TowerStream Takes the Empire State Building

By Sean Michael Kerner

May 26, 2004

Wireless provider lands a juicy piece of real estate for a broadband PoP.

First it was King Kong, now TowerStream. The WiMAX contender is moving to the top of the Empire State Building.

TowerStream announced today that it has added a wireless Point-of-Presence (PoP) 800 feet above NYC on the Empire State Building. The deployment complements TowerStream's other wireless PoPs in the New York metro area. TowerStream is deploying wireless broadband technology that the company says will meet the WiMAX, 802.16 wireless broadband certification standard known as WiMAX, expected to be ratified by the end of the year.

TowerStream is already installed in more than 100 New York City businesses; the addition of the Empire State Building adds increased coverage for wireless broadband access (T1 and 100 Mbps connections) to businesses in Manhattan. The company also is building a wireless broadband presence in Boston, Providence/Newport and Chicago.

"First we build a backbone, a wireless ring above each city that we go into," TowerStream COO Jeff Thompson told "Securing the buildings that will allow us to build the best backbone first is very important for us."

"Getting buildings like the Empire State Building is a very long and expensive project," he added.

Thompson explained that in the emerging wireless broadband marketplace, first-mover advantage is significant. "You definitely always have first-mover advantage when you're going on buildings like the Empire State Building," he said, "because you always have last-in roof rights, which means you are protected from other companies in your frequency. To go and grab beach-front property like that, which gives us great broadcasting capabilities, is definitely an advantage for TowerStream."

ABI Research Analyst Ed Rerisi said TowerStream's deployment shows the wireless broadband marketplace is emerging. "What it does show is that wireless broadband is starting to take off," Rerisi said. "NYC is full of Internet providers. There are choices between cable, DSL, Fiber, T1, T3, and there are tons of existing options out there. So, for TowerStream to come and say, 'We can compete and make money in this space even though there is a lot of competition,' I think shows that the business model is really viable."

Thompson said his company already offers much of the functionality of the anticipated WiMAX standard.

"Everyone knows that WiMAX gear is not here yet. We'll hopefully get some WiMAX certified gear in first quarter 2005," Thompson said. "The thing that some people are forgetting is that there are some important features that the 802.16 standard has in it, like quality of service, non-line of sight and higher throughput -- very reliable things in the actual standard -- which we do have now."

According to Thompson, TowerStream's deployment will comply with the WiMAX certification via a network overlay that the company plans to build on top of its existing network once the certified gear is available. ABI Research's Rerisi approved of the strategy and said the task is relatively easy.

Rensi noted that wireless broadband and WiMAX technologies will, from a pricing point of view, become attractive alternatives to enterprise customers using traditional T1 access. Still, he has a conservative outlook on the space. "I don't think you'll see WiMAX towers pop-up in every neighborhood overnight," he said. "I think what you'll see is more of a slower, more controlled growth mechanism."

Neither does Rerisi believe that wireless broadband will supplant wireline access from an overall market perspective.

"I think that wired connections will continue to dominate for a long time into the future," Rerisi said. "It's not very easy to switch. Sometimes you may have a lot of equipment you need to switch out, maybe you don't have roof rights. I think you'll absolutely see a lot of growth in the wireless segment, but I don't know that anytime soon you'll see a net number of subscribers for wireless broadband greater than wired."

"There is a lot of infrastructure there, and a lot of things already set up and running nicely," he said.

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