Local Multipoint Distribution Service (LMDS) is designed to replace the last mile of wire in a communications network with a wireless local loop and provide higher speed data access than wireline carriers can offer. It generally costs less than wireline approaches to implement and maintain, and it promises data speeds of up to 45 Mbps in licensed spectrum at the 10 GHz, 26 GHz, 28 GHz and 38 GHz bands. Because of the high frequencies used, the distance that can be covered is short; but the trade-off is more available bandwidth in each band. Combine this with the fact that the data links are between fixed points, and you get higher data rates, too.

Netros AirStar wireless product family

Although the term LMDS generally is applied to the systems that will occupy spectrum auctioned by the FCC for this use, companies also offer these services in spectrum that was licensed before the auctions.

LMDS is also attractive to incumbent operators to complement or expand existing networks. It is easy to make a case for LMDS deployment in countries where little if any copper has been laid because carriers can perform a cost analysis to compare running copper wire or fiber cables vs. installing point-to-multipoint wireless communications systems. But because these systems operate only over short distances and the equipment required on both ends is expensive, a logical question is whether there is an economic model that makes sense for the deployment of LMDS where copper wires and fiber already exist.

LMDS license leadersWhereas there are two big service providers that hold licenses for Multi-point Multichannel Distribution Service (MMDS) spectrum, the number of companies that hold licenses in the LMDS spectrum are more numerous and, generally, smaller in size. Winstar, Teligent and XO Communica-tions are the biggest LMDS license holders in the U.S.

LMDS uses wireless cells that cover fairly small geographic areas, typically from two to five miles in radius. The transceiver that an LMDS customer sees has a fixed location and remains within a single cell. A common design puts the customers antennas on rooftops, to get a good line-of-sight to the cell transceiver. A downside to this method of transmission is rain fade, where raindrops distort the millimeter-wave signal.

Winstar, based in New York City and founded in 1993, has spectrum licenses in 60 U.S. markets and has deployed wireless broadband in more than 30 of them. The companys service offerings include videoconferencing, LAN interconnections, MPEG-2 video, Web hosting and, a commerce site.

The company forged a $2 billion long-term strategic relationship in 1998 with Lucent to build out Winstars fixed wireless broadband network. Lucent is providing technology, network design, integration and build-out services as well as communications hardware and software. Additionally, Lucent will provide equipment financing to fund the build-out of Winstars global end-to-end network.

Another provider, Teligent, is based in Vienna, Va. and has more than 34,000 customers in 43 markets across the country. The company started its fixed wireless broadband offering, called SmartWave, in 1998.


Teligents goal is to provide the same types of voice and data services that local exchange carriers provide, says Lou Olsen, Teligents VP technology. Therefore, it offers traditional switched-based local and long-distance phone service along with its fixed wireless option.

Fixed wireless companies like Teligent aim to capitalize against traditional incumbent telephone companies that rely on T-1 sales. A basic T-1 connection can run a company $1,500 to $1,700 per month. A comparable fixed wireless connection is roughly $1,100 per month, saving a company roughly $300 to $500 per month.

Teligent is deploying second-generation equipment to provide DS-3 and OC-3 type bandwidths and doesnt subscribe to a single network architecture approach. The company uses Asyn-chronous Transfer Mode (ATM) switches and data routers along with Nortel Networks DMS voice switches. Teligents other equipment vendors include Nortel, Hughes, DMC, Ericsson and Siemens.

LMDS, though new, is already a maturing industry and is starting to move up the experience curve, says Olsen. This drives the cost of the service down. Everybody took their best guess at what first-generation technology constituted, says Olsen. In my mind, thats kind of where MMDS is today. They really have nothing but a few lab systems out there.

To differentiate itself from other contenders, Teligent took innovative ap-proaches to service pricing and decided to be a facilities-based carrier, meaning it owns all the equipment it needs, says Olsen. I think if you compare us to the local exchange carrier (LEC), we probably offer a lot of similar services, but when you compare us to a lot of competitive local exchange carriers (CLECs), they tend to be very specialized, says Olsen.

XO Communications, located in Reston, Va., was founded in 1994 by Craig McCaw to provide broadband communications services to businesses over fiber optic facilities. The company currently provides these point-to-point and point-to-multipoint voice and data services in 53 markets across the U.S. and owns licenses covering 90 percent of the population in 30 U.S. markets.

In 2000, the merger of NEXTLINK Communications and Concentric Network Corp. formed XO. The company started out providing only voice service to small businesses in small markets. Recently, XO contracted with Level 3 Communications to complete a long-haul fiber network in 2002.

The technology-agnostic company also recently added point-to-consecutive-point fixed wireless architecture to its networking portfolio. Consecutive point network design is based on the ring architecture of Sonet fiber-based networks. When one section of the ring fails, traffic is rerouted automatically in the opposite direction. XOs move to this new architecture follows completion of successful field trials of a consecutive point network in Boston using equipment from Triton Network Systems. XO has signed a nonexclusive contract with Triton to provision consecutive point radio equipment transmitting at OC-3. The company also works with equipment vendors DMC and Nortel.

