Getting It Right The Second Time - Page 2

By Gerry Blackwell

October 08, 2004

The company's pitch to prospective customers is similar to the one LMDS pioneers brought to market. The basic value proposition—$500 T-1, 99.99 percent reliability—is good, but the real differentiator is speed of provisioning, and the fact that TowerStream, with its all-wireless architecture, completely bypasses the telephone company.

"Every IT guy I know has been burned by their [telephone company], just because it has too many customers and it takes too long for it to deliver [high-speed data] service," Thompson says. Internet access, he adds, is a more critical service today than it was when WinStar entered the market. "If you have to wait two or three weeks for service now, you're just as much out of business as if the power was off."

TowerStream advertises that it can provision within 48 hours, but in fact can do it even faster—in one case within three hours.

At the recent Democratic National Convention, the consortium of government and private agencies responsible for security at the event discovered at the last minute that it would not have enough wired access in time for the start of the proceedings. It contacted TowerStream on a Saturday at 6 p.m. and the company delivered wireless connectivity by six the next morning.

It can do this because it has already established ubiquitous coverage across entire cities and in some cases beyond into suburbs. That ubiquity of coverage is partly thanks to the sometimes disputed non-line of sight (NLOS) characteristics of the 802.16-like Aperto and Alvarion technology the company is using. Line of sight links offer optimal throughput, but throughput is still impressive in NLOS mode.

"I was riding around the city recently, doing a lot of non-line of sight shots and getting six megabits upstream, nine megabits on the downstream," Thompson says. "Everybody kept telling us that non-line of sight didn't really work, but if you're within a mile of one of our base stations, it's going to work, and it will probably work out to two miles. Two miles from the Empire State building you're out in the water. And the technology is only getting to get better and better."

The ubiquity of coverage is also a result of TowerStream's success in securing "beachfront properties," as Thompson puts it, by acquiring rights to use prominent high buildings to place its antennas and radios—properties such as the Empire State and MetLife buildings in New York and the Aon Center in Chicago.

"We're building a network in the sky that is all wireless," he says. "It's a wireless ring above the city that is completely separate from the telcos. It's crucial for us to have the best locations."

It's crucial because it means TowerStream can achieve ubiquity of coverage with the minimum number of wireless points of presense (POPs)—it has nine altogether across the three current markets. It's also crucial because it gives the company a head start on other WiMAX service providers that are sure to enter the market in the months ahead—and other wireless carriers, including reviving LMDS providers.

In the early days, in the aftermath of the WinStar and Teligent implosions, there was some resistance to the idea of relying on a wireless provider, Thompson admits. Now that the company has hundreds of customers, including some very big enterprises that are willing to recommend it, that resistance is evaporating, he claims.

TowerStream is a member of the WiMAX Forum and to some extent trades on that fact, but Thompson is quite clear that the equipment the company is using now is not WiMAX. The first WiMAX Forum-approved products probably won't be available until second quarter 2005. TowerStream will switch to WiMAX equipment when it becomes available, but has no intention of upgrading its current infrastructure in the short term.

"Right now, we have gear that works really well," Thompson notes. "It's reliable and we've been using it for years. [The introduction of] WiMAX is just going to bring the cost of customer premises equipment [CPE] down through economies of scale—and it will also add some new technologies."

The CPE TowerStream is using now has recently come down from the $500 to $600 level to the $200 to $300 level, which brings it into the realm of high-end SOHO customers, but WiMAX gear will have to get orders of magnitude cheaper yet if it's to be a viable technology for delivering residential service, Thompson says.

Until then, the TowerStream party line is that WiMAX (or the pre-802.16 5GHz gear it's using now) and Wi-Fi are complementary technologies.

"WiMAX is a great way to get the last mile to the Internet," he says. "It's definitely a better way to do backhaul for Wi-Fi hotspots, for example. And Wi-Fi is a great technology for the wireless LAN. There's no reason to change anything there. Those two together are a killer combination."

Unless, of course, laptop, PDA and smart phone manufacturers start building WiMAX into their products the way they are incorporating Wi-Fi now, which is a possibility. Then TowerStream and other WiMAX service providers might be in the business of offering residential and even mobile service, which could break up the winning team.

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