GREAT article from the NY Times, published last July in anticipation of LMDS auction in the Fall, which was of course delayed until 2 weeks ago. Wish the Times would reprint this piece...
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.
"Our 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.
Cellularvision began its first big assault on Manhattan last month (June '97), when it introduced unlimited Internet access at a price of $49.95 a month, plus a one-time installation fee of $199.
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. (3/1/98 note - speeds up to 48 megabits per second now offered.) The company's installation fee covers the cost of the receiver dish, a modem and a set-top converter box.
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 (June '97), 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.
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.
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.
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, a 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." |
