Copyright 2004 Toronto Star Newspapers, Ltd.

The Toronto Star

March 11, 2004 Thursday Ontario Edition

AOL Canada is testing out a new high-speed wireless service in select areas of Toronto that could evolve to become part of its national broadband strategy.

At the heart of the service is a joint venture between communications provider Allstream Inc. of Toronto, U.S. investment firm NR Communications LCC, and Inukshuk Internet Inc., a unit of Montreal-based Microcell Telecommunications Inc.

The three companies joined forces in November to create a fixed-wireless broadband service that can compete directly with high-speed Internet offerings from the cable and telephone companies.

Last week, they officially launched in Richmond, B.C., and will launch this weekend in Cumberland, near Ottawa. This follows two earlier deployments in Yellowknife and Iqaluit.

The wireless trial announced yesterday for midtown Toronto is the first for AOL Canada, which already resells high-speed DSL service in certain Canadian markets.

Andrew Zimakas, general manager of emerging markets for AOL Canada, said the technology could become a permanent option for AOL customers.

"It would be premature for us to say this is the solution, but we're encouraged, we're going to trial it, and hopefully we'll achieve mutually beneficial commercial terms, making it viable and giving Canadians another choice," he said. If the trial is successful, "that could translate into a broader deployment by year's end."

NextNet Wireless Inc. of Minneapolis, Minn., is the technology provider. Customers literally plug in a NextNet device — roughly the size of a paperback book — and their computers connect to a wireless tower a few kilometers away, providing a high-speed link easily rivaling DSL and cable services.

But unlike DSL and cable service, the wireless service is portable. Customers can take the NextNet device to a different location and it will find the nearest available wireless tower.

Ron Mackenzie, senior vice president of strategy and corporate development at Allstream, said the joint venture plans to wholesale the service to AOL and any other service providers that want a simple way of offering high-speed service.

"It can be up and running in a matter of months," said Mackenzie, explaining that Microcell is providing access to its existing cell towers, Allstream is connecting these towers to its national infrastructure, and NR is providing fixed-wireless expertise under the guidance of wireless veteran Nick Kauser.

Kauser also is a director with NextNet, and wireless pioneer Craig McCaw is an investor. McCaw recently announced plans to purchase up to 17 percent of Microcell.

Brian Sharwood, a telecom analyst with the Seaboard Group, said Kauser and McCaw provide credibility, while having AOL as a partner will attract interest from other service providers. "They give it legitimacy, because if you've got AOL, it better not suck," Sharwood said.