Bernard, according to this NY Times article from July, LMDS is well suited for Manhattan, because the signals are able to bounce off of buildings with no degradation. LMDS does NOT suffer from the line-of-sight limitations inherent to wireless cable technology:
July 7, 1997
Wireless Service May Be Coming Soon
To a Windowsill Near You
By MARK LANDLER
NEW YORK -- Shant S. Hovnanian is nothing if not patient. For more than a decade, Hovnanian has been the lonely advocate for a wireless technology that he says can be used to beam television pictures, phone conversations and Internet access to small dishes mounted on windowsills.
Hovnanian's company, Cellularvision, has persuaded 14,000 customers in Brooklyn and Queens to install its squat, boxy receivers, which enable them to receive 49 channels of television. But the company has been unable to spread its wings farther because of a dispute with other companies that laid claim to its slice of the airwaves.
Now, after five years of relentless lobbying in Washington, Hovnanian has finally prevailed. And he is determined to create the nation's first integrated wireless provider of voice, video and data services. If you live in the five boroughs of New York City, Cellularvision is coming to a microwave tower near you.
"One goal is to turn wireless into a broadband pipe capable of delivering all kinds of services," said Hovnanian, a burly, genial 38-year-old, whose family built houses in New Jersey and got into telecommunications by stringing cable systems to those homes.
His technology goes by a forbidding name: local multipoint distribution, or LMDS. Basically, it works like cellular telephone service, in which a signal is transmitted from a central tower to a small antenna. But unlike cellular, it is beamed to many receivers. It is also remarkably pliant: the signal can bounce off buildings and still be received with clarity, which makes it well suited to the canyons of Manhattan.
CellularVision's commercial license gives it the exclusive right to provide LMDS to the 3.2 million households in the New York Primary Metropolitan Statistical Area, highlighted above.
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Cellularvision began its first big assault on Manhattan last month, when it introduced unlimited Internet access at a price of $49.95 a month, plus a one-time installation fee of $199.
Hovnanian recently recruited Bruce Judson, the former general manager of Time Inc.'s new media division, to market Cellularvision's service to people who are used to navigating the Internet via phone lines.
The wireless technology would allow subscribers to download material from the Internet at speeds of 500 kilobits a second -- roughly four times as fast as the service offered by phone companies like Nynex. The company's installation fee covers the cost of the receiver dish, a modem and a set-top converter box.
Time Warner, the dominant cable provider in New York City, has introduced a high-speed Internet service, called Roadrunner, in Elmira, N.Y. and several other cities. But a spokesman said the company would not bring Roadrunner to New York before next year.
"We believe there is a huge demand for Internet access," Judson said. "By early next year, we'll introduce an even faster service."
Cellularvision will focus its Internet marketing efforts in Manhattan, where it sees an affluent population starved for high-speed access. In Brooklyn and Queens, the company is pushing its package of television channels, including Home Box Office and the Cable News Network, as a low-cost alternative to cable television.
Such segmentation is easy to do because, unlike phone or cable companies, Cellularvision does not need to upgrade its entire physical plant -- wires or switches -- to offer two-way data services.
Hovnanian eventually hopes to provide telephone service on his network as well. Last month, the company signed an agreement with Nynex, under which Cellularvision will lease lines from Nynex and resell the service under its brand name. When it signs up enough customers, Cellularvision plans to shift them over to its wireless network.
"This market is ours to lose because we feel we have an inherent economic advantage in our delivery system," said Patrick J. Greaney, a former senior vice president of Philips Electronics North America, who joined Cellularvision last week as its chief operating officer.
Greaney is a true believer. At Philips, he oversaw the company's $5 million investment in Cellularvision. The company has also attracted small investments from Bell Atlantic and J.P. Morgan. In February 1996, Cellularvision made an initial public offering of its stock and raised $39.8 million.
Still, it has not yet won over Wall Street. The stock has slumped with the rest of the wireless industry because of fears of ruinous competition. On Thursday, it closed at $8.25, up 12.5 cents in NASDAQ trading -- well below its high of $16.75 in July 1996.
And Cellularvision needs to raise capital because it is investing $25 million to build its network of transmitters.
While specialists said that local multipoint technology does work, it is prone to the weaknesses that afflict other types of wireless service. For one, the signal can fade in heavy rain if the network is not properly designed. And while it does not have the crippling line-of-sight limitations of other technologies, such as wireless cable, it may not work too well in hilly areas.
Some of Hovnanian's competitors say that his wireless technology will ultimately hobble Cellularvision.
"What do they have?" said David C. McCourt, chief executive of the RCN Corp. "They have an inferior video product, no phone product and no way of migrating their traffic to a fiber network." RCN, a unit of the cable operator C-Tec, is building a fiber optic network to provide alternative cable and local phone service in Manhattan.
But other experts said it was not fair to lump Cellularvision with other, garden-variety wireless companies. After all, the company's technology was invented by Bernard B. Bossard, an electrical engineer who helped develop the guidance system for the Patriot missile. Bossard is still chief technical officer and a major shareholder.
Moreover, Cellularvision has an indisputable advantage over other wireless competitors. Because it pioneered local multipoint technology under a special federal program, it did not have to pay for its license, which covers 8.3 million people in New York City, Westchester, Rockland and Putnam counties.
Hovnanian says that his crusade will be vindicated this fall when the Federal Communications Commission auctions licenses across the country. Telephone and cable companies are expected to bid millions of dollars for licenses in markets far smaller than New York.
Given all these virtues, he cannot understand why investors are not lining up outside his door. He noted somewhat ruefully that Microsoft recently invested $1 billion in Comcast, a cable company run by Brian L. Roberts, his fraternity brother of his at the University of Pennsylvania in the late 1970s.
"I'm glad that Bill Gates found my fraternity brother," Hovnanian said, "but I think there's someone else in my fraternity he ought to be talking to." |
