By Joel Schofield, Executive Editor, Private & Wireless Broadband Magazine
Since 1997 when the wireless cable business started its fade to black in several major markets, and only to be acquired by mega powers Sprint and MCI/WorldCom, many have anxiously awaited the results of this markets pending evolution to wireless broadband.
To date however, rollouts have been slowed due to a degree of wide ranging issues. Business plans remain undefined. Residential and commercial MDUs look to this market, understanding its potentially enormous affect upon the telecom landscape, with no greater understanding than they had four years ago when the bottom was falling out of the wireless cable business.
While the MMDS market continues to progress and evolve with each passing month, let’s take a moment and examine “The Crucial Issues” facing the industry.
ISSUE ONE: Is
there an international movement trying to take MMDS spectrum away from license
holders in the US for Advanced Mobil Communications/Third Generation Wireless
Systems?
Low Down: There is currently a worldwide movement to establish a universal spectrum use for 3G services. One of the frequency bands suggested for this use is in the MMDS (and ITFS) frequency range. Currently, the Wireless Communications Association International (www.wcai.com) has been leading a worldwide effort to remove the MMDS/ITFS frequencies from consideration. The US government has supported this position, as have Canada and Mexico.
Our Take: It is not going to happen. There will be huffing and puffing from all corners of the globe, but the fact remains that the WCAI is comprised of some very smart and talented people who have a history of winning big fights. Also, at the end of the day, the two leading MMDS spectrum holders in the US remain Sprint and WorldCom, and they swing a big stick. We think the combination of the WCAI’s ability along with Sprint and WorldCom’s clout will prevail and the MMDS/ITFS spectrum, in the US, will stay right where it is.
Low Down: Wireless, whether it is MMDS or other frequencies, is the big “X-factor” in the telecom landscape. A well run, technically sound wireless broadband company can deliver connectivity to residential and commercial MDUs at a substantially better price than any other platform. The main reason many MDUs are still very limited in their choice of broadband access providers, is that they must either use the incumbent or have no broadband access at all. Wireless is the best opportunity to deliver competition to incumbents particularly outside of the major markets.
Our Take: Remember what those little satellite dishes did to the wireless cable business model a few years ago? We think fixed wireless broadband access has the same potential (note the emphasis on the word potential) to impact the MDU market as satellite did in the mid 1990s. The technology is progressing rapidly, and the regulatory landscape has become favorable. The only unknown left in the equation right now is execution. MDU owners can benefit greatly from MMDS (and other wireless platforms) bringing a viable option and creating competition in the market.
Low Down: Two areas have delayed aggressive launches of broadband service in MMDS frequencies. The first area was regulatory. The spectrum was originally licensed through the FCC for one-way service. Any wide scale deployment would require authorization for two-way service to make sense. It was not until this Summer that the filing window was opened to apply for two-way approval. The second delay was due to technology, or more specifically, the advancements in technology. One industry expert likened it to buying a computer, “Sprint and WorldCom have been faced with the constant scenario that if they wait six months, they can buy something that is better, faster and cheaper than what they are currently evaluating. The technical advances have been coming at an incredible pace.”
Our take: It is getting close to land grab time. DSL is coming along, fiber based companies such as RCN are rolling out aggressively, other wireless providers such as Teligent, Winstar and Nextlink are all progressing, franchised cable is rolling out more and more cable modems each passing month, and there has even been noise from the satellite industry as of late. Everyone wants the best technology bang for the money but nobody is going to risk being late to the dance. The longer the larger carriers can wait on technology then the better off they will be in the long run. With the possibility of real competition, we will see things start to pick-up.
Low Down: Nucentrix CEO Carroll McHenry stated in an interview with this magazine in July (volume 19, issue 7) that 2001 and 2002 would be “filled with and preoccupied with deployments.” Both Sprint and WorldCom are expected to be on a similar timetable.
Our Take: We agree with McHenry’s assessment, but we are predicting rollouts will begin in earnest more towards the later part of 2001. Equipment issues still remain and carriers are not happy with the CPE (Customer Premise Equipment) prices at this point in time. It all comes back to the “time to market” versus “technology bang” equation stated above. Across almost every platform, major operators have been watching the market and pacing themselves, trying to maximize the capacity, performance and value of the technology they deploy. However, we are getting pretty close to the point where someone is going to blink—then lookout.