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Tuesday, June 8, 1999

New era of wireless service emerges
But consumers unlikely to see benefit soon
By Bruce Meyerson
Associated Press

   NEW YORK - There's only one phone wire and one cable wire going into every home, so many companies that want to bundle telephone, TV and Internet services are banking on a new wireless technology as an alternative.
   It bears the clunky and contradictory sounding name of "fixed wireless" and it may allow companies to reach places where telephone wires and cable aren't an attractive option.
   MCI WorldCom and Sprint, looking to bypass the cable and telephone wires controlled by a handful of competitors, have spent wildly on the cellular-like technology in recent months, gobbling up just about every purveyor of a fixed-wireless offering called Microwave Multipoint Distribution Services, or MMDS.
   With that market practically cornered, attention is now turning to the next generation of fixed-wireless access, Local Multipoint Distribution Services.
   On Monday, Motorola and Cisco Systems announced a new partnership to develop LMDS network equipment. While Motorola is the lead partner in the venture, the move by Cisco, the top player in networking technology, shows the crucial role that fixed wireless has become in the race to provide a variety of high-speed communications.
   "Cisco only partners with another company when it's to their advantage and very often only when they're lacking something," said Lisa Pierce, an industry analyst at Giga Information Group.
   But while fixed-wireless technology is a cheaper and easier way to bypass cable and phone systems than digging up the ground for new fiber optic networks, consumers probably won't see the benefits any time soon. Instead, service providers will likely focus on big-spending business customers.
   "If costs get low enough, fixed wireless could go into the home, but that's not the initial target," said Luke Szymczak, an industry analyst at Prudential Securities.
   A more viable wireless alternative for consumers may be satellite transmission to small dishes like those used by DirecTV television, but it will be several years before that type of service is available.
   Hughes Electronics, the parent of DirecTV, and Lockheed Martin are both leading satellite initiatives, but don't expect to provide two-way, high-speed Internet access and telephone calls until 2002.
   And although LMDS can transmit up to 100 times faster than the cable TV connections and the phone-based service known as Digital Subscriber Line, or DSL, there are shortcomings to fixed-wireless technology.
   For one thing, the transmission towers used in fixed wireless need a direct line of sight to transmit to any customer. Bad weather can also be a problem.
   "They do face challenges, particularly with the rain," said Pierce. "You also have to convince the owner of a tall building to rent out space. Chances are that owners of those buildings are no dummies. They know what their real estate is worth."