The sky hits the limit
Canada once held high hopes for LMCS,
a high-speed wireless service that would beam
vast amounts of data through the air.
Now skepticism reigns as industry and government
have yet to get it off the ground.
TYLER HAMILTON
Technology Reporter
Thursday, September 2, 1999
globe&mail
Superfast. Good value. TrŠs cool. The sky is its only limit.
That's the premise and promise behind wireless cable, a technology that will send television, telephone, radio and Internet services zooming invisibly
through the atmosphere and beam them directly to a living room TV set or office computer.
Eventually.
Three years ago, Industry Canada opened up the country's airwaves for the cutting-edge technology known then as wireless cable and painted a
picture of gold at the end of a multimedia rainbow.
But the pot of gold has yet to arrive, as equipment delays, unforeseen technological hurdles, high costs and constantly shifting business strategies
have conspired to fritter away Canada's lead in what will be a major communications technology in the 21st century.
Jon Nicholls was one of the many contenders hoping to be an early player in the emerging technology of wireless cable, known in techie lingo as
LMCS, or local multipoint communications systems. In early 1996, his new media firm, ICE Integrated Communications & Entertainment Inc.,
joined a nine-company consortium that wanted to develop LMCS applications and infrastructure.
The consortium, led by a company called Dialogue Canada Multimedia Inc., eagerly applied for one of three available LMCS licences being
handed out by Industry Canada.
"With the combination of all our skills we thought we had a real crack at creating something different," says Mr. Nicholls, chairman of ICE,
describing what he believed could be the first true example of content convergence -- consumers getting TV shows, video conferencing, radio
programs, phone services and electronic commerce through an interface that looks like a Web browser. "Here was a technology that could carry
those signals," he says. "There was no other technology that could promise that."
The government had its own reasons to be excited. By licensing the country's airwaves for the technology in 1996, Canada would get at least a
year's jump-start on the United States and most of the world. LMCS would become the fourth lane on Canada's information highway -- next to
telephone, cable and satellite -- and would bring more choices to consumers and greater competition to an industry dominated by the phone and
cable firms.
It would also give Canadian communications equipment makers, such as Newbridge Networks Corp. and Nortel Networks Corp., a leg up on
their competitors.
In all, 13 groups applied for an LMCS licence. Cable and telephone companies were prevented from bidding to prevent them from muscling aside
smaller players.
After a lengthy bureaucratic exercise, closely resembling the judging process at a beauty contest, the Dialogue consortium came away
empty-handed. Mr. Nicholls would not get a chance to see his vision unfold.
Today, he -- along with thousands of consumers and businesses -- still waits for the wireless services and competition that Industry Canada
bragged about three years ago. Many industry observers wonder when, if ever, Canadians will get to experience the full potential of the technology.
Some even wonder if Industry Canada jumped the gun by licensing LMCS before the market was ready.
"They've taken so long to get off the ground, the head start they thought they had is rapidly dwindling," says Lis Angus, a telecommunications
consultant with Ajax, Ont.-based Angus TeleManagement Group Inc., referring to the government's three hand-picked licencees: WIC
Connexus, Regional Vision Inc. and MaxLink Communications Inc.
WIC Connexus was then a wholly owned subsidiary of broadcaster WIC Western International Communications Inc. of Vancouver. Having done
early research into LMCS, WIC Connexus was considered a shoo-in for a licence and the company was granted permission to offer the service in
about half of Canada's major cities and communities.
Regional Vision, a subsidiary of Canadian Satellite Communications Inc. -- itself partly owned by WIC -- received a licence to operate LMCS in
127 small communities.
And MaxLink, a consortium of nine partners claimed the major cities that WIC didn't get.
Slow path to the fast lane
Canadians already can surf the Internet and check their E-mail using wireless technology. All they need to do is connect their laptop or handheld
computer to a mobile phone. But the quality of the connection remains dubious and slow when measured by today's surfing standards. LMCS, by
comparison, blows such wireless technologies out of the water.
MaxLink and WIC, in particular, had great plans for LMCS. The technology instantly gave them something that, at the time, telephone and cable
companies were struggling to get: a high-capacity, two-way communications link directly to a home or business.
The phone network, for example, was built to send and receive signals, but the tiny copper lines entering a home were simply too puny to carry a
complex service such as video conferencing. The cable network had the opposite problem -- it was capable of carrying any type of content, but it
was based on a technology that could send data but not receive it.
