Why WiMAX; OUTLOOK: These wireless broadband technologies promise office-grade connections almost anywhere and breakthroughs for disaster recovery – eventually

by Joanie Wexler

The hot network technology du jour is WiMax, an informal term that covers two emerging broadband wireless standards for metropolitan-area networking. WiMax promises alternate routes to land lines for disaster recovery and relief from the price and service tyranny of the incumbent local-exchange carriers. It also has a compelling high-speed mobile component.

WiMax has the potential for what Carlton O'Neal, vice president of marketing at Tel Aviv-based broadband wireless manufacturer Alvarion Technologies Ltd., describes as "high-quality broadband everywhere that mirrors your connectivity experience in the office."

To the casual observer, WiMax backhaul services might not seem substantially different from today's broadband wireless access (BWA) services, though speed and coverage range are expected to improve. However, having standards for non-line-of-sight (NLOS) BWA products will create economies of scale and vendor interoperability, which should help WiMax-based services proliferate beyond the niches where BWA services can currently be found. This means that the benefits of BWA as a land-line alternative should theoretically become available to more sites and users.

"Fixed" access services and products will emerge in early 2006, followed by the mobile flavor a year or so later. There are two corresponding WiMax standards:

IEEE 802.16-2004 for fixed point-to-point and point-to-multipoint wireless access. It's akin to a faster, airborne version of Digital Subscriber Line (DSL) or cable-modem services and became the industry's first NLOS BWA standard last June.

IEEE 802.16e, for mobile wireless access from laptops and handhelds. It's analogous to a faster version of third-generation telecommunications technology. WiMax proponent Intel Corp. has promised 802.16e-enabled laptops by early 2007.

Intel is also involved in the 802.16-2004 standard effort. The vendor says it's providing silicon to Alvarion, Proxim Corp. and Redline Communications Inc., which are manufacturing last-mile fixed products for the carrier market.

The technologies based on the two standards operate in licensed and unlicensed frequency bands below 11 GHz. The standards are being overseen from a market-acceleration standpoint by a 230-company consortium called the WiMax Forum.

Enterprise Impact

WiMax is being deployed from the top down as a carrier technology first, which means that schedules for service availability are dependent on widespread testing and buy-in. WiMax product standards certification and interoperability testing, overseen by the WiMax Forum and to be conducted by independent test lab Cetecom Spain in Malaga, is slated to begin in July.

Once services become available, growing business sites should gain inexpensive broadband access with speeds between T1 and T3 line capabilities. And because they're airborne, these services can be quickly deployed -- often in a day's time -- and bypass lengthy ILEC lead times.

"Every enterprise struggles with the cost of [local] access, which is often 40%" of a telecommunications bill, says David Willis, an analyst at research firm Meta Group Inc. "The natural monopolies have starved out local competition. But WiMax doesn't require dealing with lobbyists or tariffs."

Adds Alan Menezes, vice president of marketing at Aperto Networks Inc., a maker of BWA products in Milpitas, Calif., "Enterprises gain alternatives to the [regional Bell operating companies] and backups to terrestrial T1 and fiber links that can be cut at the same time." In addition, WiMax comes ready-made with provisions for quality of service (see "QoS Advantage," next page), so many pre-standard services already support voice over IP, unlike many DSL and cable-modem options.

And standards-based technology should drive down customer premises equipment (CPE) costs for fixed connections, from about $800 today to $300 to $400 in 2006 or 2007, says Bob Egan, president of Mobile Competency Inc., a consultancy in Providence, R.I. Meta Group is even more bullish: Willis says he expects WiMax CPE to drop to $70 by 2007.

Finally, businesses can buy WiMax-certified products to install in their campus-area networks as alternatives to private fiber connections and more-complex wireless bridging options.

Disaster Recovery Shoo-in

According to vendors, service providers and analysts, starting in about 2007, an important 802.16-2004 application for enterprises will be disaster recovery -- whereby the wireless link serves as either the primary or the backup connection. The reason is that two terrestrial links are likely to be cut simultaneously.

"It's hard for a backhoe to cut packets flying through the air," says Brian Chernish, network operations director at Western States Insurance, a 27-site company in Missoula, Mont. For about three years, Western States has been using pre-WiMax BWA services from TransAria Inc., a managed data services provider covering six states in the northwestern U.S. TransAria says 70% of its customer base is using "WiMax-class" services deployed with Aperto equipment.

