lead over the
competition.
Broadband wireless technology is unbelievably cheap to
deploy: point to multipoint allows the deployment of
T1-line equivalent at the cost of $200 per line.
Current T1 costs a few thousand dollars, and ADSL will
cost easily $1K per line.
Your estimate of $20 per line is a joke-- the cost
of an ordinary phone line (no data) for businesses
varies between $60 and $100. For data, the cost is
way higher: a T1 line costs $1K, an ISDN line (including
phone charges) costs about $125 a month, and the recent
rates published by GTE and US West for ADSL will be
a few $100's per month (you can always trust the RBOCS
for shooting themselves in the foot).
Fiber is totally uneconomical except for very large
buildings. The cost of trenching is astronomical.
As an example, our Campus (also in the UC system,
since I note you are a student at the UCLA business
school) spent $25M to connect all its buildings with
fiber. Most of the cost was trenching and passing the fiber.
Also, you keep harping on Vogel's numbers, but all other
analysts (Jack Grubman, Frank Governali) have almost
identical numbers. Even the most bearish of analysts
following WCII, Jack Reagan, views it as a short term
hold, but is very bullish long term.
Personally, I do not care if you are long or short WCII.
Like most others on this thread, I have spent inordinate
amounts of time researching all the technological and
economic aspects of broadband wireless, and I am very
comfortable with WCII's long term prospects.
To make a valid analysis of WCII, I would recommend that you
should examine Teleport's early years, the cable companies
in the 70's,or MCI and Sprint in the 80's. All of these
companies were massively in the red during their early years,
yet provided superb returns for their investors over the long
run.
Best wishes,
Bernard Levy |
