Changing the channel: MMDS operators shift focus to data; telephony on horizon

Far removed from the media frenzy that followed Bell Atlantic's entry into and subsequent exit from their market, wireless cable television operators are starting to stage a comeback.

Although several have declared bankruptcy and more are facing tough financial times ahead, a number have begun venturing into the Internet access market using multichannel multipoint distribution service (MMDS) spectrum. From a network perspective, users dial into an access point over a standard telephone line while data is delivered downstream over the wireless network. Some operators have started using two-way systems that send and receive data over the air, although regulatory permission for large-scale rollout of such systems is still pending.

Among the more aggressive operators is People's Choice TV. Under an experimental license from the FCC, PCTV is offering residential users in Phoenix Internet access speeds up to 10 Mb/s. In Detroit, the company has started marketing access to corporate users and counts several auto parts manufacturers and General Motors among its customers.

In fact, the company is so bullish in Internet access that it's selling off portions of its analog video customer base in favor of concentrating on data. Aside from testing the marketability of service to the two customer groups, PCTV, like most MMDS operators, has spectrum to spare.

"The service in and of itself has about a gigabyte of capacity," said Matthew Oristano, chairman and CEO of PCTV. "That's before you sectorize or cellularize the towers. Suffice to say, capacity is not an issue."

Like most discussions hanging over wireless cable operators' heads these days, though, money dominates. Setting up Internet access costs far less than converting existing analog systems to digital, which is one of the biggest reasons it's getting so much attention, said several executives. "Internet is a bright spot right now," said Henry Burkhalter, president and CEO of Wireless One.

Wireless One, which operates 37 wireless systems and is acquiring three more, is converting much of its spectrum that had been used to provide video services for Internet access. Branding it under the Warp One name, the company is launching one-way service trials.

Even long-time video operators are feeling pressure to enter the data market. American Telecasting, which counts 133,000 video subscribers, has started offering Internet service in three markets. Additionally, the company is in discussions with interexchange carriers and competitive local exchange carriers to use part of its spectrum for wireless local loop access.

"A year ago, high-speed Internet access was still just a thought," said Robert Hostetler, president and CEO of American Telecasting. "Wireless broadband access is here today. The big financial concerns of a year ago will put us through a few trepidations, but it's a good market."

Competition also is driving operators toward data access. Without converting to digital, the most wireless cable operators could offer in video is 33 channels, which can't compete with average landline cable or satellite providers. In the Internet access market, though, wireless operators provide a service that's on par with other high-speed options.

In Phoenix, PCTV is going head to head with Cox's @Home cable modem service and U S West's Megabyte asymmetrical digital subscriber line service. Recognizing those market conditions, the company has priced its service at $49.95 a month for residential users and $99.95 a month for businesses. Higher-end users with an ISDN return path are charged about $1400 a month, said Peter Lynch, vice president of marketing for PCTV. "We're not particularly convinced newbies will be apt to pick our service or prepared to pay what we charge," said Lynch.

ISP SLASHES PRICING Bucking the trend of rising Internet access pricing, Surfree.com has reduced its unlimited access rate to $14.95 a month. The company said it was able to cut prices because it has reduced its advertising.

PAKNETX SIGNS RESELLER DEAL PakNetX has inked a deal with Aspect Telecommunications to act as a reseller of its automatic call distributor software for management of Internet-based audio, video and data calls. Under the agreement, Aspect's consulting and systems integration group will have the option of offering the H.323/T.120 package directly to customers.