In recent months a number of companies specializing in the delivery of broadband to the MultiFamily industry have fallen on hard times. Bankruptcies, Chapter 11 filings and cutbacks have plagued many MDU providers. However, Reflex Communications, Inc. has posted strong quarterly and year-end numbers at a time when much of the market has taken a down turn in the MulitFamily broadband space.

On February 2, Reflex's President and CEO Dennis Muse sat down with Private & Wireless Broadband Magazine's Executive Editor, Joel Schofield, to discuss his company and share his thoughts on the current state and future of the industry.

JS: Based upon a number of recent high profile Chapter 11 filings, it seems like a lot of the momentum has gone out of the MultiFamily service provider market. What does it feel like to be one of the few left standing?

DM: Well, it actually feels very good because those that keep their wits about them in times like this, that have outstanding sources of financing, as well as dedication of management to go make it work, stand a chance to own the space - so it feels very, very good to be in a position to continue executing a plan and to demonstrate to our real estate partners that we're going to be here and we're going to help them turn this into a true amenity for their buildings.

JS: What's your take on the last sixty, ninety days? Darwin's filed Chapter 11, North American Internet, same thing. BroadbandNow has cut back.

DM: We've spent a tremendous amount of time looking at the industry as a whole as well as dissecting what others have done and how that's different from what we're doing. I think the biggest difference is that virtually everyone who is retrenching, going out of business or filing for Chapter 11 were attempting, as young companies, to execute against three, four, or five different strategies. Therefore, they were pouring capital into three, four or five different business plans and didn't have the appropriate controls on any of them.

In fact, what amazes me most is that many companies that were attempting to execute in the multifamily space did not have infrastructure or communications experience, and that's exactly what we've built our company from. We have a clear focus on a single market, the multi-family space, and by hiring industry experts that have constructed networks and have operated and scaled networks over the course of quite a number of years, puts us in a position to not only understand what the business takes, but also to effectively execute network build-outs, and be successful.

JS: You mentioned your single focus. Is that single focus high-speed data to the multi-family industry in a geographic area, or is that nationwide? I know a number of companies are trying to get geographically focused.

DM: By single focus, I mean that we're singularly focused on the multi-family space and singularly focused on apartments and condominiums. We are building a new network to those apartments and condominiums. The initial service we are delivering in the new network is broadband Internet access, but as a result of the type of platform that we are building, which is fixed-wireless to the building, gives us scalability of bandwidth- ATM switches and aggregation and distribution devices within the building that drives up to 2.3 megabits symmetrical signal to the end user that will afford us to be able to push more and more types of applications to them over time. So we're building new networks purely to the multi-family space but with a national focus. Today, we are operational in Seattle, Portland, San Jose, San Francisco, Oakland, Sacramento, Los Angeles, Orange County, San Diego, Phoenix, Tucson, Denver, Chicago, Dallas, Houston, Atlanta, Miami and Washington, D.C. with expectations that over time we will continue to roll out into the major markets where density exists.

JS: By wireless to the building, are you're using the license-free spectrum?

DM: Actually, we have both facilities. We have procured on a wholesale basis in the license space 38 GHz-which is interesting because I can drive a fair amount of bandwidth at fairly reasonable costs. However, I'm even more impressed and intrigued and driving hard at deploying unlicensed fixed-wireless-principally in the 5.6 and 5.7 GHz range. The reason for that is that I can deploy capital and then own the asset as opposed to wholesaling the asset.

JS: When you get to the building, have you looked at the on-premise-wireless solutions?

DM: We have certainly looked at wireless to the desktop. We've also gone and spent a fair amount of time with portfolios and individual buildings where wireless-to-the-desktop has been deployed. Both our initial reaction from a scalability perspective and cost perspective is that this particular service is not ready for prime time yet.

More importantly, the feedback that we receive from those that have had wireless-to-the-desktop deployed on their properties is that they have been less than satisfied with the coverage and the throughput. Also, by talking to those who have implemented wireless-to-the-desktop we find that our expectations as to its price performance, which we felt was fairly pricey, have borne out that it is significantly more expensive when you factor in the amount of human resource you must devote to getting the system running and tweaked so that you can get ninety or ninety-five-percent coverage.

