Business

Wireless in the Wild

McGrath, Alaska, population about 350, is smack dab in the middle of nowhere—221 miles northwest of Anchorage, 269 miles southwest of Fairbanks on the Kuskokwim River. It doesn't get much more remote than this when it comes to broadband services.

by Gerry Blackwell [August 16, 2001]

Some folks here have jobs, most with the government, but not many. More are subsistence hunters and gatherers, odd-jobbers and hard-scrabble miners.

Yet even six miles out of the village, McGrathites can pull down the Internet at up to 256 kilobits per second, thanks to McGrathAlaska.net, a service of McGrath Light & Power, the local electric company.

The ISP service was launched two years ago using satellite and license-free 2.4 GHz fixed wireless network technology.

And no, this is not a story about government freebies giving hicks access to something they never wanted and don't know how to use. It's a story about entrepreneurial chutzpah and community spirit.

The lesson for other ISPs—if McGrath Light & Power can do it, anyone can. Which is not meant as an insult to McGrath Light & Power. Bringing highspeed Internet to the backwoods and beyond takes a special kind of bravado.

Nature calls
It started two and half years ago at a time when a handful of McGrathites, including the general manager of McGrath Light & Power, Ernie Baumgartner, was trying to join the e-mail era. But they were struggling with 9.6-Kbps long distance dial-up connections to an ISP in Anchorage.

Baumgartner complained to his CEO, Carl Propes, that using e-mail to communicate just wasn't working. Half the time he couldn't get a connection, and everything was so-o-o slo-o-o-w. "So finally Carl said, 'Why don't we look into being our own ISP,'" Baumgartner recalls.

Propes and Baumgarner had another motive. McGrath is economically depressed, the population is shrinking. So revenues for the electric company were declining pretty quickly.

On top of that, the rising cost of fuel was jacking up the cost of generating power, so electricity prices were going up. Resourceful McGrathites responded by installing power saving devices and turning off appliances and lights.

Not a good situation for a power company.

McGrath Light & Power saw the Internet as a potential saviour. "If we could get this [highspeed Internet] to the people, maybe they'd start to use it for economic purposes," Baumgartner reasons. "That might bring more income in to the region. And that would mean they could afford to turn on more lights."

It was worth a try.

Alaska is big geographically, Baumgartner points out, but small population wise. "Everybody knows everybody else, or knows somebody who does." It was relatively easy to find out who knew about this stuff and what the hot technologies were. And people were willing to help.

Talent hunt
Baumgartner ended up buying 11-Mbps radios and antennas from Aeronet, now part of Cisco Systems, and routers from Spectrum Wireless, which he describes as "a local Alaska company," though it is now headquartered in Bellevue WA.

He found Isaiah Norton, a ninth grader who was interested in computers, took him to Anchorage for three days of informal training, gave him an old PC and a copy of Red Hat Linux and told him to get ready for the September 1999 service launch.

"That boy has been the system administrator ever since," Baumgartner says. "We have a 14-year-old kid running this thing. Well, he's 16 now."

Lynn Lopez of Seapac.net, the ISP in Wrangell, Alaska, another back-of-beyond community, came in for one day to set up the ISP operation and complete Norton's education.

A Spectrum Wireless team from Anchorage spent three days building the two fixed wireless sites, one for the main part of town, another for a "suburb" two miles out. The distance wasn't the reason for needing a second site, Baumgartner notes. It was the trees, which tend to get in the way.

McGrathAlaska.net bought a one-year service and maintenance contract from Spectrum Wireless. "And we used them a few times," Baumgartner says. "But after the first year, we'd picked up enough expertise to be able to carry on on our own."

Cold call
Severe weather has not been a problem. Temperatures can get down to 60 below in McGrath in the dead of winter.

Baumgartner had the equipment in his house for awhile until his wife complained about the loud hum from the router fan. So he had the gear mounted on the antenna pole in a wooden housing. No problem.

Total cost for the network: about $70,000. If he knew everything then that he knows now, Baumgartner says, he could have done it for $40,000 or $50,000. And since then, equipment prices have come down too.

The network supports about 40 subscribers who pay just $32 a month. The service also supports about 35 users on 33.6-Kbps dial-up connections. They pay $42.50.

"The rationale is that we want the dial-up customers to get on the wireless service so we can get rid of those modem lines," Baumgartner explains. "We're paying $35 each for them."

Homeless on the range
But wireless customers pay for their own equipment. When the service launched, it was a steep $1,000. Now it's more like $500 all-in-all—radio, antenna, cables, et cetera—installed.

Each of the two cells in the network has 11 Mbps of bandwidth, minus overhead, split in two (half for upstream, half for down) and shared among the subscribers. It's plenty.

McGrathAlaska.net's connection to the Internet backbone is a 256Kb satellite link from AT&T Alascom to Anchorage, then leased fiber to Portland OR where it connects to the WorldCom backbone.

Wireless subscribers can get up to 256 Kbps of Internet throughput, if there's nobody else on the network. But it averages more like 80 to 90 Kbps and can dip to 70 Kbps at peak periods.

That's still a lot faster than 9.6 Kbps. And fast enough, with filtering, software compression and local mirroring for everything up to and including watching streaming video, which many subscribers do.

Hard sell
One odd twist in the story is that many townspeople didn't want the service at first.

They were hoping they could get free broadband service through the local school district, which was rumored to be coming. They were afraid the existence of a for-fee service would discourage the government from acting.

"We had a tough sell to get people onside when we turned it up," Baumgartner admits. "We had about half a dozen sign up right away. But that was it for quite awhile. They were angry with us."

But gradually news of the speed, quality, and reliability of the service—McGrathAlaska.net has never had an equipment failure and rarely has down time—began to spread. It took about a year for the town to warm up to the new service, but eventually it did.

"Now, if we were to shut this off, I'd be in so much trouble I think I'd be in danger of getting lynched," Baumgartner says.

"We cannot take it away. Out here, people use it I think more than people in the cities, especially in the winter. There's not a lot to do here when it gets really cold."

Gold rush?
And has broadband access worked an economic miracle? Baumgartner admits that at first it was more a novelty. People used if for games and fun things, "and the kids just about Napstered us to death there for awhile."

But people are beginning to use it for shopping. One miner sells ivory and gold from his Web site. Another resident has become a day trader and, according to Baumgartner, is doing quite well. Another small company recently enquired about putting a website up.

The community also makes good use of the bulletin board service that McGrathAlaska.net provides. Discussions sometimes get heated too—such as when the governor caved into the animal rights lobby and banned hunting wolves from aircraft. (Locals, some of whom subsist on hunting, claim the wolves are decimating the moose population and need culling.)

The service is also profitable, marginally. But although McGrath Power & Light is a profit-making venture, it's not so concerned about making big bucks from being an ISP.

"We won't ever see a return of 15 per cent a year on our investment in this," Baumgartner admits. "But we'd be happy with a return of three or four per cent as well as the side benefits."

Like we say, if they can do it in McGrath, Alaska, you can do it in your town.

—End