Canada's "Pre-WiMax" Solution

By Gerry Blackwell

April 12, 2004

Why wait for WiMax? A Canadian joint venture is ready to provide wireless non-line-of-sight broadband with a range of 20 miles and speeds up to 2.2Mbps, all with the added security of using licensed spectrum.

Why wait for WiMAX when there's NextNet Wireless? That's the thinking behind yet another major wireless Internet service provider (WISP) initiative based on NextNet's proprietary 3G-based Expedience technology, this time in Canada.

A yet to be named joint venture between a major wireline service provider and one of the country's four national mobile phone carriers last month launched high-speed wireless Internet service in two markets -- Richmond, a suburb of Vancouver on the west coast, and Cumberland, a small rural area near Ottawa, the nation's capital in eastern Ontario.

The new company is also doing test marketing with AOL in downtown Toronto. The partners say they will eventually roll out across the country, though they won't say how fast or how many markets will ultimately be covered.

The partners are Allstream , one-time partner of AT&T in the Canadian market, and Microcell Telecommunications, a mobile network access provider and operator of the Fido cellular service, plus NR Communications, a U.S.-based telecom investment firm headed by ex-McCaw wireless veteran Nick Kauser.

NR is providing the wireless equipment. Allstream brings cash and a backbone wireline network for wireless backhaul. Microcell, through its subsidiary Inukshuk, will provide the 2.5GHz licensed wireless spectrum to be used, plus its nationwide network of cellular towers.

"We're leveraging the strengths of all three partners, which is unique," says Ron McKenzie, Allstream's senior vice president for strategy and corporate development. "If one party had to do it on its own -- build the backhaul, build out the rights of way, build the customer solutions and so on, it would be very difficult or impossible."

By joining forces, the partners were able to get the service up and running in the first two markets very quickly -- within a matter of months, McKenzie says.

They chose the first markets carefully to get a read on customer behaviors in different types of markets. Richmond is a "tech-savvy suburb," Cumberland is a rural area (though close to Ottawa, one of Canada's high-tech centers) and Toronto gives the partners experience in a big city core.

"In each case, it gives us an idea of market segmentation and adoption rate," McKenzie explains.

He won't talk about the timetable for rolling out to the rest of the country. The schedule is still being finalized, and he doesn't want competitors to know what the company is doing. He implies the coverage footprint will ultimately map fairly closely to the coverage footprint of Microcell's Fido cellular service, which takes in all the major population centers in the country.

"We're going to aggressively deploy this in the marketplace, we will have a national network and footprint," McKenzie says.

The joint venture company is wholesaling capacity back to both Microcell and Allstream, which will function as WISPs offering access services directly to end customers, sometimes in competition. The joint venture is also hoping to attract other retail ISPs from outside the consortium.

The service will be up to 2.2 Mbps shared, and is designed to deliver as good throughput as cable or DSL, or better, McKenzie says.

Allstream has mainly focused in its core business on large and medium-size enterprises since it discontinued consumer services after a restructuring a year ago. It is using the network to offer a $60-a-month unlimited-download business Internet service that includes e-mail addresses and domain name hosting services.

"The wireless joint venture is the ideal platform for us to extend our offering to remote branch offices and telecommuters," McKenzie says. "Or it provides the platform for us to expand into the small business market.

Microcell will concentrate on the consumer market. Subscribers to its iFido service pay $40 a month for Internet access service that has some download limits. They can also bundle Internet service with wireless telephony as a replacement for local wireline service.

The NextNet technology supports supposedly telco-grade voice services along with high-speed Internet. Allstream will also offer voice services eventually.

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