Fixed Wireless Round Two

Posted: 2/2004

Fixed Wireless Round Two
Metro Wholesalers Step Back in the RF Ring

By Khali Henderson

Fixed wireless was once a darling of the tech boom. CLEC hopefuls Teligent Inc., Winstar Communications Inc. and Advanced Radio Telecom Corp. hitched their wagons to its rising star in hopes of shortcutting the trench-digging path of their rivals by deploying fiber over the air.

of the tech boom. CLEC hopefuls Teligent Inc., Winstar Communications Inc. and Advanced Radio Telecom Corp. hitched their wagons to its rising star in hopes of shortcutting the trench-digging path of their rivals by deploying fiber over the air.

The tech bust was a final blow to a business model plagued with problems, including high customer equipment costs, complex RF installations, difficulty securing building rights of way and point-to-multipoint technology that did not work as advertised. All three local multipoint distribution service (LMDS) operators filed bankruptcy in early 2001; Teligent emerged in early 2002 and Winstar was bought out of Chapter 11 by IDT Corp..

While in practice fixed wireless has been unpredictable, its appeal has never waned. Over the past three years, technology has improved and momentum has grown for fixed wireless services most notably in the license-exempt bands. While much of the recent fervor has been around LAN applications for fixed wireless (a.k.a. Wi-Fi), metro carriers are revisiting MAN applications for broadband wireless to fill in coverage and bandwidth gaps for enterprise customers. Seeing this opportunity, carrier�12;s carriers and experienced fixed wireless operators are beginning to roll out wholesale offers.

LMDS license holder XO Communications Inc., for example, has dusted off the licensed spectrum it purchased in 1998 as NextLink and as part of its acquisition of WNP. XO�12;s LMDS spectrum in the 27GHz- 32GHz range covers 95 percent of the population in the top 30 U.S. cities. In the early days of LMDS, XO watched as its would-be competitors struggled. Explains Mark Salter, the company�12;s vice president of broadband wireless: �13;Multipoint gear was key to the play and, by and large, it did not work. We fell back to point-to-point, which wasn�12;t scalable and more of a niche deployment and then stopped offering it.�14;

That changed in 2003, when XO started working with vendors Ensemble Communications Inc. and Hughes Network Systems Inc., Salter says. He notes the carrier has deployed Ensemble�12;s point-to-multipoint equipment and is testing Hughes. Today, XO has two hubs in San Diego and one in Irvine, Calif.

Ensemble Communications, Fiberless system addresses frequencies from 10GHz to more than 40GHz and consists of three principle elements: the Fiberless 16200 Hub Station and associated radio antenna units, the Fiberless 320 Terminal Multiplexer and associated radio units and the Fiberless Management System. The company�12;s patented Adaptix technology, which delivers real-time asymmetry, modulation and bandwidth on demand, forms the basis for the air interface portion of IEEE 802.16 standard adopted in December 2001. In addition, the Fiberless system�12;s use of 25MHz or 28 MHz channels allows carriers to achieve burst rates up to 120Mbps and to serve larger areas with higher speeds to accommodate the varying traffic demands of business users.

Hughes Network Systems offers AIReach, which operates in frequency bands between 3GHz and 42GHz in point-to-multipoint or point-to-point deployments. AIReach consists of a multisector radio hub, remote stations installed on customer premises and a network management system.

Aside from working technology, XO�12;s approach to the market opportunity is completely different from its failed predecessors, says Salter. For one, the company is taking a success-based approach to deployment instead of a �13;build it and they will come�14; strategy. �13;What the fixed wireless industry did before was build out hubs and end-user buildings before they got the revenue,�14; he says. �13;We are building hubs, then selling the customer [tenant] and then building out the building.�14;

XO also works with the tenant to secure roof rights from the landlord. Salter says, in most cases, they are able to secure them without having to pay a fee or share revenue with the property owner. Another critical departure from the old business model is that XO is competing not against copper-based TDM services but against larger data pipes from T1 to DS3. �13;Fixed wireless enables us to do what copper cannot,�14; says Salter. He explains it allows XO to offer 5mbps to 100mbps connections. T1s offer 1.5mbps with the next step, DS3 (28 T1s) at 44.7mbps.

XO is rolling out its fixed wireless services directly and through other carriers that would resell it to end users. A handful of smaller carriers have resold it, says Salter. Since XO�12;s wireless hubs are connected to fiber, traffic is easily exchanged at the carrier hotel. Margins, he says, are better than what you could get from the Bells. He figures that at an average wholesale cost of $300 per month for special access, a T1 costs $200 per megabit. In contrast, the wholesale price for XO�12;s 20mbps wireless connection is about $1,000 per month or $50 per megabit.

He adds the service can be up and running in less than 10 days. And, it�12;s possible for XO to pass on information it pulls directly from the customer premise �17; something that can�12;t be done with a T1.

The availability of unlicensed bands enables metro carriers to set up their own fixed wireless connections, but Salter says, �13;RF is a different engineering subject than most telcos want to deal with,�14; and that unless they are doing a lot of deployments, it is difficult to scale the operation. He says interference on license exempt spectrum prevents them from being carrier grade.