Our view is a simple one. When we go to a property, we are going to execute against 100% of the units on that property, not ninety or ninety-five, which is what most of the wireless-to-the-desktop solutions accomplish from a footprint perspective. We believe in the technology. We believe that a time will come when the price performance as well as the overall throughput will be there to make it a cost-justifiable expenditure, but for now I have not seen anyone make it work on a cost-justifiable basis.

JS: Who are your technology partners in all of this?

DM: We do quite a bit of business with Tut Systems, using their aggregation and distribution devices within buildings. We also use Alcatel on the ATM side. We use Cisco routers and have a whole host of wireless sources we are using, as well as others we are conducting trials with right now. These include Cisco, Adaptive Broadband, WiLAN and Western Multiplex products to name a few.

JS: Searching for best of breed?

DM: We are not only searching-we are doing a lot of trials. We are doing a lot of lab work because if you look at what's happening in the wireless world today, there are a tremendous amount of manufacturers that have point-to-point and point-to-multipoint radios available. There's a tremendous amount of them that are building radios in both the ISM and the UNII bands. As a result of there being quite a number of vendors out there, we're trying to find the right solution for several different types of applications because we build hubs that will drive bandwidth out to the residential communities. We also have POPs within markets where we're aggregating traffic at the hub and then backhauling it to our POPs. So it could very well be that we'll put a ten or twelve megabit radio into a building and then from a hub, put in a forty-five or a hundred-megabit radio to backhaul it into our POPs. So everyone has their own niche. There are certain opportunities for us to continue to use a multitude of different vendors for the different pieces as they make sense within our network.

JS: Looking at this industry now, where do you see it developing as far as technologies-broadband in particular-delivered to the multi-family, multi-dwelling unit, or whichever acronym anyone chooses? If you look down the road one, three, five years, what do you see in front of you?

DM: We see an opportunity to build a new network that's scaleable. The reason that is of critical importance to us is that today we have four percent of our customers adopting our one-megabit symmetrical service. In addition to that, we're doing trials with video-on-demand in Seattle and Portland in concert with Enron Communications and Blockbuster Video. In those trials, we're driving 2.3 megabit symmetrical services for video-on-demand to about 175-180 trial customers. What I'm leading to is that if I already have four percent of my subscribers at one-megabit symmetrical and I am driving another trial with 2.3 megabit symmetrical for purposes of delivering video-on-demand, we clearly see that there is a parallel with what happened in the business world over the course of the last few years-the continual adoption of higher and higher bandwidth inspired by new bandwidth hungry applications. So we believe that in the not-too-distant future, we'll be driving up to ten megabits symmetrical to subscribers in the multi-family space.

That's kind of a roundabout way of saying that our view is that you need to build a scaleable network platform that affords you the opportunity to continue to gear-up the bandwidth that is available on an average basis to your subscribers. When applications like video-on-demand, interactive gaming or voiceover IP demand more of the bandwidth you can give residents that bandwidth as those applications are developed.

JS: What do you see as kind of a landmine right now that would derail you in reaching the vision you just described? What is in front of this industry now that you would say are the burning issues to move forward?

DM: I think that there are probably two. Number one is the defining and focusing on a select market. We must stay focused and continue to convince the owners of real estate that there is a strong need for broadband services to the residents. The second is the capital markets. As everyone knows, the roller coaster that we have been riding for the last year has been very deflating from the standpoint of the venture community, and the amount of dollars that are available for businesses to execute plans. The interesting thing is that there is no discrimination against good plan versus bad plan. It's just harder for everyone at this point. So access to capital and access to lease financing are very big issues.

JS: Is executing upon your business plan more difficult in this current climate?

DM: The good news for us is that we are continuing to execute very well in a down market. We have risen to the top from the point of view of the real estate community, as well as the manufacturers of the equipment that we use to build our network. This means that we are continuing to receive more opportunities to expand our footprint. We're getting more opportunities to lease finance equipment and that translates into more interest from the venture community to pump new equity dollars into our business and allow us to execute our plan.

For us, this is really about execution at this point. We have a model that works. We are driving penetration levels that are unequaled in the industry. And because of that, we feel quite confident that we have an outstanding opportunity to succeed.