Whatever Works
Quest for high-speed access creates a slew of solutions
By Jeanie Stokes
from the March 19, 2001 issue of Broadband Week
When it comes providing high-speed broadband Internet access to areas outside the largest U.S. metropolitan areas, local ISPs and other service providers are showing that there's more than one way to skin a cat.
Demand for broadband access is being met in a variety of ways in regions that either are too far from a central telephone switching office to get digital subscriber line (DSL) service or out of the local cable TV company's footprint. In some cases, the local Internet service provider is taking up the challenge. Elsewhere, it may be a fixed wireless broadband equipment company that's choosing a market and then hunting for local resellers, or offering services on its own.
The result is a slew of new, smaller broadband service providers that say they're successfully competing head-to-head with the big telecom companies.
Southwest Kansas Online
It's not easy to catch Southwest Kansas Online's president Doug Brewer in the office these days. The ISP executive spends a lot of his time visiting customers to install DSL equipment.
The tiny ISP is based in Liberal, Kan., and serves 15 towns across the southwestern part of the state, a market of about 30,000 households. Southwest Kansas Online began offering high-speed Internet access in December, via DSL. So did the incumbent phone provider, SBC Communications Corp.'s Southwestern Bell, which hadn't offered even dial-up Internet access there previously.
The ISP chose to add DSL service because the regional cable company, Adelphia Communications, wouldn't partner with it to offer cable modems, Brewer says. He buys his DSL access through IP Communications, a data local exchange carrier.
"I could have chosen Southwestern Bell and just resold SBC services, but I'd have had no control of quality or anything. When the customer calls us, I don't want to say, 'well, it's so-and-so's problem,'" Brewer says.
He's also looking at fixed wireless broadband to serve some towns where DSL isn't economically feasible.
Brewer says that he's been able to compete head-to-head with SBC's DSL offering because he relies on word of mouth, rather than advertising, to spread the word about his high-speed service. He priced DSL at about $50 a month and is relying on high-quality local service to help retain customers. "There isn't any money in DSL, but you also don't want to give up your customers," Brewer says.
"It's not costing me so much that I can't afford to operate. I'm not planning on 10,000 customers. Five hundred customers in my case would be a lot better than 10,000 the way the others are doing it," Brewer says.
So far the service has "surpassed our projections," although Brewer won't say how many customers he's signed on.
eSpeed AZ
eSpeed AZ owns multichannel multipoint distribution service spectrum licenses for Yavapai County in north central Arizona, and is finding it pays to be the industrial-strength Internet provider in the nation's fastest growing rural county.
"There's DSL in one town and it's not working very well, and a cable modem provider in one portion of our territory. For the most part, aside from eSpeed, the county is bandwidth poor," says general manager Mark Davis.
eSpeed has one main transmitter with a range of about 35 miles, and this month is setting up three sectorized hubs. That will boost the network's capacity to about 16,000 high-speed customers from about 1,000.
eSpeed signed up about 600 customers in its first year of operations, and is now adding about 100 a month, thanks to word-of-mouth advertising. The company, based in Prescott, Ariz., says most of the area's larger businesses are among its customer base, which is 30 percent business and 70 percent residential. The company charges $39.95 a month for 128/384 kilobits per second service and $59.95 for 256/768 kbps service. Installation and equipment cost are a one-time $199. eSpeed also offers conventional dial-up Internet access.
"About everyone who comes to us already has dial-up access. They're just tired of the slow speed," Davis says. "We have a lot of the more sophisticated users, retired folks in the area. Sedona is an upscale retirement location." There are a couple of ISPs attempting to do high-speed wireless access with networks operating in the unlicensed 2.4 GHz spectrum and "they aren't able to compete effectively," he contends. "They don't have the RF experience. We have a fiber backbone into the Internet, where they're sitting on one T1."
eSpeed uses equipment from Hybrid Networks for its modem and home office equipment and built its network using wireless transceivers from Andrew Corp.
Clearwire Technologies Inc.
Clearwire Technologies Inc., a three-year-old, privately held company headquartered in Arlington, Texas, got its start designing wireless transmission systems based on technology developed for the military by its former parent, Sierra Technologies Inc.
Clearwire's customers include more than 50 ISPs in markets the company believes are ripe for development.
Interest in high-speed Internet access in Tier 2 and Tier 3 markets "far exceeds that in the Tier 1 NFL cities," because they have fewer options, says Bob Wieneke, vice president of corporate relations.
Hoping to avoid some of the financial problems encountered by other DLECs, the company decides which markets meet its target business demographics and then cultivates ISPs that have focused on delivering business services as resellers.
"We're acting as the enabler. They can take our wireless technology, bundle it with the services and products their customers need, and deliver it as a package to the end user," Wieneke says. Clearwire currently is operating in Buffalo, N.Y.; Dallas and Fort Worth; Tulsa, Okla.; and Albuquerque, N.M. It will add seven more cities later this year.
Clearwire wholesales its wireless equipment and services to the ISPs at prices that are on par with business DSL. The ISPs in turn are selling the Clearwire product for $100 to $300 a month, including the cost of equipment. "We're not offering $39.95 a month residential services," Wieneke says.
Clearwire uses the unlicensed 2.4 GHz spectrum and gets a range of up to 25 miles from a tower, depending on the size of an antenna. It plans to boost its current DSL-comparable speeds of 128k to 512k to T1 capacity with second-generation equipment beginning in the third quarter.
Renaissance Technologies Inc.
Tempe, Ariz.-based Renaissance Networking is an R&D company that two years ago began an initial test of its wireless router technology. Last summer, the company launched its high-speed Internet access for small and medium businesses from four cell sites in the Phoenix area--around the city's Sky Harbor Airport, at the Scottsdale Airpark and in suburban Tempe.
Using its own technology, RNI offers high-density build out and can service many customers with a modest investment, says RNI president Jeff Clark. The company produces transceiver equipment for the 2.4 GHz unlicensed spectrum.
RNI's low costs allow it to justify adding new cell sites with only a handful of subscribers, Clark says. "We've really brought the price of customer premise equipment down so no one can compete with us."
RNI delivers Internet speeds ranging between 192 kbps and the 1.5 Mbps equivalent to T1 service. It has signed up about 70 customers so far and is growing at a rate of about one new small or mid-size business customer per day who isn't ready for a T1 line. It's also looking to commercialize its technology and build itself into a leading high-speed access provider in the southwestern United States.
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