Movin' on up
The broadband fixed wireless industry, much like its wireline brethren, fell victim to its own hype...and it hasn't been a pretty picture. The fixed wireless industry seemed to nosedive following the much-ballyhooed spectrum auctions that occurred in the mid- to late 1990s. Billions of dollars were spent to snatch up available spectrum with MMDS (Multichannel Multipoint Distribution Service–2.1 GHz to 2.7 GHz) licenses and LMDS (Local Multipoint Distribution Service–27.5 GHz to 29.5 GHz) licenses.
To add insult to injury, first-generation fixed wireless equipment failed to do the job, says Russell Wiseman, senior vice president– Internet operations for Nucentrix Broadband Networks (www.nucentrix.com), a fixed wireless service provider that serves nearly 100 small to medium-sized markets across Texas, Oklahoma and the Midwest.Fixed wireless' evolution
"The industry," says Wiseman, "has come through an evolution working with the only commercial systems that were available (at the time), learning the lessons, figuring out what worked and what didn't work, and what was required to make the business model all fit together.
Wiseman has a clear idea of what second-generation equipment should be. "Second-generation, for me," explains Wiseman, "is non-line-of-sight (NLOS).
"When I refer to 2G, I refer to the system that makes the complete leap to an NLOS system with a cheap and inexpensive CPE that the subscriber would implement themselves."Taking a cellular approach
The failure of the first-generation "single stick approach" that featured high-power, large external antennas that couldn't penetrate any kind of foliage or obstruction, meant the base station had to be brought closer to the CPE, says Wiseman. That means a cellular approach.
But, with a cellular approach, vendors are faced with what Wiseman calls the Rubic's Cube issues.
"I want to be able to have high-speed data, because if I don't, I don't have a product," says Wiseman. "But, in order to deliver that high speed, I don't want to reduce the cell radius so much that I have to raise more money than planned (to deploy more cells). I don't want to make the CPE so big and expensive that the subscriber can't install it, or that I, as the carrier, can't meet my cost-of-acquisition targets because the CPE is too expensive. Those three issues are the engineering challenges of all the vendors."
Faced with these challenges, the vendors are taking various approaches to solve "those dilemmas, those fundamental inconsistencies or conflicts in the business model," Wiseman says. They're applying techniques like OFDM and CDMA. They're debating modulation schemes like 64 QAM and QPSK, as well as discussing whether to pursue a mesh architecture or a large cell network design.
Various company representatives expelled a great deal of air on whether OFDM or CDMA was best. For Wiseman, it's an irrelevant debate because there's always going to be benefits and tradeoffs, no matter which access scheme is used.
He says that OFDM, while a relatively new approach, is very robust in the face of multipath and other interference. While CDMA is not as strong in that regard, it is a more established approach, with nearly 10 years of development behind it. As a result, this could translate into cheaper CPE using the more mature technology.
But Wiseman doesn't believe the OFDM/CDMA, 64 QAM/QPSK or the mesh/large cell debates will define who wins or loses in this space. Instead, the one constant that's having an impact on everyone in the industry, vendor and service provider alike, is time, he says.The clock's ticking
Wiseman explains: "It comes down to which vendor is able to mature their technology the fastest to allow us, as operators, to launch networks before the window of opportunity closes for us and them.
"If you believe that there is a window of opportunity for carriers like us (i.e., Nucentrix, Sprint, WorldCom); if you believe that the market opportunity will not be there forever, that DSL and cable modems will continue to make inroads as every day goes by, the window for a third alternative becomes smaller and smaller.
"So, we can't wait around forever. We have budgets. We have cash balances. We have investor impatience. All those market opportunities or lack thereof have to be addressed in getting to market."
How much time do the fixed wireless providers have?
Wiseman says that in 2002 we'll start to see some new generation equipment actually take form and make it to trial. 2003, he says, may be the crucial year for fixed wireless.
"That's when momentum needs to be built, or people are going to lose interest. Within that window of time, a good 15 months or more, a lot is expected."
