Here's one company's 'broadband service' experience as they tried to obtain a higher data rate connection to their offices. They chose a wireless option. Not clear whether this is MMDS, or some semi-802.11 unlicensed 2.4 GHz set up, or possibly something else (but Telxon makes 802.11 products):
(from Briefing.com 13-Apr-99)
A Bandwidth Anecdote
It's hardly news that bandwidth is the buzzword in the tech sector. For months, investors have been plowing into shares of cable plays such as AtHome (ATHM) and Broadcom (BRCM) and DSL plays such as Aware (AWRE) and just last week MGC Communications (MGCX). This bandwidth bandwagon has worked under the assumption that cable and DSL will both be big winners due to demand for high bandwidth.
There is one other entrant in the bandwidth battle, however, and it has been largely ignored -- wireless. Though there is widespread agreement that wireless has a bright future, many analysts believe that it is only a future and no present. The reason is simple -- satellite technology currently allows for fast, reliable, and affordable data downloads, but is slow and/or prohibitively expensive when it comes to data uploads. That is why DirecPC, the Hughes Electronics subsidiary (GMH), has never really caught on -- you need the satellite for downloads but must still rely on a standard dail-up modem connection for uploads.
The Briefing.com Experience
But there is more to wireless than DirecPC. To illustrate this point, we will take you on a personal history of our quest to upgrade Internet access at one of Briefing.com's branch offices. We wanted more bandwidth, and here's what we found.
At present, our office is connected to the Internet with a 56K frame relay connection (don't confuse this with the main Briefing.com office, which has multiple T1s), with the 56K circuit provided by the local RBOC (regional Bell operating company, or Baby Bell) and the Internet connection provided by a local ISP. The 56K line is no longer doing the job, so we went in search of more bandwidth. We paid $430/month for this 56K dedicated access; $350 for the ISP and $80 for the RBOC (please don't write about cheaper alternatives -- we know they exist, but we opted for quality at a higher price). These were the four options that we expected to encounter:
Upgrade to a full T1 frame relay through the local Bell, and up our ISP bandwidth as needed (probably 256K).
Get a 256K DSL connection through our local ISP.
Get a cable connection through AtHome/TCI.
Get a satellite connection through DirecPC.
The third option was the first to be dismissed, as the AtHome service is not currently offered in our area. We've heard many positive reports on AtHome, but they will lose our business for years because it is not available now, when we need it.
The fourth option went next. Unlike the average Internet user, we send a good deal of data upstream, and the slow speed and poor reliability of a dial-up connection made the DirecPC service unacceptable. It might do for home use, but it's not good enough when you need fast and frequent data uploads. It was also not price competitive, at roughly $900/month.
Option number 1 was next to go. It certainly would take care of our needs, as it would offer guaranteed higher bandwidth both upstream and downstream. One problem, however -- price. The ISP charge only went up marginally, to about $450, but the RBOC charge would go from $80 to $400. There's a little lesson here about why the RBOCs haven't been diving head first into DSL or other high bandwidth options -- they make a lot of money in the T1/T3 business. That's $400/month just for the circuit, forget the connection to the Internet. If that was our only option, we would have paid the price, but thankfully, it was not.
Option number 4 was compelling at first, but ultimately was tossed as well. Our ISP does offer DSL service, SDSL (symmetric digital subscriber line) in this case. The cost was reasonable at about $400/month, as this option reduced our RBOC charge to just $40/month for a copper line from our office to the ISP office. The problem here was that we had no bandwidth guarantees. It is widely reported that DSL will only work at locations that are within three miles of a phone company's central office. In reality, the signal degrades steadily the further you are; you don't turn into a pumpkin at exactly three miles. We are about two miles from the RBOC's central office, and the quality of copper wire in our area is reportedly subpar, so our chances of getting the bandwidth we were paying for were not good. Yes, we would almost certainly have seen an improvement relative to our 56K line, and at a lower cost, but fortunately, we had a better option.
Wireless Has Arrived
Option 5 was not even listed above because we didn't know that it was an option. Here it is -- wireless access to our ISP's T1 line. The quick dismissals of wireless technology have been due to the fact that most people have construed wireless to mean satellite. But wireless is more than satellite. We can buy a 5" square antenna, and with line of sight to a small antenna at our ISP's office, we gain access to their T1 line. We cut out the RBOC completely by going straight to our ISP. In the process, we jump from 56K to T1 (about 1.5M) speeds, while cutting our cost from $430/month to $400/month.
Here's how it works. A company called Aironet sells equipment for wireless LANs and WANs (local area and wide area networks). It requires small antennas and line of sight (within three miles) to an ISP's antenna. The signal can be relayed through several antennas to get to the ISPs office without losing bandwidth. We will get up to 2M (better than T1) potential bandwidth with our antenna, though Aironet systems go up to 11M. For an affordable price, our ISP can buy the equipment that will permit any business in town to connect to its T1 while bypassing the RBOCs, DSL, and cable.
It's incredible that this simple and easily applicable option has been missed by so many. Even Aironet is only now setting up a division to sell its equipment to ISPs. It previously saw schools and universities as having more potential for its business. What everyone appears to have missed is that wireless does not have to mean satellite. A combination of local wireless connecting to existing wireline technologies can easily bypass the cable and DSL options that have captured the market's attention.
We haven't installed the system yet, so we cannot yet vouch for its speed and reliability (though our ISP does employ the technology already). We will write again after we have had some experience with it. For now, though, suffice it to say that cable and DSL have competition, and competition that actually won our business.
And because we knew you would ask, Aironet is a division of Telxon (TLXN), a publicly traded company. You shouldn't view this as a recommendation to buy TLXN, however. Aironet is only a small division of TLXN, and TLXN has had many troubles over the past year, including a restatement of financial results. We mention this story not to promote TLXN, but instead to point out the risks inherent in cable and DSL investments.
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