All chips on MMDS

The high-speed data showdown may really begin this year, and Sprint is betting that multichannel multipoint distribution service will turn out the big winner.

"People don't really see this on their radar," says Tim Sutton, president of Sprint's wireless broadband group. "They will be surprised when we come out with a service that is compelling and cheaper."

Before assuming his current position, Sutton researched different broadband options for Sprint. He looked into DSL, cable modems, satellite and even unmanned airplanes. But after examining all the wireless spectrum up to 60 GHz, the carrier decided that MMDS could better address a larger market of households and small businesses than either DSL or cable modem service.

"We found that MMDS was the largest contiguous block of spectrum down low enough in the spectrum that we could use it for residential service," Sutton says.

Sprint has spent $1.3 billion buying companies that owned MMDS spectrum, which amounts to 200 MHz of spectrum in more than 80 markets covering about 30 million households. If the Sprint/MCI WorldCom merger happens, the combined company will have MMDS licenses that cover about two-thirds of the country, with access to about 60 million households. Until that merger is complete, though, the companies can't work together to roll out networks.

During the upcoming year, Sprint plans to build between 10 and 20 markets and significantly bolster its customer base. The following year likely will see the big boom in customers though, Sutton says.

Sprint believes the MMDS choice will put it in front of competitors. By comparison, AT&T spent more than $100 billion on cable concerns and still has to upgrade plant, which will allow it to reach about 25% of the country, Sutton says. Sprint also may have advantages over competitors in the types of services it can offer. In addition to high-speed Internet access, Sprint could offer video, portable access, Sprint Integrated On-Demand Network services and integration with wireless LANs.

Sprint bought into the MMDS market even before the two-way ruling was established - a risky move - but the possible payoff was too good to pass up, Sutton says. "We thought the upside was phenomenal."