In The Interests Of Preservation Of A Fine Thread.
Here is an article that puts some perspective on where I believe the last mile diverges for the smaller carriers and will eventually be a force to be dealt with in the industry.
I have been watching this unfold for years, just like many here I'm sure , and through all the hype and early - much too early - garble about a revolution in the internet build ,this wireless technology to the last mile is the cat's meow for areas not well served by fiber or copper.
Best Regards,
KC
Canadian ISPs tune in to wireless
By IAN JOHNSON
Globe and Mail Update
Friday, August 2 – Online Edition, Posted at 5:13 PM EST
Rather than simply reselling broadband services for the cable and telephone giants that own the wired networks, more and more Canadian ISPs are turning to an alternative: Wireless.
"These days you really need to own the network and control it in order for it to make business sense," said Karl Schein, executive vice-president at WorldWithoutWire, a wireless ISP based in Waterloo, Ont.
Most independent ISPs can't afford to duplicate the frightfully expensive cable and DSL wired networks that blanket metropolitan areas. And while Canadian regulators have ruled that the broadband giants must let other ISPs sell services on their networks to prevent a monopoly, in practice many independent ISPs say they have had trouble arranging deals that allow them to make a profit.
But economical new wireless technologies are opening new windows of opportunity for ISPs.
The cost of wireless equipment has come down to the point where ISPs coast to coast are setting up networks of their own, bringing high-speed services to communities that are too small or remote to warrant major cable or DSL infrastructure investments. In other cases, the ISPs are going up against the wired giants in their own back yards.
The move to broadband, whether wired or wireless, is crucial if ISPs want to stay in business, analysts say.
"Broadband is wiping dial-up off the map — just look at the market share they're taking from AOL Canada, which is stuck in dialup," said David Ellis, president of Toronto-based communications analyst Omnia Communications Inc. "The good news is that ISPs have found a way out of the squeeze. Using wireless [to deliver broadband], they no longer have to just act as resellers for big guys who were forced to work with them because of legal sanctions — a situation that obviously wasn't a recipe for a positive business relationship."
He said wireless has a huge advantage in terms of its low capital investment cost compared to wireline.
"This is a fabulous development for the market," Mr. Ellis said. "You can do more than one thing with this technology — it can be used for community networking, Internet access in areas where wireline is not economical, to solve last-mile problems for major ISPs, and so on."
The early wireless adopters, recognizing this, are already building up steam. There are services offering wireless speeds of 512 Kbps to more than 100 Mbps, and monthly subscription rates run anywhere from about $40 for home accounts to hundreds of dollars per month for high-bandwidth business connections.
"We saw the limitations of being a wholesaler to a company like Bell early on," WorldWithoutWire's Mr. Schein said. "They are not in any mood to speed up the rollout of DSL to many under-serviced areas that are screaming for broadband, so there was an opportunity to build our own [wireless] network and provide a product with broadband features, accessibility and affordability. Three years later, we've emerged with margin potential that I think is unmatched in the industry."
Competing with wired services
WorldWithoutWire resells ISDN and fibre in some areas, but its core business is wireless. The company caters specifically to businesses and telecommuters with a 10,000-square-kilometre network that covers urban as well as rural areas from Barrie, Ont., to London and Niagara (it has so far avoided competing with wired broadband in the heart of Toronto). The wireless network offers 1.54 Mbps for both upload and download, and starts at $350 a month for a static IP address and unlimited users (a 3 Mbps service is also available). WorldWithoutWire's customer base has increased 100 per cent annually for the past three years and is expect to grow at least 150 per cent this year, the company said.
"We offer a value proposition to customers: Broadband availability and affordability," Mr. Schein said. "Bell and Rogers are clearly the oligopoly here, and their role is to set price and performance expectations, and so on. And my challenge as a marketer is to know what businesses expect and position my product against that. Even in areas where DSL is an option, we perform quite well against it because we offer affordability and true broadband duplex services [the same speed for both uploads and downloads]."
The wireless movement is a small but steadily growing challenge to the big communications companies on the home side, as well.
One of the latest commercial wireless contenders is a consortium of Canadian ISPs — Internet Horizons Inc. of Kingston, Ont., NavNet Communications Ltd. of Halifax and Internet Solutions Canada Inc. of Hamilton. Using new low-cost wireless technology called Allumera, developed by Internet Broadcast Corp. (IBC) of Dallas, Tex., the consortium plans to offer users a wireless broadband service at a lower cost than systems operated by the major DSL and cable providers. The group says the technology can provide up to 10 Mbps service across large areas with a relatively modest infrastructure investment.
