International Herald Tribune
12-01-2004
Jeff Thompson may be afraid of heights, but he appears to be at home on the 81st-floor terrace of the Empire State Building. Overlooking the drop, a distance of 1,000 feet, or 305 meters, Thompson said he saw the entire New York metropolitan area as the battleground where his company, TowerStream, will challenge phone companies for high-speed Internet business customers by delivering fast, cheap service without digging up streets to install cables. Next to him, a TowerStream antenna beamed high-powered wireless Internet connections to companies several miles away. This kind of aerial system, many technology experts say, could uncork the most nettlesome bottleneck in the telecommunications industry: The phone companies' control of the ''last mile'' of wire that travels from their switching stations to homes and offices. ''We're competing against the Bells,'' said Thompson, referring to the major U.S. phone companies, ''so we have to work quickly.'' Waving his arm toward the potential customers below, Thompson, the chief operating officer at TowerStream, said with a laugh, ''This is when I get excited by heights.'' With 700 customers in five cities, TowerStream is the most active player in an emerging industry that sells a technology known as WiMax, or worldwide interoperability for microwave access. Unlike WiFi, the radio wave technology in airports and cafes that allows users to log on to the Internet from their laptop computers within 150 feet of an antenna, WiMax delivers broadband Internet connections through fixed antennas that send and receive signals across entire cities. Using the most powerful equipment, a single antenna atop a tall building can provide high-speed data transmission to users as far away as 30 miles, or about 50 kilometers, although the optimal range is less than half of that. The radio signals and antennas are not affected by bad weather and provide an alternative to data cables that are sunk below sidewalks and can be cut accidentally by construction crews. Price is another advantage of the system. TowerStream charges $500 a month for a 1.54-megabits-a-second connection, about one-third to one-half less than the cost of service on comparable T1 lines that phone companies sell to businesses for data transmission. TowerStream can charge less because it does not have to rent connections from Verizon Communications or other former Bell companies that run local switching stations. Getting businesses to buy WiMax is a challenge because the technology is new. TowerStream, which was formed in 2000 and, according to the company, has been profitable since June, is finding that securing rooftop space on skyscrapers is a hurdle, too. TowerStream spent more than two years negotiating a lease with the Empire State Building. But from that perch, and similar ones atop the MetLife Building and a phone company office in Downtown Manhattan, TowerStream can reach virtually every office in the city. ''The real estate is the hard part of the business,'' Thompson said. ''When you tell people you can reach 10,000 clients, they don't believe you. But everything I see could be a customer.''The business of delivering wireless high-speed Internet service is worth about $400 million globally and could quadruple in the next few years, according to the WiMax Forum, an industry group of WiMax providers and equipment makers. Businesses in urban centers are the primary focus. But customers in rural areas where there are no broadband connections to cable or phone companies are also targets. In those places, antennas can be placed on radio or cellular towers. WiMax is also being introduced in developing countries. WiMax and wireless broadband connections may dent behemoths like Verizon and SBC Communications, but they are unlikely to put them out of business. Large companies, particularly brokerage firms and banks, place the highest premium on secure data lines with backup power. Small companies may use WiMax as their primary data line, but for most companies WiMax will remain a dependable alternative to, not a replacement for, fixed lines. FreshDirect, an online grocery store in New York City, ordered a wireless link from TowerStream in March.FreshDirect already leased DS-3 lines to power its service center in Manhattan and its warehouse in the New York City borough of Queens. Now an antenna sits atop the warehouse roof, facing the Empire State Building a few miles west. The company has been expanding rapidly and needs backup Internet access to make sure its Web site and inventory, billing and management systems keep humming in the event any of its primary data lines fail.''In this business, it's not a matter of if, but when, something will go wrong,'' said Myles Trachtenberg, FreshDirect's chief technology officer. Level 3 Communications provides FreshDirect's primary data connection, and its backup line is from Globix. But Verizon operates only one switching station near the company's warehouse, and all Internet providers, including Level 3 and Globix, must go through that location. So FreshDirect was still vulnerable if the switching station had problems. TowerStream's connection has worked without a hitch, Trachtenberg said. In time, he plans to use it for Internet phone service as well. Still, there are limits to WiMax's expansion. Because it uses public airwaves rather than a licensed spectrum, signals are vulnerable to interference if providers overload a frequency in a market. Mobile phone companies, which are investing billions of dollars in third-generation cellular networks, may also increase the speeds of their data connections to compete with WiMax. WiMax is too expensive for residential use. The antennas on a customer's premises cost about $500 each For now, TowerStream and other providers use proprietary equipment and can beam signals only to antennas on rooftops. The WiMax Forum, which helps set industry standards, has endorsed the technology to deliver broadband to fixed antennas, but there is still no consensus on a standard for users to receive WiMax links on laptops and other mobile devices. In the meantime, TowerStream continues its hunt for skyscrapers on which it can plant antennas. In November, the company added service in Los Angeles, and plans to move into San Francisco in the first quarter of 2005, to go with current service in New York, Boston, Chicago and Providence, Rhode Island. Thompson said TowerStream planned to be in 10 cities by 2006.
2004 Copyright International Herald Tribune. http://www.iht.com
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