TowerStream Begins Lighting Up New England
By Jeanie Stokes
from the June 18, 2001 issue of Broadband Week
Put together a former radio executive and an Internet service provider entrepreneur and you have TowerStream, one of the latest entrants in the fixed wireless broadband marketplace. The company, based in Newport, R.I., began offering high speed, always-on connectivity to small and medium-sized businesses during April in New England. After eleven weeks of operations, the company has 30 customers lit from five super-cell sites in Boston and Waltham, Mass., the Rhode Island cities of Providence, Cranston and Newport. Five more sites are in the works.
CEO Philip Urso and chief technology officer Jeff Thompson say their previous backgrounds provide an ideal mix of experience for the fixed wireless business.
"There are three disciplines involved in fixed wireless. One of the largest is being an Internet service provider. That involves billing engines, provisioning, customer service, having call centers," says Urso. Another distinct area is rooftop and tower management. "The third is the magic area. You have to know something about RF (radio frequency.)"
Urso and Thompson formed TowerStream in October after settling on Cisco Network Systems Inc.'s WT2700 fixed wireless solution for providing last-mile connections at the 5.7 GHz frequency in the Unlicensed National Information Infrastructure (UNII) band. While the company waited for Cisco to deliver, TowerStream secured antenna sites and erected towers, hired an experienced telecom sales staff and began talking to customers.
"When Cisco shipped, three of our customers that we had installed and were waiting, as soon as that last piece went in, they self-initialized and were lit up on April 6," Urso says.
New England is ripe with potential demand for a fixed wireless provider. The failure of regional digital subscriber line carriers and NorthPoint Communications "left a bad taste" about DSL in a lot of people's mouths, the executives say. Furthermore, its aged copper network has hampered regional Bell operating company Verizon Inc.'s DSL deployment, they contend.
"In the office park we're in, we have to serve ourselves. Before we had our POP sites up here in Newport, we couldn't even get a cable modem because the people who owned the building wouldn't let (the cable company) tear up the parking lot," Urso says. The city of Boston requires cable companies to put down huge deposits before getting a permit to lay cable.
Waltham, another TowerStream cell site, is a suburb west of Boston that's growing rapidly due to new technology companies. Telecom providers there are out of fiber and copper to provide new businesses with the connectivity they need, Urso says.
TowerStream doesn't see itself in competition with DSL or cable modem service because its product offerings begin at a symmetrical 2 megabits per second, slightly faster than a switched T-1 line.
"The broadband sweet spot, 2 megabytes to 10 megabytes, is where we've started our pricing plan," says Thompson. "We can adjust that customer from 2 to 22 megs without having a truck roll. There's no other equipment. It provisions in real time and bills accordingly."
TowerStream engineered its cell sites for a five-mile radius, although Cisco promises its vector orthogonal frequency division multiplexing (VOFDM) technology can deliver connectivity at distances up to seven miles without degradation of the signal. The company plans to limit the number of customers to about 200 per sector.
"We're not going to be doing any heavy over-subscription. If we get a dense subscriber base, we'll do what the cellular companies do, and go from a super cell to a smaller cell," Thompson says.
Urso and Thompson admit that New England is not without its challenges for the near-line of sight wireless technology.
"It's not mountainous to take advantage of a mountain, but it's hilly enough that you can't just have one POP that covers everything perfectly," Urso says.
The company charges a $1,500 one-time, set-up fee that includes the cost of the customer premises unit (CPU). "The cost of the CPU (customer premises unit) is high right now, but it's coming down. We've worked closely with Cisco on deploying this and the CPU's cost is supposed to come down before the end of the year," Urso says.
Monthly service fees are a flat $375 per megabit. That puts the cost of 2 Mbps service at $750 a month, compared with $1,200 a month for a T-1 line that provides 1.5 Mbps service. TowerStream's time from order to installation is three to five days.
The company has been funded so far by start-up money from Urso and Thompson, with an undisclosed amount of additional seed money. The executives say their business plan provides adequate funding through the year. TowerStream expects to have about 200 customers and be profitable by year's-end.
Urso has been managing, acquiring and selling radio broadcast stations since 1981 and also (along with Thompson) founded and managed the ISP eFortress, which later was acquired by Citadel Communications.
Thompson's background includes stints as a programmer for simulation company Flight Safetay and as eFortress's vice president of operations.
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