Wiseman realizes his company's decision will not make or break any one vendor. But, he says Nucentric's decision will not be made in a vacuum, either. "Our strategy," says Wiseman, "is to make a decision partly due to our own assessment of our own needs, and partly based on what bigger carriers do.
"That's borne out of the fact that we're a big operator, but we're not a BIG operator. We're bigger than guys who have only one license in one market. But, we alone can't drive the volumes of a vendor to sustain them on our own. We need large volumes from a WorldCom, from a Sprint, or a Verizon to help drive healthy vendor industries.
"So, we're preparing, based on our own evaluations, to make a choice, and we're watching what the bigger vendors do so that we're not caught off guard and find ourselves with a technology that nobody else is deploying."
However, Wiseman believes, despite the Rubic's Cube challenges vendors face and the fast-approaching window of opportunity, there's hope.
"If you look at where the technologies are today," says Wiseman, "where they were six months ago, and where I expect them to be in six months' time, I'm pretty confident we're going to have a couple of potentially strong contenders to pick from."Wholesale fixed wireless?
By all accounts (literally and figuratively), Dean Johnson, president and CEO for First Avenue Networks (www.firstavenet.com), should be wary to the point of being frightened about the transition the fixed wireless industry is going through. That's because, in its previous life, before the bankruptcy, First Avenue was ART (Advanced Radio Telecom).
Despite the bankruptcy backdrop the industry has, Johnson says there's still a positive side to things. "That's the environment we find ourselves contrasted against," says Johnson. "But, here's the good news in all this. There's been no change to the business fundamentals.
"We see the demand and the opportunity is just as great as ever. There's really been no diminishment of that. We're getting second-generation technology now. It's technology that was targeted for the Winstars and the Teligents of the world that went into the labs two years ago and is finally coming out. I've seen the features to be on target and the costs are down."Mapping out the future
Given that, what's a formerly bankrupt company to do? Johnson has a clear path mapped out. "What we're trying to do," says Johnson, "is put our spectrum to work. We are going to sweat these assets, and that means we're going to focus on market opportunities instead of just building markets and links."
First Avenue, says Johnson, is "going to identify demand and serve it where we find it." What the company won't do, he says, is go after the retail market.
"While going after the retail customer may be a good proposition," says Johnson, "it's very expensive. There are only so many (telecom) companies in a retail market who can afford to go after the retail customer.
"So, what we choose to do is serve those companies that are already serving the retail customer. You can think of it as sort of a wholesale strategy. So, we are looking for large, diversified telecommunication providers that wish to avail themselves of the use of wireless frequencies. We'll even build facilities for them."
Johnson is also encouraged by the technological advancements in fixed wireless. "Gen 1 is ready to go," he says. "The problem is that it's got gen 1 performance and gen 1 cost. Gen 2, I'm very, very excited about. You look at some of the point-to-multipoint developments coming out, and the next generation of point-to-point equipment, that is really getting where you need it to be. That's the good news.
"Knowing that and if I had the right opportunity, I wouldn't hesitate to deploy a competent company's gen 2 equipment. That's because, more so than ever, they have to make that deployment work or they're out of business."
Johnson also believes fixed wireless success in the future is going to be based on strategic partnerships. "We believe that the future solution is going to have to be a collaborative effort," says Johnson, "and it's not going to be just one medium. For example, you need to pair up what we've got with a metro fiber provider. Nobody needs a backhaul provider because there's so much capacity in the Global Crossings of the world.
"We need to make sure that when we do roll out, we have to do it smartly, and we do it using other people's assets while they're using our assets. We may use their sales force while they may use our technical strengths. That's the thing. No one company can do it all."
(Editor's note: During the 2002 Broadband Wireless World Forum this past February, there was a lot of activity and announcements from both established and start-up vendor companies touting their next-generation products. After having gone through a very public bankruptcy bloodletting of some key providers, the industry's remaining service providers, while appropriately chastened by past events, were generally optimistic about the industry's chances for a rebound. CED contacted two such providers who, out of sheer self-interest, are closely following the technological events that are certainly reshaping their industry...and most likely their fortunes.)