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1.1 The Wireless Last Mile
In October 2002, at Owensboro, a small Kentucky city on the Ohio River, after a five-month pilot program, the local electricity and water provider, Owensboro Municipal Utilities (OMU), rolled out a high-speed broadband service to the city's 58 000 residents at US $25 a month, just $2 more than what many were paying for low-speed dial-up access. In a short six months since launching service, OMU Online has connected more than 700 customers with broadband access. Currently, it has a backlog of several hundred connections, and expects to have a total of 1,500 customers by the end of the year.
Two months earlier and 3000 km away, in Klamath Falls, Ore., a small start-up company, Always On Network Inc. (Chiloquin, Ore.), began serving up broadband to 30 test customers, converting them into paying customers a few months later.
What make these enterprises novel aren't the data rates, which aren't exceptional for broadband, at 250-1000 Kb/s. It's the way that the bits are delivered-wirelessly-at least for the critical last mile to the home.
Bypassing the copper wires that connect a phone company's central offices to its customers, these wireless Internet service providers can deliver broadband more cheaply than digital subscriber lines (DSLs) and can reach out to rural homes and others not currently served at all except by dial-up.
The two providers are destined to be midwives to the next generation of broadband: wireless metropolitan-area networks (MANs). Propelled in part by a new standard, IEEE 802.16, wireless MANs are expected to do for neighborhoods, villages, and cities what IEEE 802.11, the standard for wireless local-area networks, is doing for homes, coffee shops, airports, and offices.
The reason is that OMU and Always On represent opposing approaches to wireless MANs from two of the technology's top system vendors, Alvarion Ltd. (Tel Aviv, Israel, and Carlsbad, Calif.) and Soma Networks Inc. (San Francisco). Alvarion has embraced the 802.16 standard and is a founding member of the WiMax Forum (San Jose, Calif.), an industry consortium created to commercialize it and a corresponding standard from the European Telecommunications Standards Institute known as HIPERMAN. The institute is based in Sophia Antipolis, France.
Alvarion's existing wireless last-mile products, and those of the other WiMax members, are designed for wireless Internet service providers (WISPs), making the connection between homes and the Internet backbone that lets end users bypass their telephone companies. Soma, reluctant to abandon or change a five-year odyssey of its wireless MAN technology development, and believing it to be superior to anything its competitors have, is ready to stand apart from the standard and go it alone. Its system, while eminently usable by WISPs, is chock full of quality-of-service features that help it transport voice-over-Internet-protocol packets. That means it's especially well positioned to be adopted by the phone companies themselves.
Andrew B. King of Web Site Optimization LLC (Ann Arbor, Mich.) predicts that 50 percent of all Internet access will be broadband by July 2004, and that this will climb to two-thirds just a year later. But if the future of telecommunications lies in broadband services, that only spells more trouble for phone companies. They've staked their broadband futures on DSL, which provides data rates 10-20 times as fast as dial-up on the same old copper phone lines. Creating a wireless network is relatively simple. At its heart is a base station, which can be put on top of a building's roof, a cellular tower, or even a water tower. The base station is the bridge between the wired world of the Internet, on one end, and subscribers, with whom it is connected by radio waves, on the other. With each station generally serving a 10- to 15-km radius, base stations can be put up where-and only where-they're economically justified.
Dan Stanton, Always On's chief operating officer, says he needs $4.2 million to pay for a base station and enough home devices for the 6000 households it plans to sign up within a 500-km2 area centered on Klamath Falls. Stanton says that the return on that investment would be $2.5 million per year. Even if that figure, and the 6000 subscribers, were to prove unrealistic, it is clear that the costs of serving a rural area are quite a bit lower than they are for wired DSL
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