The Canadian project will be the world's first commercial use of the system. The initial network will be set up in the Ottawa area, blanketing the city and a number of outlying communities, according to Ed Arditti, vice-president of Windsor, Ont.-based Wyndham Hall Consulting and one of the group's organizers. It will cover a radius of up to 100 kilometres around the core of the city and should be running by fall, he said in a recent interview.
"It [wireless] is the way for the small dialup ISP ... to remain in business profitably to provide Canadians with choice in this time of price increases and traffic caps, since the ISPs cannot make money reselling DSL or cable," he said.
Wireless players aren't all new
One of the larger established wireless ISPs is Storm Internet, with services in the Ottawa area (covering Renfrew to Hawkesbury to Brockville) and Toronto. The company says its 37,000-square-kilometer network has more than 150,000 users. Its more than 11,000 commercial accounts range from high-tech companies to hospitals.
The company started as a dial-up provider in the early days of the Internet, and has experience in just about every type of Internet access technology. It first started using wireless six years ago.
"The Internet today is a commodity, a lifestyle necessity no matter where you live, but not every community is wired," said Terry O'Neill, Storm's vice-president of sales. "We've lowered the costs with the combination of the best technologies for the local terrain. We resell Bell copper DSL in the core, we resell cable where the cable companies are co-operative, and we even have fibre between some points. But wireless is our niche, it's where we can make real money."
Storm's webWalker radios can process at up to 11 Mbps, but its most popular service is 2 Mbps of throughput to residential clients for $50 a month (including a $10 equipment rental fee). Clients also pay a one-time setup fee of $400 for the installation of an antenna on their roof or existing TV tower.
"A 2 Mbps connection to a house is enough for telecommuting - you can do a secure VPN, encrypt it, go through firewalls to servers at work, do IP telephony, and so on. This isn't the future, this is here now and our customers are doing it," Mr. O'Neill said.
For commercial clients that want a static IP address, the fee starts at $150 a month for a 1 Mbps connection and ranges right up to a 100 Mbps connection if necessary.
"You have cable companies not allowing you to play, and then you have Bell allowing you to wholesale but they control the margin so you'll never get rich," Mr. O'Neill said. "But with wireless we control it, and we can now shoot 100 Mbps into a small town way cheaper than Rogers could ever string coax or Bell could string fibre."
Storm has deals with municipal governments to help keep its infrastructure costs down in rural areas. In the small town of North Gower, for example, the City of Ottawa let the company install its main transmitter/receiver on an existing radio tower, while in Carleton Place, Arnprior and Embrum, local government has allowed the company to set up on community water towers.
Wireless Internet access is already having effects on the local economies and growth of many rural areas. In the towns of Embrun, Russell and Metcalfe, for example, a house builder is now putting a Storm wireless box into each new home, because it is finding that many new buyers won't look at a rural home that can't get broadband Net access.
Storm even provides services for other communications companies using wireless. The phone calls from one independent phone company are carried from the community back to main telco switches in Ottawa over Storm's 100 Mbps wireless backbone, as are broadband services for a local cable company operating in Winchester and Cardinal, Ont.
Wireless reliability
Until recently , one of the biggest criticisms of wireless was reliability. But the quality of the equipment has come a long way in a short time.
"Our downtime is only about 53 minutes a year, just like a wired telco. Our list of mission-critical clients would shock you," Storm's Mr. O'Neill said.
WorldWithoutWire historically has scored 99.7 per cent uptime, which is a few hours total outage per year, WordWithoutWire's Mr. Schein added.
But that doesn't mean adopting wireless technology is a cakewalk for an ISP, by any means. There are caveats for would-be providers.
"This is not something for mom-and-pop shops," Mr. Schein said. "You really need a good knowledge of wireless technology. You also have to be good at negotiating leases for high points on buildings and towers, as well as being a good ISP. But it works, and we've got growth levels and growing pains to prove it."
That sudden growth has surprised analysts like Omnia's Mr. Ellis.
"Eighteen months ago I would have said there was very little hope for years to come for anything in residential broadband other than copper-based delivery," Mr. Ellis said. "A lot of the wireless contenders that the industry had high hopes for fell on their faces, or like LOOK, ran out of steam and out of money. It looked like the big four - Rogers, Bell, Shaw and Telus - would have the residential broadband game to themselves. But new technologies are giving wireless a whole new lease on life, especially in the last mile."
