Fixed Wireless Broadband Competition In Your Backyard

Even though your WISP might not face much competition at the moment, it pays to keep an eye on two players that could stomp on your fixed wireless footprint—fast. Learn how WorldCom and Sprint see the world of fixed wireless broadband access in the U.S.

by Patricia Fusco ISP-Planet Managing Editor [June 29, 2001]

WorldCom debuted its fixed wireless broadband service in familiar territory last year. Under the shadow of its main office, WorldCom began rolling out its fixed wireless broadband solution in the fourth quarter of 2000, starting with Memphis last November.

Multi-channel Multipoint Delivery System (MMDS) technology fuels WorldCom's fixed wireless offering over licensed 2.1 GHz and 2.5 through 2.7 GHz spectrum bands. It can reach a 35-mile radius of users from a single tower-mounted "super cell." Line-of-sight (LOS) issues vary from market-to-market and tower-to-tower. On average, WorldCom's wireless broadband offering reaches about 70 percent of the homes and businesses in any single-cell service area.

Fixed wireless broadband access is only one part of the global carrier's high-speed product mix, which include mobile broadband access, DSL service, and fiber optic solutions. Nearly seven months after its Memphis debut, WorldCom is successfully providing fixed wireless broadband access in to users in four other U.S. markets. In addition to Memphis, the service is available in Baton Rouge, La. and Jackson, Miss.; this week WorldCom connected customers in Bakersfield, Calif. and Chattanooga, Tenn.

Joe Brooks, WorldCom Broadband Solutions vice president of sales and market development, said the company plans to land in ten to 13 U.S. markets before the year is through. Because of the wide coverage area MMDS provides, Brooks contends that WorldCom has found a solid broadband market niche for its fixed wireless services.

"MMDS can be deployed efficiently for about $2,000 per square mile," Brooks said. "Fiber optics average about $50,000 per square mile and LMDS runs about $20,000. DSL costs about $12,000 per square mile and cable systems average $8,000 per square mile."

"Based on our business model for fixed wireless access we can get a return on investment (ROI) in less than two years," Brooks said. "But we need to trim customer premise equipment (CPE) costs for consumers down to $400 or less and move toward implementing second generation (2G) gear that is not LOS-dependent and doesn't require a truck roll. That's when thing get really interesting."

Current CPE costs vary with the location of the site being connected to WorldCom's MMDS broadband offering. Basic CPE includes an externally mounted antenna and a small wireless modem for a single computer connection. But Books is confident that fixed wireless CPE and installation costs will trend like satellite TV systems.

"When DirectTV first came to market it cost consumers $800 for the dish and $300 to install it," Brooks said. "Today the dish runs about $50 and installation is free. The same thing will happen when 2G-equipment is widely available for MMDS connections. CPE prices will come down and demand will go through the roof."

MMDS is also known as wireless cable or fixed broadband, in addition to its fixed wireless moniker. MMDS technology can be used to solve bandwidth shortage problems in metro market or to extend the reach of wireline service areas beyond its footprint. WorldCom's offering typically achieves downstream transmission rates pf 1 Mbps, but is scalable to 10 Mbps for. Average upstream speeds run around 512 Kbps. Pricing is comparable to DSL and cable modem broadband service offerings, less CPE and setup outlays.

Broadly speaking, broadly jumping
Right around the same time WorldCom was investigating wireless broadband delivery systems, circa August 1999, Sprint created a new organization tasked with building its wireless broadband offering. At the time, Sprint said it would deliver high-speed Internet access nationwide over the fixed wireless network that it was creating—and so the phrase 3G was coined.

Two years later, Sprint is still designing its nationwide fixed wireless network and the Sprint Broadband Direct program is only available in Phoenix and Tuscon, Ariz., San Jose, Fresno and San Francisco, Calif., Salt Lake City, Denver and Colorado Springs, Colo., Wichita, Kan., Oklahoma City, Houston, Tex., Melbourne, Fla., Chicago and Detroit.

So what's holding Sprint back from deploying its fixed wireless broadband program nationwide? Why has it taken Sprint three years to accomplish what WorldCom will in a year? Sprint has access to all the licensed spectrum it needs to build a viable business plan for Sprint Broadband Direct today. Its back office functions work fine with Sprint's flat rate billing program for fixed wireless services. Although customer service issues have been cited as a major barrier for Sprint, most of the so-called quality of service (QoS) issues have been readily resolved.

There are two issues delaying Sprint's 3G rollout—the first issue Sprint must resolve is whether its spectrum will remain under Sprint's licensing domain or placed on the auction block by the Federal Communications Commission.

Todd A Rowley, Sprint Broadband Wireless Group vice president of spectrum management and business development, said Sprint has all the access to U.S. airwaves it needs to bring the reality of 3G broadband access to the nation—as long as the FCC leaves its spectrum leases and licenses alone—and its 3G opponents run out of rhetoric.

"We're faring well against 3G opposition so far. Larger competitors with armies of lobbyists for the cellular phone industry—like Verizon—have us outnumbered and outspent," Rowley said. "But the fundamental benefits of providing wireless broadband services via MMDS technology using licensed spectrum in the 2.5 though 2.7 GHz band remains clear."

"If the FCC were to reallocate spectrum out of this band, educators would lose Sprint as their partner," Rowley continued. "Policymakers need to look at what's best for the country and take our band off the potential auction block. The reality of the situation is that the White House needs to understand that MMDS is in lock-step with the educational community and the ITFS."

Go to page 2: Competition In Your Backyard—continued >