CAWS's official Press Release:
CAI WIRELESS SYSTEMS, INC. RESPONDS TO RECENT
NEWS
ALBANY, N.Y., December 6, 1996 -- CAI Wireless Systems, Inc.
("CAI") (NASDAQ NM: CAWS) has responded to the recent reports
that its strategic partners, Bell Atlantic Corporation and NYNEX
Corporation (the "RBOCs"), are retreating from the use of
Multichannel Multipoint Distribution Service ("MMDS") spectrum due
to alleged flaws in the technology. Citing preliminary test results of
digital systems built by CAI in Boston and Virginia Beach for delivery
to the RBOCs pursuant to the Business Relationship Agreement among
CAI, Bell Atlantic and NYNEX, the reports indicate that the RBOCs
are scaling back their ambitious video delivery strategies.
CAI has repeatedly dismissed reports that the MMDS spectrum is a
flawed delivery platform for digital subscription television service on
the basis that the tests conducted to date were preliminary tests of a
new technology, and that adjustments would be made in the design
demonstrating continued improvement in the coverage, enabling CAI to
reach the required coverage levels when CAI was required to do so.
The coverage limitations of MMDS technology, as well as other radio
frequency-based technologies such as PCS and cellular telephone, have
been well publicized. CAI has endeavored to design and build a digital
system that minimizes, to the fullest extent possible, such limitations.
Initial test results indicate that the 75% coverage pattern required by
the RBOCs is met in Boston and Virginia Beach in highly-populated
areas served from towers of approximately 400 feet in height, while
shorter towers produce less coverage. Overall, the 75% coverage
pattern in these markets can be achieved through relatively minor
modifications to the system, such as relocating some boosters to such
taller towers, which CAI believes are available. The CAI system in
Boston currently is capable of delivering service to approximately
1,000,000 homes, while the system in Virginia Beach is capable of
delivering service to more than approximately 300,000 homes.
"I find it curious that 1.3 million homes is not viewed as satisfactory
initial coverage for video service organizations that do not yet have any
subscribers," said Jared E. Abbruzzese, Chairman and Chief Executive
Officer of CAI. "The current coverage achieved in Boston is
comparable to the homes-passed coverage of the two largest wireline
providers in that market. The same holds true in Virginia Beach. We
believe these systems demonstrate that digital MMDS technology is a
legitimate delivery system for subscription television services."
"CAI continues to stand behind MMDS technology as a delivery
platform for video," said John J. Prisco, President and Chief Operating
Officer of CAI. "It is extremely unfortunate not only for CAI, but also
the entire MMDS industry, that some have taken preliminary and
incomplete data to malign the entire MMDS delivery platform. CAI
hopes that those marketing video subscription services using CAI's
spectrum are as successful in their initial marketing efforts as CAI has
been in its initial efforts to deliver digital signal."
As CAI has previously announced, it is engaged in wide-ranging
discussions with Bell Atlantic and NYNEX relating to its entire
relationship with the RBOCs, and hopes to reach agreement with the
RBOCs in the near future.
CAI has also previously announced that it is exploring mixed use of the
spectrum for video, voice and data in markets not governed by its
current relationship with the RBOCs, including a commercial trial of a
high speed Internet access service in Rochester, NY, where FCC has
granted permission for service of up to 500 customers. In addition, CAI
has applied for flexible use of the spectrum in the Hartford, CT market.
Also, through CS Wireless Systems, Inc., CAI's majority-owned joint
venture with Heartland Wireless Communications, Inc., a high speed
Internet access service is to be combined with a digital subscription
television service in Dallas, Texas, with an anticipated roll-out in 1997.
In addition, CAI has been granted authority to enroll up to 1,000
subscribers for one-way Internet service in its New York market.
"We believe that the regulatory approvals CAI has been granted to date
will give CAI the ability to demonstrate the flexible use of MMDS
spectrum and, if permanent authority by the FCC is given, could afford
CAI the opportunity to generate additional revenue streams," continued
Mr. Prisco. |
