MCI WorldCom Plans Wireless Test
(Didn't see this story posted on WCOM thread, so thought I would add it to your discussion)
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MCI Worldcom Plans Wireless Test
By Peter S. Goodman
Washington Post Staff Writer
Tuesday, March 28, 2000; Page E01
In the world according to Bernie Ebbers, the brash and towering chief executive of MCI WorldCom Inc., consumers have but two choices for high-speed Internet connections: the former Bell telephone companies, with their vestiges of monopoly, and the cable television systems that AT&T Corp., Time Warner Inc. and others are upgrading into telecommunications pipelines.
Now, a third option is on the way, MCI WorldCom said yesterday--a wireless technology that the company plans to test in a major way in Boston this summer, using the airwaves to bypass local telephone and cable systems. It already has launched tests in Baton Rouge, La.; Memphis; and Jackson, Miss., but on a much smaller scale.
At stake in the trial is more than the utility of the skies. In addition to being MCI WorldCom's chosen strategy for reaching customers, the technology known as MMDS--multichannel multipoint distribution service--has become the company's favored means of seeking federal approval for its pending merger with Sprint Corp. The merger has tripped basic antitrust concerns, because it would fuse the nation's second- and third-largest long-distance telephone companies. Yesterday, the Federal Communications Commission, which must approve the deal along with the Justice Department, announced plans for a public hearing April 5.
Ebbers dismisses worries about the long-distance market being outdated. The modern telecommunications battle focuses on the complete array of services, he argues. But he is not risking his merger prospects on that contention alone. Rather, he is selling the benefits of MMDS.
Sprint has MMDS plans as well. Together, the two companies have spent roughly $3 billion to amass the right to transmit through the skies using MMDS in areas around the country that hold more than 50 million people, about half in rural areas. Approve the merger, they tell federal authorities, and they will use MMDS to accelerate the rollout of high-speed Internet connections.
In an appearance in November before a national gathering of state utility commissioners--many from rural states--Ebbers presented MMDS as the solution to the vexing problem of delivering high-speed Internet access beyond cities.
"We have the solution for you," Ebbers told a questioner from South Dakota. "We will put it out as soon as you get our merger approved."
In testimony the same month in front of the Senate Judiciary Committee, Ebbers noted that his company and Sprint "have both invested heavily" in MMDS, a technology that he said "will allow us to get to customers who are beyond the reach of DSL"--digital subscriber line, a technology used by local telephone companies--"usually in predominantly rural areas."
Why, then, did MCI WorldCom select Boston, the nation's seventh-largest metropolitan area, for its first major trial market?
In an interview yesterday, Jonathan Mapes, chief technology officer for MCI WorldCom's wireless solutions division, said the company chose Boston because the city offers the ideal mix of the geographic and marketing characteristics that need testing.
"I had a real desire to look for a very densely populated area," Mapes said, explaining that such terrain would best test the ability of MMDS to navigate around trees, skyscrapers and other potential obstacles.
Indeed, sidestepping obstacles is one of the benefits cited by proponents of MMDS. Many competitive companies such as Teligent Inc. and WinStar Communications Inc. employ antennas on buildings, using "fixed wireless" to deliver Internet and telephone connections. But those ventures are aimed mainly at business customers. They use higher-wavelength spectrum well suited for transmitting over short distances within major cities, but they need "line of sight," meaning trees or buildings can block the signal.
MMDS uses a lower wavelength that, like television, seeps around some objects and travels farther, making it better suited for less densely populated residential areas. AT&T is testing a similar system using slightly different technology in Dallas.
In examining mergers, the FCC has sometimes imposed conditions aimed at bringing greater consumer benefit. Last year, when the FCC approved the fusion of SBC Communications Inc. and Ameritech Corp., it conditioned approval on enforceable pledges that SBC will compete for local service in 30 markets outside its core territory.
MCI WorldCom has already expressed willingness to entertain conditions, suggesting it would sell off Sprint's Internet "backbone"--the network of wires that carries computer traffic--to gain regulatory blessing. But asked last week whether the company would entertain conditions that it roll out MMDS in rural areas, MCI WorldCom's chief policy counsel, Jonathan Sallet, declined to answer, dismissing the question as "hypothetical."
"The policymakers are being walked down a path of buying future promises of technological and competitive benefits with no guarantees," complained Gene Kimmelman, co-director of Consumers Union, an advocacy group in Washington. "They're asking policymakers to shut their eyes to immediate competitive concerns and buy into a notion of competitive panacea that is fanciful and unenforceable."
¸ 2000 The Washington Post Company |