In fact, LOOK Communications Inc. relaunched its wireless broadband system on June 12, this time concentrating on the business market. Look ULTRAFAST Wireless high-speed Internet access is designed for small and medium-sized enterprises (SME) in the Greater Toronto and Montreal markets. The service ranges from 750 Kbps to 1.5 Mbps. LOOK said its primary targets are businesses located in underserved pockets of Ontario and Quebec, including industrial parks and commercial districts where there are no or few alternatives for high-speed connections.
"With this launch, we continue the execution of our new strategy to be the preferred alternative provider of broadband services to the SME market," said Paul Lamontagne, Look's president and chief executive officer, in a statement at the launch.
Community challenge
And not all the wireless challengers are commercial services. Some groups are trying to set up wireless community networks on a non-profit basis.
Waterloo Wireless, for example, is a non-profit organization that wants to provide free and low-cost broadband wireless access to the communities of The Regional Municipality of Waterloo. The plan is to use recycled PCs running Linux to power a grid of cheap 802.11b (Wi-Fi) wireless devices typically built for wireless networks inside homes and offices. Home-made antennas are used to boost the range of the off-the-shelf wireless equipment. Access points would be placed in homes, businesses, libraries and schools throughout the community, allowing blanket coverage for both PCs and mobile computers.
"This started as a thread on a newsgroup, where people were angry about bandwidth caps and things like that," Ian Howard, the organization's chairman, said. "Someone posted and said 'Hey, let's hope wireless technology takes off,' and from there the idea was spurred. The possibilities are enormous and the ability to connect anywhere in the community is extremely appealing to a lot of people."
The group has more than 100 members working to build the network. The membership is 80 per cent students from Waterloo's two universities and its college, which are very tech-centric. But there are early adopters, techies and business-oriented people from the general community, too.
"Right now, broadband is an oligopoly, which isn't good — having an alternative is important to a lot of people," Mr. Howard said. "We hope to be able to offer service for less than the big ISPs, but the other facet is that it's a community-based effort where people are relying on each other to build it. It makes people feel involved."
Waterloo Wireless has been testing the initial network with just a few access nodes from members' houses, since Rogers and Sympatico don't allow their customers to publicly share their Internet connections with others. But within a few weeks, Mr. Howard said the group expects to have a deal with a wireless-friendly ISP, and from that point the group will start to expand service into the community and start charging service fees.
"We plan to offer more services at a better rate than the big ISPs, because the network is pretty cheap for us. Within a year, we should have much of Waterloo covered," he said.
Wireless makes inroads
While wireless is still in relative infancy, it will likely start to make small but noticeable inroads on the big carriers' business in the coming months, according to Omnia's Mr. Ellis. And the double-whammy is that wireless is inching in on one side along with faster fibre on the other, which could begin to undermine the billions invested in copper-based community wiring, he added.
"In the next year or 18 months, the major incumbents are going to be very, very much on edge over the whole business of pricing of broadband and the introduction of tiers and bit-capping," Mr. Ellis said. "As a result of the whole controversy building up around these issues, any new technology alternatives with broadband potential have got to have Bell and Rogers and others worried, at least on the marketing side of things. It's going to be a stark reminder to a lot of consumers that there is another option out there, they aren't stuck with one approach to tiering and pricing by the [wired] incumbents if they want broadband."
But Storm's Mr. O'Neill said that while he expects huge growth within his industry, wired networks will never be replaced in urban areas. He predicts wireless will only dominate in outlying communities and niche markets that wired providers may never be able to service profitably.
"When you put fibre or copper or coax in the ground or on poles, there's a cost involved. It's efficient where the population is dense, in an urban core centre for example, so in those places is makes sense," he said. "But out to the surrounding suburbs and business parks, before even heading off to outlying communities, there's a high cost per mile that you either pay for up front or you build it into monthly return on revenue. We can service those clients much more efficiently with wireless."
WorldWithoutWire's Mr. Schein agrees: "Companies like ours will never replace or usurp someone like Bell, but I'll carve out my niche and service it with my strengths and be reactive and adaptive where any changes are needed."
Interactive
• Web Sites: Freenetworks.org Canada Wireless Storm Internet WorldWithoutWire
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