Unwiring the Horse Capital

By Adam Stone

September 10, 2004

Lexington, Kentucky is home to a WISP that wants to provide wireless not just for mobile users, but also to every desktop computer in town.

WiFi: It's not just for mobility anymore.

So says Chuck Williams, technical consultant and part-owner of Lexington Wi-Fi, a company working to deploy wireless broadband service across a broad swath of the Kentucky city that bills itself as the Horse Capital of the World. So far the project has spread Wi-Fi over two and a half square miles, and had drawn some two dozen subscribers in the first two weeks since its mid-summer launch.

But something is different here. While Williams and his colleagues are happy to serve laptop-toting business travelers and other typical Wi-Fi consumers, they have something bigger in mind. It is not coincidental that their initial deployment covers not only shops and restaurants but also two upscale residential neighborhoods and a 500-unit apartment complex.

"We are not going after the transient users. We are going after people who use their desktops at home," Williams said. "If you still have dial-up, for pennies more a day I can give you broadband, and it will cost less than DSL, since I don't need crews to run lines to everybody's houses."

The analysts express cautious optimism about this business plan. "It's a model people have been talking about doing for a while, and we think that with some of these new technologies, that can become a reality," said Ben Bajarin, an analyst at Creative Strategies in Campbell, Calif.

In a world that relies increasingly on broadband connectivity, he suggested, there may well be a place for any player who can deliver discount pricing, whether via wired or wireless means.

"And with wireless you definitely can bring costs down -- just because of how cheap it can be to set up a hub," he said.

Technology is a key factor in this venture. Most people still assume that Wi-Fi is limited to its traditional reach of about 300 feet indoors or 1,200 feet outdoors. In order to cover a far greater area, Williams relies on sophisticated hardware from Vivato: "Smart" devices that boost power, concentrate signal and bring to the table advanced algorithms in order to disseminate broadband over a far greater area.

While the Lexington effort is using Vivato's planar phased-array base equipment, such smart antennas are not the only way to distribute Wi-Fi over a broad area. Numerous companies are developing so-called "mesh" solutions, in which signal is relayed around town using a number of self-configuring hubs that can route data intelligently in order to distribute system load and optimize efficiencies.

Given the choice, Bajarin said, the relative simplicity of the antenna technology may give it a better shot in the long run.

"If you look at 802.11 technologies, a mesh network is going to need a little bit more sophisticated routing technology integrated. Clearly if you can just have one antenna to boost that signal, that is going to be a better solution," he said.

As far as the numbers go, Williams says he is on the right track. His deployment thus far has cost $18,000 and should incur about $1,000 monthly in ongoing operational expenses. Subscriptions cost $24.99 a month, though the price may go as high as $29.99 a month if demand will support higher rates. For hotel guests and others on the move, the service will cost $6.95 an hour or $14.95 a week for unlimited usage. The service already averages 18 users a day.

Ultimately, Williams says, his company is aiming to generate 180 to 200 monthly subscribers within six months.

In targeting the home user, rather than the decaf-triple-latte-no-foam crowd, the Lexington effort is to some extent playing a numbers game. After all, some 80% of local PCs are desktops, not laptops. Clearly that's too big a market to overlook.

At the same time, Williams predicts a Wi-Fi evolution similar to what we have seen in cell phones. Once used for travel only, cell phones are increasingly being used as people's main household phones, as people cut their landlines in favor of a single unified device.

"I see [wireless] broadband following the same progression," Williams said.

Well, maybe. But there are quality-of-service issues, says Abner Germanow, program manager for enterprise networking at IDC.

Given the nature of Wi-Fi, "it might not be as good as DSL in terms of the reliability of the connection, or it might only be one side of your house that lights up," he said.

Still, most users will find it a big step forward, he predicted. "If you don't have broadband today, which is still the majority of households, then a broadband connection that is faster than dial-up and less expensive than DSL or cable: That may be very attractive."



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