WCA International Visionaries Roundtable: The State of Broadband Wireless Access

The discussion turns to the economy and its impact on deploying fixed wireless broadband services in North America. Don't expect a lending hand from the federal government—unless you're in Canada.

by Patricia Fusco ISP-Planet Managing Editor [June 28, 2001]

Moderator Allan Dodds Frank, CNN Financial News investigative correspondent, opened the session stating that he finds the wireless broadband access fascinating—but exceedingly complicated. Frank said the "industry is at the turning point, driven by forces even greater than the telecom industry itself—namely, Wall Street," adding jokingly that the wireless broadband sector has more "acronyms then the Pentagon."

All frivolity aside—money, financing and venture capital weigh heavily on the minds of both exhibitors and attendees at this year's WCA Convention wrapping up in Boston this week. Where will the money to fuel the broadband sector come from? Will the benefits of wire-free broadband services ever be delivered to a diverse Internet populace thirsty for high-speed access?

Frank didn't mince his words. He asked the group of "visionary" panelists, consisting of two regulatory and three industry heavy weights, "are we in a recession right now?"

Catch a falling star
William J. Rouhana, Jr., Winstar Communications chairman and chief executive office quickly replied "yes," to Frank's question—then explained what it's like to be scrutinized by attorneys and bankers as the company struggles to regain its financial footing under Chapter 11 bankruptcy protection.

"From my perspective we're in a depression. A real recession, if we are in one, is good for voice competition, but bad for data," Rouhana said. "Winstar's vision remains unchanged. Broadband will add to the efficiency of business. For seven years everything was right on track and things we're going beautifully. But financial markets could not grasp that this process would take time and money."

"Real life broadband demand is robust and delivery efficiency is key," Rouhana continued. "What isn't available is the capital. Until we come to grips with this supply-demand dichotomy, we're all going to be stuck in never-never land. The pendulum has swung way too far to the negative.

"In order to really believe that broadband can be delivered in a cost effective manner, the financials have to change. Capital markets must come to grips with the fact that you can't replace a network it took 100 years to build in a couple of years," Rouhana concluded.

Money = market share
Jai P. Bhagat, AIR2LAN chairman and chief executive officer, also part of WCA's license-exempt spectrum alliance, said that right now 70 percent of U.S. small- and medium-size businesses (SMBs) are delaying a broadband decision due to costs involved.

"AIR2LAN is operational in five markets and we're extremely happy with our performance since its debut," Bhagat explained. "In 13 months we have about 10 percent market share, which translates to about 5,000 customers in Jackson, MS.

"Our vision is to replicate this model in 40 markets—building on the success of Jackson to offer SMBs affordable broadband solutions," Bhagat said. "We hope to work with the FCC to provide the spectrum necessary to grow. But the capital market will tell us how many markets we can grow into."

World worries
Kerry McKelvey, WorldCom Broadband Solutions president and chief executive officer, said times are tough right now, so WorldCom is deploying its Multichannel Multipoint Delivery System (MMDS) broadband solution slowly and buying smarter. What concerns McKelvey is available funding for equipment makers and the implications of the economic slowdown.

"The last 12 months the MMDS industry spent time with fixed service companies and most of the work has been on the engineering side of things. We have a broadband service that people want out in the marketplace. It's a very simple solution with a quick install reaching SMBs in Tier-1 and Tier-2 markets," McKelvey explained.

"That's what we're going forward with, but we're somewhat myopic. People want the service and we want to get it out there. Times are tough right now. In some markets we're buying more affordable gear to build a more competitive offering," McKelvey continued.

"But it's important to keep the fixed wireless broadband industry healthy and we need vendors to provide new equipment and better technologies in terms of customer premise equipment (CPE) and at headends. Vendors are jettisoning the R&D budgets, not looking toward future needs, due to current market conditions," McKelvey said. "We need to keep vendors healthy during this time if we're really going to deliver all the benefits of wireless broadband access."

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