"There's a cost advantage to me already with wireless: I'm paying about one-third the cost for a broadband wireless link as I would for a comparable wired T1," says Chernish. When the mobile version of WiMax emerges, "I should be able to drive around with a broadband VPN for voice and data procured from a single provider," he adds.

"Prior to 2001, no one had a serious disaster recovery budget," says Egan. "Alternative backhaul and disaster recovery should be the primary things about WiMax on enterprise minds now."

For example, WiMax-bound TowerStream Corp., a BWA provider operating in five large U.S. markets, offers a pre-WiMax disaster recovery service, whereby a full T1's worth of bandwidth sits available for $175 per month as a backup in case a primary link should fail. The Waltham, Mass.-based company, which plans to expand into 10 U.S. markets, also offers its customers the option of turning up their wireless speeds over the weekend for data backups, for which they pay a temporary premium, says Jeff Thompson, the carrier's chief operating officer.

Regional and local service providers can look forward to the benefits of WiMax, if they are delivered as promised in infrastructure equipment.

"We have more customers than we have bandwidth available," says Rod Mitchell, general manager of broadband services at Midwest Wireless LLC, a broadband wireless and cellular service provider in Mankato, Minn., that serves Minnesota, Iowa and parts of Wisconsin and South Dakota using an Alvarion BWA infrastructure.

"Enterprises are using more bandwidth everyday," says Mitchell. "Instead of selling a 512Kbit/1Mbit/sec. pipe [upstream/downstream, respectively], I should be able to offer 2Mbit, 4Mbit and more than 15Mbit/sec. symmetrical speeds" with WiMax, he says.

But WiMax services aren't necessarily a slam-dunk. "If it delivers all that's promised, I'm for it," says Todd Graetz, chief technology officer and vice president of operations at TransAria in Bozeman, Mont. Those promises include lower subscriber-unit costs, 40% to 50% extended-coverage ranges, depending on the frequency used, and faster speeds. Graetz says he hopes for "an order of magnitude" improvement over his current 40Mbit to 60Mbit/sec. Aperto products. "If I see enough of those items, I'll put WiMax on the network," he says.

Since businesses shy away from multiple carrier relationships, which are complex to support both from a technical support and a billing standpoint, regional carriers such as TransAria and TowerStream have begun entering into wholesale and aggregator partnerships. Through the partnerships, customers can use all their services through a single provider.

The traditional big-name carriers refuse to publicly commit to the fledgling technology. Sprint Corp. and Nextel Communications Inc. likely have the most to gain from WiMax, because the merging companies collectively own a heap of spectrum in the 2.5-GHz licensed band, one of the U.S.-sanctioned frequencies for BWA traffic such as WiMax. They have licenses in well over 100 top markets, Egan says. The companies declined to comment on their WiMax plans, however.

Verizon Communications Inc. is focusing most of its last-mile efforts on a well-publicized fiber-to-the-home effort in 11 states. However, "we're always evaluating a number of trials of different wireless-access technologies," says spokesman Mark Marchand.

For its part, Verizon Wireless prefers to concentrate on "selling bananas from the banana truck; that is, promoting the service offerings we have today" -- namely, CDMA 1xEV-DO 3G technology -- rather than "blowing forth on technology that's so far out," says spokesman Jeffrey Nelson.

Is Intel doing its part to push 802.16e into the mobile network operator infrastructure so its forthcoming WiMax-capable notebooks will have networks to connect to? Walter Gintz, market development manager at Intel's wireless network group, says only that "we're having discussions surrounding mobility with all different parts of the mobile ecosystem."

Reviving Competition

Given that the Federal Communications Commission ruled in December to largely free telecommunications incumbents from their unbundling obligations to competitive local exchange carriers (CLEC), WiMax is perhaps one of the last-gasp hopes for getting better local-loop services faster at better prices.

At press time, Chernish had been waiting several weeks for his incumbent operator to install a T1 as a backup redundant link to his wireless link in a critical location. Chernish says he would "love to see the incumbents get taken out of the picture."

"And alternative operators, such as cable operators, might play in the WiMax space," suggests Egan.

Graetz says that wireless allows his company to "bypass the incumbent switched network and control the last-mile and overall experience for the customer."

He observes that earlier CLECs raised funding to just resell incumbent services. "They didn't succeed, because their entire business plan was dependent on their sworn enemy," in that they required cooperation in using some or all of the incumbents' network elements to provide service, Graetz says.

Willis is predicting "early adoption in rural markets and wireless backhaul within the carrier networks" but says the industry won't see broad adoption of WiMax until 2009, when economies of scale are likely to kick in.

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