LMCS theoretically offers the best of both worlds, simply by beaming its services directly to a small antenna attached to the side of a building. For
this reason, the slices of rainbow controlled by WIC and MaxLink were considered valuable property.
As property, however, these airwaves have followed a meandering path of development. WIC, for example, began experimenting with LMCS in
1992 as an alternative way of broadcasting television signals into homes. It was WIC's "wireless cable" idea that first piqued Industry Canada's
interest, prompting the ministry to open the airwaves. The data and telecommunications component came largely as an afterthought.
"It was all based around cable," says Bob Simmonds, chairman of wireless phone firm Clearnet Communications Inc., another unlucky LMCS
licence applicant.
Once the licences were handed out, WIC and MaxLink began to focus less on cable television and more on telecommunications, particularly data
and Internet services. They dropped the consumer or residential market out of their business plans, deciding instead to focus initial development on
corporate markets that have little need for broadcasting services.
"The vision of providing broadcasting didn't work," Ms. Angus says. "When it came down it, they couldn't figure out how to make a viable business
out of it."
The problem is typical for emerging communications technologies. Consumers live in houses that are often scattered across wide areas, while office
buildings are usually clustered in downtown areas or corporate parks surrounding a city. Since the LMCS radio towers that beam signals only have
a range of four or five kilometres, it's more economical to roll out the service in more densely populated areas. The more buildings each tower can
reach, the more paying customers you can sign up.
Trees -- or any other solid object -- have been another problem. LMCS is a line-of-sight technology, meaning its signals can only travel into areas
the eye can see through. "In a heavily wooded area, it's going to be a challenge," admits Mr. Bell of MaxLink. "In the high-rise, multiple dwelling
buildings that's not a problem because you're beaming signals from rooftop to rooftop."
So, technological barriers and economics have since made the average Canadian household a low priority for LMCS.
But consumers will eventually get their high-speed wireless service, MaxLink chairman Joel Bell insists, they'll just have to wait in line. "The
business users are here right now." He says there are residential users who would want the service, but they don't spend enough on telecom
services. They'll have to wait for what he calls "the second wave" -- sometime within the next five years when consumer spending increases.
Problem is, the first wave hasn't even hit shore, and the ripples so far have come in the form of small local trials and service prototypes.
"Did we expect it to happen sooner? Yes," says Mr. Bell, maintaining that commercial LMCS service in Ottawa, Calgary, Montreal, Toronto and
Vancouver will be available this year.
Industry Canada has also expressed disappointment. "It has fallen short of what we thought may have been possible at the time," says Earl Hoeg,
manager of wireless networks for the ministry.
Some observers say much of the blame rests with the service providers themselves, who haven't been aggressive enough in rolling the technology
out.
"When these guys applied for licences, they knew what they were getting into," says Eamon Hoey, president of telecommunications consultancy
Hoey & Associates Inc. in Toronto. "In fact, in my view, I think Industry Canada should pull their licences."
Ms. Angus, the telecom consultant, says Industry Canada should also shoulder some of the blame for getting ahead of itself and promoting the
technology prematurely.
"The government keeps trying to figure out, in advance, what the winning technology and winning providers are going to be. And every time they
try to do that, they get tripped up.
"Bureaucrats cannot invent the world."
By handing over licences to WIC, MaxLink and Regional Vision and sending them off into a world of investors and manufacturers not yet prepared
to embrace the vision, Industry Canada may have overshot its mark.
Many observers question the ability of Canada to sway any industry. Back in 1996, manufacturers, for one, were hesitant to make equipment to
support LMCS because the Canadian market alone is too small to justify development costs. With the U.S. market still a year behind in its
licensing process, only a handful of manufacturers jumped aboard. Even then, the equipment being made was far too expensive.
"It turned out they [the LMCS licensees] weren't able to get the kind of equipment they wanted until there was a U.S. market." Ms. Angus says,
adding that some equipment makers such as Newbridge were able to sell into the market early on. "But as far as service providers, I don't think
we're seeing any head start here."
Mr. Simmonds of Clearnet says it's easy to sympathize with the dilemma that Industry Canada regularly faces. The ministry, he says, is always
perceived as playing second fiddle to the more influential Federal Communications Commission in the United States.