We see each technology as being important, says Scott Pace, XOs corporate communications manager.

The business trend in LMDS is that it is a technology that was hyped only because of the 1998 FCC license auction, and people had to seize the moment, says Pace. Now, more of the sophisticated deployment will take place, and it will be significantly rolled out, says Pace. Part of that is because of the maturity of the technology and vendor equipment.

Nortel Networks point-to-point wireless network.
LMDS vendors

As carriers and vendors climb the broadband wireless learning curve, important technological distinctions emerge. In LMDS and other millimeter-wave frequency realms, the ongoing technology discussion encompasses not only whether point-to-point or point-to-multipoint formats are most appropriate in given applications, but also whether frequency-division or time-division approaches make the most sense within those architectures.

Nortel, a system and network integrator that provides equipment to Teligent and XO, has two iterations of its point-to-multipoint product. One is focused on frequency division multiple access (FDMA), which is the more established technology and is used to separate multiple transmissions over a finite frequency bandwidth to each user to permit many simultaneous conversations. Different channels are allocated for neighboring cell sites, allowing for reuse of frequencies with a minimum of interference.

Nortels other iteration is based on time division multiple access (TDMA), which separates multiple conversation transmissions over a finite frequency allocation of through-the-air bandwidth. As with FDMA, TDMA is used to allocate a discrete amount of frequency bandwidth to each user, in order to permit simultaneous conversations. However, each caller is assigned a specific timeslot for transmission.


Both types of equipment can co-exist peacefully, depending upon what the customers requirements are, says Tom Kuehler, Nortels director of strategic marketing for broadband wireless access.

Nortel considers its equipment second-generation and is currently developing third-generation equipment it hopes to have available by next year. The original iteration of the companys equipment was based on FDMA technology, and then the company developed TDMA technology.

Being able to provide an end-to-end LMDS system is one thing that differentiates Nortel from its competitors in the market, says Kuehler. The companys competitors include Alcatel, which recently purchased Newbridge Networks, Netro Corp. and Ensemble Communications.

Weve been at this game with point-to-multipoint longer than anyone, argues Kuehler. With Teligent being first out there, there were a lot of lessons to be learned in opening up the new marketplace; we think weve learned them better than the guys who havent had that opportunity yet.

Netro, which is based in San Jose, Calif., went public last year and raised nearly $400 million in a secondary offering. Netros systems for LMDS frequency bands are deployed in 55 networks worldwide. The company is an LMDS hardware and software provider currently providing equipment for Winstar and XO.

Netro uses frequency division duplexing (FDD) technology the company developed three years ago. That technology was mandated when the LMDS licenses were first set up, says Jonathan Jaeger, Netros senior product marketing manager.

Netros AirStar product is one of the first commercially available broadband wireless access point-to-multipoint systems with bandwidth-on-demand in multiple licensed spectrums throughout the world, says Jaeger. It operates at 10, 26, 28, and 39 GHz.

In order for the LMDS or broadband point-to-multipoint market to establish itself as a market, the people doing it must stop talking about the technology and start talking about the business case, the customers and the services theyre offering, says Jaeger.

Ensembles Fiberless product group

Now its gotten to the point where (LMDS service providers) dont talk about which vendor theyre using or even about the technology theyre using, says Jaeger. They dont care what the technology is. The technology is only an issue if it helps solve a business issue. One of the reasons why things havent been rolling out in the U.S. market is because of the price points.

Netros equipment lists at $5,000 per subscriber, says Jaeger. Another problem the company faces is getting its equipment manufactured fast enough. I cant tell you how many times people call up and say, Im a license holder in Chattanooga, Tenn., and I want to put a system in place. We tell them we will give them Nortels phone number because theyre too small for us to even deal with at this point, says Jaeger.

Small companies have a maverick attitude, thinking that as soon as they get a license, they will be able to do something great with it, says Jaeger. But Netro has to tell these smaller license holders that it costs money to put the infrastructure in place, he says.

LMDS start-up

Ensemble Communications, based in San Diego, Calif., is a three-year-old private company that recently raised almost $100 million in financing. The company is also partnering with Lucent, Samsung and ADC Telecommunications. The companys Ensemble Fiberless system is in trials with Adelphia Business Solutions in Pennsylvania and New York.


Most of the market is about new carriers and new networks, and all the new networks are trying to build on the latest and greatest technologyand to do that, they have to have the heavy component of wireless, says Carlton ONeal, Ensembles VP of marketing. We make these radio systems that do this next-generation last mile, broadband last mile.

The companys LMDS system became commercially available in the first quarter of this year.

Breaking the bottleneck

Of the variety of technologies developed for high-speed wireless access, LMDS offers an ideal way to break through the local-access bottleneck. LMDS may be the key to bringing multimedia data to millions of customers worldwide. It supports voice connections, the Internet, videoconferencing, video streaming and other high-speed data applications. LMDS will be a versatile, cost-effective option for both providers and users of broadband services, with its rapid and inexpensive deployment being particularly attractive to providers.