While you're getting up to speed with WiFi, prepare to go faster with WiMax

Submitted by Norm Roulet on Mon, 11/29/2004 - 16:24.

As we all consider the
transformational impact of wifi on our daily lives and this community, there’s
another wireless technology to receive in your mindspace and soon to your business or even home – WiMax… worldwide interoperability
for microwave access… which has blazing speed with a stable range of 15-30 miles and is already prevalent in major cities around the
world, and should be considered part of NEO’s long-term technology portfolio strategy.
The questions are, how does WiMax help NEO and when? Read the NYTimes article posted and linked below – I’ll explore this further as
it relates to bridging our digital divide from the most out of box position

Internet Access, Delivered
From Above

By KEN BELSON – NYTimes - Published:
November 29, 2004

Jeff Thompson may be afraid
of heights, but he appears to be at home on the 81st-floor terrace of the
Empire State Building.

Overlooking the 1,000-foot
drop, Mr. Thompson said he saw the entire New York metropolitan area as the
battleground where his company, TowerStream, will challenge phone companies for
high-speed Internet business customers by delivering fast, cheap service
without digging up streets to install cables.

Next to him, a TowerStream
antenna, perched on the parapet, beamed high-powered wireless Internet
connections to companies several miles away. This kind of aerial system, many
technology experts say, could uncork the most nettlesome bottleneck in the
telecommunications industry: the phone companies' control of the "last
mile" of wire that travels from their switching stations to homes and

"We're competing
against the Bells," Mr. Thompson said, "so we have to work
quickly." Waving his arm toward the blaze of buildings and potential customers
below, he said with a laugh, "This is when I get excited by heights."

With 700 customers in five
cities, TowerStream is the most active player in an emerging industry that
sells a technology known as WiMax, or worldwide interoperability for microwave
access. Unlike WiFi, the radio wave technology in airports and cafes that
allows users to log on to the Internet from their laptop computers within 150
feet of an antenna, WiMax delivers broadband Internet connections through fixed
antennas that send and receive signals across entire cities.

Using the most powerful
equipment, a single antenna atop a tall building can provide high-speed data
transmission to users as far as 30 miles away, although the optimal range is
less than half of that. The radio signals and antennas are unaffected by bad
weather and provide an alternative to data cables that are sunk below sidewalks
and can accidentally be cut by construction crews.

The price is another
advantage of the system. TowerStream charges $500 a month for a 1.54-megabits-a-second
connection, about one-third to one-half less than the cost of service on
comparable T1 lines that phone companies sell to businesses for data
transmission. TowerStream can charge less because it does not have to rent
connections from Verizon or another former Bell company that runs local
switching stations.

Getting businesses to buy
WiMax is a challenge because the technology is new. But TowerStream, which was
formed in 2000 and, according to the company, has been profitable since June,
is finding that securing rooftop space on skyscrapers is a hurdle, too.

TowerStream spent more than
two years negotiating a lease with the Empire State Building. But from that
perch, and similar ones atop the MetLife Building and a phone company office in
downtown Manhattan, TowerStream can reach virtually every office in the city,
including those that are out of sight of the towers.

"The real estate is the
hard part of the business," said Mr. Thompson, who serves as chief
operating officer at TowerStream. "When you tell people you can reach
10,000 clients, they don't believe you. But everything I see could be a customer."

Mr. Thompson's optimism is
warranted, many analysts said. The business of delivering wireless high-speed
Internet service is worth about $400 million globally and could quadruple in
the next few years, according to the WiMax Forum, a group of WiMax providers
and equipment makers.

Businesses in urban centers
are the primary focus. But customers in rural areas where there are no
broadband connections to cable or phone companies are also targets. In those
places, antennas can be placed on radio or cellular towers. WiMax is also being
introduced in developing countries where Internet access through fiber or
copper cable is hard to come by.

WiMax and wireless broadband
connections may dent behemoths like Verizon Communications and SBC
Communications, but they are unlikely to put them out of business. Large
companies, particularly brokerage firms and banks, place the highest premium on
secure data lines with backup power. Small companies may use WiMax as their
primary data line, but for most companies WiMax will remain a dependable
alternative to, not a replacement for, fixed lines.

