Jan
Today's news on the Sprint and MCI interest in the wireless cable/tv companies like PCTV, etc. could result in (greatly) increased demand for CAMP's products. FYI, here's a little background on the wireless cable industry (mostly a summary of info from CAMP's webpage):
The birth of wireless cable was represented by MDS (Multipoint Distribution System). In 1974, realizing the commercial potential for a local broadband distribution service, the FCC upped its original bandwidth restriction of 3.5 MHz to 6.0 MHz, and introduced the MDS license for business data services.
In 1975, Marquee Television launched a commercial television service using this frequency band, distributing the HBO channel in Washington D.C. MDS service quickly evolved into a means of distributing pay television programming, first in apartments and hotels and later to individual residences.
However, with the onset of the cable TV boom, the future of MDS appeared doubtful. As traditional wired cable systems reached growing numbers of cities, subscribers who were paying $20-30 for one channel on MDS could now receive 12-24 channels with coaxial cable for the same price.
MDS licensees put together plans to target neighboring frequencies, ITFS and OFS, for acquisition. ITFS (Instructional Television Fixed Service) was a 31-channel spectrum band allocated in 1963 for local use by educational institutions and non-profit associations. OFS (Operational Fixed Services) were channels set aside for business data uses.
In 1979, the MDS industry made a petition for reallocation of part of the ITFS bandwidth for commercial television distribution. After a long delay, the FCC reallocated 8 of the 31 (6 MHz) channels in 1983. These comprised two blocks of four channels, interleaved so that adjacent systems would not have to deal with co-channel interference, and were termed MMDS (Multichannel Multipoint Distribution System). A lottery system was created for obtaining these licenses.
The first U.S. MMDS station went on the air in Bessemer, Michigan in 1984. The first international wireless cable system was built in Bermuda, also in 1984; it was a 4-channel system serving hotels with HBO and other premium programming.
Wireless operators, however, experienced problems obtaining programming. The monopolistic control of programming by the cable television industry restricted the wireless industry's access to the majority of popular programming available.
Programmers wouldn't sell to wireless operators for fear of repercussions from their largest customer, the cable industry, which wanted to squelch any developing competition. The Justice Department began investigating programmers who refused to deal with MMDS operators and reported their findings to a House Telecommunications Subcommittee hearing in 1987.
With continued pressure from lawmakers at both national and local levels, as well as lawsuits by individual operators, cable programming eventually became available to wireless operators. The wireless industry, however, was forced to accept onerous prices, terms, and conditions in their programming agreements.
Meanwhile, in November 1991, the FCC classified OFS service as part of MDS. This rule change allowed wireless operators to increase their number of channels of 6 to 13 (3 OFS, 2 MDS, and 8 MMDS). This, coupled with the ability to lease ITFS channels, makes up today's 33-channel MMDS spectrum for wireless cable operators.
The Cable Competition and Consumer Protection Act of 1992, along with subsequent FCC regulations in 1993, provided the industry with fair access to programming for the first time. The act also required satellite programming companies to sell channels to hardwire cable's competitors at the same rates, as well as prevented the cable MSOs from offering their subscribers selective discounts in areas where competition existed.
In June 1995 , the FCC declared its plans for a series of auctions of MMDS spectrum rights. After 181 rounds of bidding, the auctions ended March 1996, issuing 493 licenses for $216 million. (It is these licenses that Sprint and MCI are after.)
The Telecommunications Act of 1996 opened the local and long-distance telephone businesses and deregulated the broadcast and cable television markets. Several provisions were quite favorable to wireless cable, including: wireless cable operators were no longer considered telecommunications carriers and were therefore excluded from common carrier regulation, cross ownership of a wireless cable system by a cable operator was now permitted, zoning restrictions on wireless cable antennae were loosened, and wireless cable systems were exempted from being required to provide public access channels.
Growth in wireless cable has been the result of simple economics: cash flow and profitability. It is less expensive and more cost-efficient to install antennae and downconverters than it is to bury cable, maintain cable, and replace coax with fiber.
The investment in wireless is in subscriber equipment (which CAMP provides), not network, thus making the investment proportional to the number of subscribers; also these costs are only incurred when an installation is made and one has a paying customer. This holds true for urban as well as suburban and rural installations. Segueing from analog to digital in wireless cable is also easier, because the existing equipment can, for the most part, be used in a digital environment.
Today, MMDS has become a competitive force in multichannel TV industries throughout the world, with over 220 systems operating in the United States serving approximately 1.2 million subscribers and another 4.5 million subscribers receiving wireless cable in 90 countries. Multivision MVS Television SA operates the world's largest wireless cable television system with over 350,000 subscribers.
MMDS is no longer the "poor man's cable," which it was once referred. It is a leader in today's convergence of video, data, and voice; a single technology capable of providing digital television providing upwards of 200 channels, high speed 2-way wireless Internet access, local telephone service, and data networking.
CAMP is the premier supplier of reception equipment to the wireless cable industry. Since its founding in 1981, the company's core competency has been the design and manufacture of innovative high performance microwave downconverters.
CAMP designs and manufactures a broad line of amplifiers, downconverters, antennas, and integrated products for the reception of microwave signals used primarily in conjunction with broadband communications worldwide. The Company's Satellite business unit produces reception components for worldwide DBS/DTH transmissions as well as consumer and commercial grade products for both C and Ku band applications. The Wireless business unit provides reception solutions for the Wireless Cable (MMDS) industry and markets MultiCipher®, a proprietary broadband encryption technology for conditional access of multichannel television systems. The Voice & Data business unit produces two-way wireless solutions for innovative voice, video, telephony, interactive, and networking applications. Micro Pulse, a consolidated subsidiary with 50.5% ownership investment, designs and manufactures components for a broad range of antenna primarily for GPS and wireless applications.
In light of today's news, I suppose this all means that the potential demand for CAMP's products is great. We'll see.
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