"Do you wait for the FCC to do everthing first? Do we always look like the follower and just copy the FCC, never doing anything interesting and
unique that gives Canada an advantage?" At the same time, he says Industry Canada has to consider the question, "What will really make a service
at the end of the day?"
It's a question the government has begun to soberly answer. Industry Canada's Mr. Hoeg says the government is increasingly leaving the fate of
new technologies up to the markets.
"We're trying to get out of the business of trying to predict what technology will be used for. That's not the government's role," says Mr. Hoeg,
pointing out that auctions will be used in the future as a neutral method of issuing airwave licences.
'Our cries go out'
So where does this leave Canadians who are hungry for new services?
It's tough to say. More and more, LMCS is being viewed as a complement to the telephone and cable networks, rather than a competitor. A move
that could reduce competition even further is the government's recent decision to permit a merger among MaxLink, WIC and Regional Vision, with
MaxLink calling the shots. This technological monopoly appears to fly in the face of Industry Canada's original intention.
But creating such a monopoly may be necessary for MaxLink to compete against industry heavyweights. The federal government recently opened
up a new band of radio waves, able to carry the same video, voice and data signals as LMCS. It plans to auction these airwaves to the highest
bidder sometime next month.
This time, cable and telephone companies are permitted to join the bidding.
MaxLink has called the government's move "premature," claiming that greater competition will frustrate its plans by further fragmenting the market.
The government says MaxLink has been given more than enough time. "The LMCS service providers still have a fair lead," says Michael Connolly,
director of spectrum management at Industry Canada.
But MaxLink also has to contend with other technologies -- such as cable modems, satellite access and superfast telephone lines -- which have
evolved over the past three years to be cheap, powerful and readily available.
There are also competing wireless technologies. Look Communications Inc., partly owned by Montreal-based Teleglobe Inc., offers cable
television services to high-rise dwellings using a technology similar to LMCS, and plans to offer high-speed Internet service in the near future.
With the slew of new options available and more on the horizon, LMCS may have has lost its window of opportunity.
"Our cries go out," says Mr. Nicholls of ICE, thinking back at the vision he had for LMCS. "The biggest shame is I really do think the technology
has potential."
The good news? Canada's other three information highway on-ramps, wider and faster than ever, remain open for service.
HOW WIRELESS WORKS
When thinking about wireless technology, it helps to conjure up the image of a rainbow and its spectrum of different colours.
The airwaves that carry our E-mails, pictures, favourite songs and voices can be divided into different spectrum "ranges" or "bands." With ordinary
radios, the AM range stretches from 535 kilohertz to 1,600 kilohertz on the dial. The FM range is higher, spanning 88.1 megahertz to 107.9
megahertz.
Jump to 800 megahertz and you get into the band used to transmit cellphone calls. Each call that's made on a cellphone is assigned its own point
along that range. The more sophisticated PCS mobile phones are assigned by Industry Canada to the higher 2,000-megahertz -- or two-gigahertz
-- range.
Transmitting huge quantities of audio, video and text over a single wireless path requires a very high frequency, so LMCS operates at 28 gigahertz.
Other wireless "broadband" technologies occupy other ranges such as 24 gigahertz and 38 gigahertz.
-**
THE FOURTH ON-RAMP
Although great strides have been made in terms of widely delivering data through cable, phone lines and satellites, high-speed wireless access
remains under construction.
Network technology: Satellite
What's offered today: A wide selection of digital-cable channels; Bell ExpressVu recently launched an Internet service
Pros: Good for rural areas, or people looking for high-quality digital programs
Cons: Costly, not intended for delivering voice
Network technology: Cable
What's offered today: Used for TV and high-speed Internet access
Pros: Once a one-way network, two-way Net services are now available and affordable
Cons: Affordable voice service remains elusive
Network technology: Telephone lines
What's offered today: Local and long-distance voice service; conventional Internet access plus high-speed access
Pros: Affordable; companies have finally figured out how to quickly push a lot of data through skinny lines
Cons: Firms still can't use the technology to affordably deliver TV
Network technology: Wireless (LMCS)
What's offered today: MaxLink Communications' much-touted commercial service remains in trial phases
Pros: Relatively easy to build the infrastructure and deliver video, audio and Internet over one connection
Cons: MaxLink's LMCS service has been inhibited because of equipment delays, high costs and signal interference. |
