Cutting the Tie that Binds

TeleCrossing.net is launching a hybrid satellite/fixed wireless solution that bypasses all wireline connections and should sell to consumers for about the same as basic DSL. The company is looking for ISP partners.

by Gerry Blackwell [October 20, 2000]

One of the nice advantages of using fixed wireless for broadband access if you're an ISP is that it gets you away from reselling DSL services from the local exchange carrier (LEC), who also just happens to be your competitor.

Trouble is, you likely still have to deal with the LEC or some other giant wireline telecom entity, also a competitor, to get a connection to the Internet backbone.

But now there's a company that promises to cut ISPs free forever from the wireline carriers and all their hassles and competitive conflicts.

Greenwhich CT-based TeleCrossing.net, a reincarnation of Alphastar International, the defunct DTH (direct-to-home) satellite broadcaster, is using a hybrid satellite and fixed wireless system to deliver end-to-end, wire-free high-speed Internet service.

Founder and president Mahmoud Wahba claims the company's hybrid system provides the bandwidth of fiber and will be more reliable and accessible than DSL or cable. It can also make use of multicasting technology to enable high-quality streaming media services.

Undividing the disenfranchised
TeleCrossing is targeting "Internet and intranet users who are unserved, underserved, dissatisfied with cable and DSL or among the disenfranchised who fall in the digital divide."

Unlike some other satellite-based Internet services, this one is two-way, though asymmetrical—that is, there's more bandwidth coming down to the customer site than going back up to the Net.

The first satellite-based services required—still require—subscribers to use a phone line for the uplink.

Service range
The entry-level service from TeleCrossing is 384 Kbps down, 128 Kbps up, priced at about $40 in most places—it will vary from market to market.

The company also provides T1 connections to business at competitive rates—Wahba mentions a range of $300 to $700. We're betting that won't be competitive for long.

And it can provide very high-speed connections—up to 155 Mbps if the demand is there—using single-channel point-to-point satellite links.

Seeking partners
TeleCrossing is looking for ISP partners to help it distribute the service across the country, although Wahba admits that some details of how it will work with service providers have yet to be worked out.

"We have contacted a lot of ISPs," he says. "We wanted to understand the market first. We were ready to talk, but we have not deployed [the service through an ISP] yet."

The first ISP partners could be operational within a month, though, he says. Some negotiations are down to "legalese."

The company has been operating experimental systems from seven POPs in the northeast—in Connecticut, New York City, New York state, and New Jersey—with about 350 customers up and running. Technical strategy
It's currently using half a transponder on GE-5, a General Electric-owned satellite that covers North America. In terms of data throughput, this provides about 15 Mb.

TeleCrossing also experimented successfully with other satellite services, including birds that give it global reach. And it can buy more satellite capacity with a phone call, Wahba says.

"That's really the beauty of our system in comparison to others who want to be in this business—I won't name any names. They put satellites in the sky and hope they sell the customers. For us, demand comes first. As we pick up the customers we go and get the bandwidth."

TeleCrossing uses satellite base stations in each market and then distributes bandwidth to end customers using frequency-hopping spread spectrum wireless technology operating in the unlicensed 2.4GHz band.

The company has experimented with a number of radio equipment vendors including Nokia and WaveLAN. Cisco is also a major supplier of wireless equipment.

Growth projections
TeleCrossing expects to deploy 200 fixed wireless distribution points by August 2001, 800 by the end of 2002. It's not clear how many satellite base stations this involves, and the company is guarded about where it will deploy first.

Financing so far is all internal—"call it family money," Wahba says. The company recently finalized a new business plan, however, and is now actively talking to outside investors. He will consider going public if the market remains favorable, Wahba says.

Exploring partnership arrangements
How might TeleCrossing work with an ISP? First, the company will supply all the radio and satellite network infrastructure itself. It is considering a number of possible business models.

Most will involve the ISP buying or leasing gateway equipment worth between $10,000 and $15,000—although Wahba notes that if an ISP can deliver a large enough guaranteed customer base, his company will consider covering these costs as well.

And it will consider models that involve the ISP collecting revenues directly from the customer and paying a fee based on bandwidth used, or TeleCrossing billing the customer and sharing revenues with the ISP.

As always in these columns, we're not advocating TeleCrossing over other wireless alternatives for ISPs. Indeed, the company's legacy of failure in the DTH market is no great recommendation.

But the end-to-end wireless concept is at least intriguing and it sounds like TeleCrossing is nothing if not flexible in its approach to dealing with ISPs. We figure it's at least worth a look-see.

—End