NextWeb Inc., which utilizes 5.8 GHz for its broadband wireless network, argues such claims are misconceptions. �13;The first issue is the system must be well-designed, with directional antennas and frequency channel selection: any fixed wireless system that is poorly designed, licensed or unlicensed, will be unreliable,�14; according to FAQs on the company�12;s Web site. �13;The second issue is most cases of interference in unlicensed bands have occurred at the densely populated lower ISM frequencies: 900MHz and 2.4 GHz, where there is less path attenuation and directional antennas are more difficult to deploy because they are much larger. NextWeb staff have not experienced any interference problems in the higher 5.8 GHz ISM or UNII bands.�14;

David Williams, vice president of marketing and business development for NextWeb, says NextWeb provides the SLAs that you would expect: 99.99 percent up time with 50ms latency and packet-loss guarantees that mimic top carriers �13;This is not a best efforts-type service,�14; he says.

NextWeb base stations are installed on highrise building rooftops and use wireless access units with sectorized directional antennas to provide the wireless access hub connection. Each unit typically allows a three-mile range, offering coverage over a 28-square-mile area. Up to 250 subscriber units can be deployed per sector, with user throughput of 25mbps, dynamically allocated among users, upstream or downstream. Total maximum capacity per base station is 155 Mbps (OC3). NextWeb wireless base stations are interconnected using either DS3 or OC3 connections back to one of two NextWeb Regional Data Centers where Next- Web maintains peering and transit with multiple global backbones. On the customer premise, a subscriber unit is placed on the roof or behind a window with line-of-sight to a base station within three miles. In addition to housing the antenna, the subscriber unit also contains the customer-end gateway router, so it is ready to be connected to the suscriber�12;s LAN or firewall.

Using this architecture, the NextWeb network spans more than 800 square miles with access to more than 60 cities and 30,000 business locations throughout the San Francisco Bay Area, Silicon Valley and Orange County. �13;As we continue to push north into Los Angeles, we will have coverage in all the key markets in the state of California,�14; says Williams, noting the broader footprint is what carriers want. The company began offering wholesale services in April 2003 after it joined the SkyWeb Alliance with fellow California broadband wireless Internet providers SkyPipeline Inc. and SkyRiver Communications Inc.

While each SkyWeb Alliance member operates in a distinct geographical region, each can sign new customers on any other portion of the network, essentially allowing each member to benefit from full ownership of the entire network. Connectivity ranges from 512Kbps fractional T1 speeds to 10Mbps (six times the speed of a full T1).

�13;That partnership has been successful, but it also has given us insight into the issues faced by larger carriers,�14; such as requiring larger coverage areas and streamlined provisioning tools, says Williams.

Like XO, NextWeb also is counting on its turnkey offer to entice landline carriers to add broadband wireless. �13;It�12;s difficult to do on their own,�14; says Williams, who notes there is a real opportunity for them to expand their service offerings. �13;A company that uses PacBell or SBC copper could use our wireless capability to bring new products to market not tied to the limitations of DSL,�14; he says, citing video conferencing or VoIP running over a 2mbps wireless connection at half the cost of a T1 and installed in a few days. Services scale up to 10mbps �17; for which there are no landline equivalents except DS3, �13;which you can do cost-effectively for individual customers,�14; Williams says. Wholesale margins are above 35 percent, he says.

NextWeb has built a Layer 3 network so it can cross-connect to wholesale carriers, quickly offloading the wireless traffic back to its customer�12;s own facilities. NextWeb also can provide core network services in its footprint as well.

Williams says NextWeb is positioning its wholesale offer as an extension for fiber and larger backbone links as well as a local access alternative. An ISP looking for new products to sell could use fixed wireless where bandwidth is not available to fill gaps or to deliver circuits to end users along with content or value-added applications.

Another reason carriers might look to broadband wireless is for diverse networks for their clients. In that scenario, NextWeb also offers professional services to assist with such deployments.

Carrier�12;s carrier OnFiber Communications Inc. also is helping its wholesale customers fill client-specific requirements with a fixed wireless solution. OnFiber uses license-exempt free-space optics and millimeter microwave technologies from Terabeam Corp. and fSONA Communications to complement fiber-optic networks it operates in 14 major metropolitan areas. Terabeam�12;s wireless fiber solutions use high frequency MMW (60GHz radio frequency) and FSO (invisible light beam) technologies operating at speeds of 100Mbps to 1.25Gbps. The SONAbeam series of FSO networking products uses an unlicensed, wireless technology operating at speeds up to 2.5Gbps and distances up to 5 kilometers.

�13;Traditionally OnFiber has focused on fiber optics,�14; says Boyd Chastant, senior product manager for OnFiber. �13;Increasingly, we are using freespace optics and millimeter microwave�14; to address deployments that are too complex or expensive.

Chastant says the greatest justification for using fixed wireless technologies is cost, such as running fiber across a highway or congested area. He adds it can be the only option in places where there is a moratorium on new builds.

The occasions to use the technology have been few so far, says Chastant, who adds the carrier always is looking but, like XO, is interested only in success-based deployments. He is optimistic for its application, however, and says the company has integrated the fixed wireless technology into its existing network monitoring infrastructure so that it can provide a seamless picture of network health to its wholesale customers.

�13;We did significant testing to make sure it offered the reliability and monitoring back to our NOC in Texas,�14; he says.

�13;Your network is only as good as the weakest link in the chain,�14; he adds.