FIXED WIRELESS PROVIDERS RACING TO CAPTURE MARKET SHARE

O'Connell cited statistics that 8-10% of U.S. households had broadband access now, with 70% served by cable and 30% by DSL. “If we don’t get the show going quickly, 50% of the U.S. will be done,” he said. Panel participants, echoing sentiment that has run through show this week, said standards were among most critical components to getting equipment costs down. Standards must focus on near-line-of-sight transmission technologies and customer-premises equipment that’s easy to install, Canada’s Inukshuk Internet CEO Jacques Paquin said. But several equipment vendors warned service providers to temper their expectations on both costs’ going down and standards’ being finalized, saying both took time. “We have obligations as vendors to put some sanity and rationality into non-line-of-sight systems,” said Hatim Zaghloul, CEO and cofounder of Wi-LAN. Near or non-line of sight technologies are highly sought by service providers as way to significantly increase coverage of equipment, although Sprint was only major service provider at show that went into details of 2nd generation, near-line-of-sight testing. Non-line-of-sight systems won’t be available for 18 months to 2 years, Zaghloul said.

But Ernesto Vargas Guajardo, pres. of Mexico’s MVS Multivision and co-founder of Assn. of Latin American MMDS Operators, said industry faced “chicken-and-egg” scenario. Dilemma is that operators can more easily do large-scale deployments when equipment costs come down but equipment vendors can’t bring costs down until customer levels reach higher volumes, he said. One issue in Latin America has been that operators are waiting for large-scale deployments of 2nd-generation, near-line- of-site equipment from WorldCom and Sprint in U.S. to help bring down costs, Vargas said. “Unfortunately, it’s taking much longer than we thought it would,” he said. “Markets can’t wait forever.”

Nucentrix’s McHenry said he was more optimistic now than year ago on time that fixed wireless industry has on its side to go after DSL and cable competitors. Year ago, capital markets were rewarding broad range of business plans, practice that since has dried up, he said. “Last year, I thought the window was shorter [for fixed wireless] than I do today,” he said, referring to small and medium-sized markets. It’s still key for fixed wireless providers, however, to gain presence in top 30 or 40 markets “sooner rather than later” since attention of entire broadband access industry is focused there now, McHenry said. Several panelists said part of balancing act for industry also has to be focus on standards being wrapped up by IEEE and European Telecommunications Standardization Institute. “We need to make sure we don’t stall fixed broadband wireless by waiting for standards,” Adaptive Broadband Vp-Mktg. Franchesca Walker said: “Standards take a lot longer than we would like.” -- Mary Greczyn

WCA Show Notebook…

Saying company holds MMDS licenses in 90 markets, Sprint Vp- Federal Regulatory Affairs Jay Keithley said company had filed applications at FCC to provide 2-way services in 56 markets and had received approval for 49. Sprint Broadband Direct, as company’s fixed wireless offering is marketed, has 48,000 customers on its network, with plans to expand to 100,000 by year- end, he said on Wed. panel. One of toughest problems that Sprint has faced is meeting demand, he said: “We have had upstream capacity problems. We have been offering services upstream on our MDS 1 and 2 channels in all of our markets.” FCC recently approved company’s offering upstream communications in-band to handle capacity issues, Keithley said. “The problems we are having, candidly, are getting rolling with a very popular service.”

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Concerns over how FCC will decide 3rd generation spectrum allocation has dominated conference discussions this week, while additional uncertainty of NextWave ruling last week has been raised repeatedly. Supreme Court decision upholding NextWave licenses “has thrown the C-block spectrum up in the air,” Motorola Telecommunications Dir. Steve Sharkey said. “Since that was spectrum that carriers were going to depend on for expansion of their services, it puts even more pressure on” 3G decisions, he said. Unfortunately, Sharkey said, one of advantages of auctions that had been touted had been “that they could make services available to the public more quickly and in this case that hasn’t been the result.”

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Instructional TV Fixed Service and MMDS licensees said they faced basic issue of how to structure 15-year ITFS excess capacity agreements with 3G outcome unclear. One main problem, said John Schwartz, pres., Instructional Telecommunications Foundations, is that advanced service offerings that are part of agreements signed now could change dramatically in 15 years. Issue is particularly relevant on levels of interference from adjacent MMDS operations that ITFS licensees agree to accept now, if those neighboring systems should alter their offerings significantly in the future, he said. Curtis Henderson, senior vp-gen. counsel, Nucentrix Broadband Networks, acknowledged that such considerations were part of “balancing act” for such leasing agreements, which have become more complex with onset of digital and 2-way services. “We have to ask for some flexibility in designing and operating an integrated system,” he said in panel discussion.