"There's a very good
market selling to small businesses," said Monica Paolini, president at
Senza Fili Consulting, a wireless service company in Seattle. "Businesses
don't have much choice in ordering data lines and they love the flexibility of

FreshDirect, an online
grocery store based in New York City, for example, ordered a wireless
connection from TowerStream in March. FreshDirect already leased superfast DS-3
lines to power its service center in Manhattan and its 300,000-square-foot
warehouse in Queens, just across the East River. Now an antenna the size of a
pizza box sits on top of the warehouse roof, facing the Empire State Building a
few miles west.

The company has been expanding
rapidly and needs backup Internet access to make sure its Web site and
inventory, billing and management systems keep humming in the event any of its
primary data lines fail. "In this business, it's not a matter of if, but
when, something will go wrong," said Myles Trachtenberg, FreshDirect's
chief technology officer.

Level 3 Communications
provides FreshDirect's primary data connection, and its backup line is from
Globix. But Verizon operates only one switching station near the company's
warehouse in Queens, and all Internet providers, including Level 3 and Globix,
must go through that location. So FreshDirect was still vulnerable if the
switching station had problems.

Mr. Trachtenberg heard about
TowerStream, which began service in New York in June 2003, through a friend,
then learned he could get a WiMax connection set up in less than a week.

By contrast, ordering a
fixed wire line can turn into a logistical nightmare, Mr. Trachtenberg said.
While phone companies say they typically install data lines within a few weeks,
it can take months if Internet service providers, phone companies and union
workers who handle the installation have to coordinate schedules.

The biggest problem for
FreshDirect in installing TowerStream's service, it turned out, was stringing a
quarter-mile cable from the rooftop antenna to the company's servers.

That cable plugs into
servers that provide access to computers in the offices and on the floor of the
plant that keeps FreshDirect's inventory, shipping and billing records up to
date. The TowerStream connection also helps power 30 WiFi "hot spots"
spread through the warehouse that provide additional Internet access.

TowerStream's connection has
worked without a hitch, Mr. Trachtenberg said. In time, he plans to use it for
Internet phone service as well.

Still, there are limits to
WiMax's expansion. Because it uses public airwaves rather than a licensed
spectrum, signals are vulnerable to interference if providers overload a
frequency in a market. (TowerStream says that it has acquired the right to
force latecomers who install antennas near theirs to move if interference is
created. The company also says that its connections are encrypted and not
vulnerable to eavesdroppers.) Mobile phone companies, which are investing billions
of dollars in third-generation cellular networks, may also increase the speeds
of their data connections to compete with WiMax.

WiMax technology is too
expensive for residential use. The antennas on a customer's premises cost about
$500 each, and phone companies and cable providers already sell cheap
high-speed Internet connections for as little as $20 a month.

For now, TowerStream and
other providers use proprietary equipment and can beam signals only to antennas
on rooftops. The WiMax Forum, which helps set industry standards, has endorsed
the technology to deliver broadband to fixed antennas, but there is still no
consensus on a standard for users to receive WiMax links on laptops and other
mobile devices.

The biggest player in the
push for this standard is Intel, which makes chips used for fixed wireless
equipment. When a mobile standard is approved, WiMax providers will be able to
give users the same Internet access while they are on the go as when they are
attached to a superfast data line, said Sean Maloney, Intel's executive vice
president in charge of its wireless business.

An approved standard for
mobile WiMax will allow Intel and equipment makers to raise production and cut
prices, which may fuel demand. Analysts, though, expect opposition to
deployment of a mobile version of WiMax, particularly from cellphone carriers
who are still pushing WiFi and their own third-generation networks.

In the meantime, TowerStream
continues its look for skyscrapers where it can plant antennas. This month, the
company added service in Los Angeles, and it plans to move into San Francisco
in the first quarter of 2005, to go with current service in New York, Boston,
Chicago and Providence, R.I. Mr. Thompson said TowerStream planned to be in 10
cities by 2006.

Matt Richtel contributed
reporting for this article.