December 15, 1999 Web posted at: 10:02 a.m. EST (1502 GMT) by Denise Pappalardo

From...

(IDG) -- As fixed wireless service choices continue to multiply and evolve, business users will need to keep close tabs on the players and rules in this rapidly changing segment of the WAN market.

Fixed wireless services offer business users another option beyond landline local access, an alternative that typically promises higher-speed services at competitive rates.

WinStar and Teligent have been betting the farm on fixed wireless services for a couple of years. And now the three big interexchange carriers (IXC) and Craig McCaw's Nextlink Communications are heating things up with new service promises for business users, says Michael Smith, a program director at Stratacast Partners, a consulting firm in Mountain View, Calif.

MORE COMPUTING INTELLIGENCE

IDG.net home page

Network World Fusion home page

Free Network World Fusion newsletters

Rollout of AT&T fixed wireless looks slow, 12/7/99

Kennard: Fixed wireless could rival DSL, cable, 12/10/99

Reviews & in-depth info at IDG.net

E-BusinessWorld

Year 2000 World

Questions about computers? Let IDG.net's editors help you

Subscribe to IDG.net's free daily newsletter for network experts

Search IDG.net in 12 languages

News Radio

Fusion audio primers

Computerworld Minute

Last week, AT&T reaffirmed its plans to offer customers fixed wireless local loop services. AT&T will be using its existing personal communications services spectrum to offer a local loop bypass service in areas where it will not offer cable or traditional landline local services.

Earlier this year, MCI WorldCom and Sprint acquired a handful of multipoint multichannel distribution services (MMDS) providers to directly reach more users in local markets. Combined, the carriers have invested almost $1 billion in picking up these fledgling MMDS companies that were all in financial disarray.

While MMDS has been around for about 10 years, it is now attractive to IXCs such as MCI WorldCom and Sprint because the Federal Communications Commission is in the process of changing the rules that govern the technology. MMDS, which is in the 2.5-GHz to 2.7-GHz spectrum, was designed as a wireless cable television technology supporting only one-way network transmissions. But now the FCC is expected to allow MMDS license holders to support two-way services that will let users send and receive data at up to 10M bit/sec.

But many challenges lie ahead for MCI WorldCom and Sprint. "We're hoping the FCC will make a ruling by April that will open up the spectrum," says John Stupka, president and CEO of MCI WorldCom's SkyTel wireless division.

Now that MCI WorldCom and Sprint are in the MMDS game, more vendors will be willing to develop better technology, Stupka says.

"There wasn't much incentive for vendors to develop MMDS equipment in the past because so many of the license holders didn't have sound financial plans," Stratacast's Smith says.

However, business users shouldn't expect to see widely available MMDS services until the end of next year. Moreover, analysts believe that MMDS will be offered primarily as a consumer service, perhaps for home office users, but mostly as a means of bypassing local exchange carriers.

Business users may find the most compelling offerings coming from local multipoint distribution services (LMDS) carriers and the WinStars and Teligents of the world, says Chris Whitely, a project manager at Insight Research in Parsippany, N.J. LMDS carriers, such as Nextlink, are starting from ground zero and are still testing services, but LMDS holds more promise than MMDS, he says.

Nextlink is expected to roll out commercial LMDS voice and data services this month, says Doug Carter, the company's chief technical officer. The services will most likely be launched in Dallas and Los Angeles, cities where Nextlink has been conducting trials.

The users who will benefit most from fixed wireless services such as LMDS are those who don't have fiber running directly to their buildings, Smith says. "The cost of deploying a fixed wireless service is by far cheaper than a carrier deploying miles of fiber-optic cable."

Nevertheless, Nextlink says its LMDS services most likely will not be cheaper than its standard access services, a tactic that is sure to raise eyebrows.

As holder of the largest number of LMDS licenses in the U.S., Nextlink says it will be rolling out the technology to office parks and buildings where high-speed fiber-optic network services are not available. In other words, Nextlink is targeting customers whose choices are a 56K bit/sec link or an LMDS service that can combine local, long-distance and data on one connection at up to 1G bit/sec.

While targeting users with limited choices can be an effective initial strategy, it probably won't work long-term in markets such as New York and Philadelphia because business users typically have more choices there, Smith says.

"Fixed wireless carriers are going to have to be creative in rolling out service offerings," Whitely says.

For example, Teligent, which offers fixed wireless services in 34 markets and boasts 7,500 customers, offers business users an interesting guarantee: If customers are not satisfied with its SmartWave local voice and data services, Teligent will switch them back to their previous services at no charge.

WinStar, which offers fixed wireless through digital microwave technology in the 28-GHz and 38-GHz spectrums, is offering customers a free year of local voice services if they sign a three-year contract.

In addition to its digital microwave services, WinStar holds a handful of LMDS licenses and is currently running trial tests. WinStar expects to roll out commercial LMDS services sometime next year.

Teligent and WinStar also have a leg up on the new fixed wireless players, point-to-multipoint services. Teligent has point-to-multipoint services in 20 of its 34 markets and WinStar has six of its 70 markets offering the service. Point-to-multipoint is essentially the Holy Grail of fixed wireless services in that it supports on-demand bandwidth. That ability means that users only pay for what they use, eliminating the fixed monthly fee for a 45M bit/sec chunk of bandwidth that reaches full capacity only a couple of times per month.