Come on, take a free ride

Operating in the unlicensed spectrum has its challenges, but several operators and vendors have jumped into the space to roll out high-speed broadband wireless applications at a lower price point

They're cheap. In fact, they're free. For some service providers, they're a short-term fix. For others, they're an essential part of a business plan to enter the wireless world and offer competitive services for a bargain.

Unlicensed frequencies. Although they can spare providers from dealing with the federal government and paying sizable spectrum bills, the fact that no one can own even a small slice makes unlicensed frequencies a prime target for interference.

Despite the ups and downs of operating in unlicensed territory - whether it is ISM or U-NII - wireless providers can offer high-speed Internet access and value-added services to consumers faster and cheaper than their license-toting counterparts. In fact, the unlicensed space gives these providers a chance to gain spectrum and compete in the broadband wireless industry instead of having to raise capital, only to spend it outbidding competitors at spectrum auctions.

A dip in the public airwaves

Until the FCC opened up the unlicensed-national information infrastructure frequency, or U-NII, in 1997, the available unlicensed spectrum was the frequency allocated for industrial, scientific and medical applications, or the ISM band, which was opened in 1989.

Inviting providers to operate in the unlicensed space did more than boost competition; it gave start-up providers a way to operate without acquiring a lot of debt. Moreover, when the FCC opened the U-NII frequency, it introduced a band that has more spectrum and bigger frequency channels than ISM.

"None of the ISM bands could handle the products we saw at Supercomm this year," says Todd Carothers, vice president of marketing with Adaptive Broadband. Because a product in the ISM band has a lower data rate, "we chose to have a broadband pipe that could support applications now and in the future," Carothers says.

There are four ISM bands, which fall in the frequencies 915 MHz and 2.4, 5.8 and 24 GHz. The U-NII band falls in the frequency range of 5.2 to 5.8 GHz (Figure 1).

Adaptive Broadband's AB-Access technology spans the frequency range from 2 to 42 GHz, and the vendor has deployed its offering in U-NII frequencies from 5.25 to 5.825 GHz, as well as in the local multipoint distribution service (LMDS) 28 GHz band and between the 2.5 to 2.7 GHz multichannel multipoint distribution service (MMDS) band.

Although unlicensed spectrum often gets a bad rap, many providers turn to it because they need licensed and unlicensed frequencies to fill the holes in their networks in order to provide high-speed services, Carothers says.

"Operators can use unlicensed spectrum to gap-fill areas where they do not have spectrum," he says. "Carriers cannot get complete broadband coverage, and because they need the capability to have a robust technology, they will have to gap-fill."

U S West recently expressed interest in the unlicensed frequency to provide high-speed data in certain segments of its territory.

Interest from a large carrier such as U S West may serve to provide further credibility to the spectrum, says John Skoro, senior vice president of sales and market development for Adaptive Broadband. "If U S West believes it can do it, then there must be substance in it," he says.

Smaller operators or ISPs also need spectrum, not to fill in gaps but to get up and running as quickly as possible to have a chance to compete. One such carrier, BroadLink Communications, purchased $20 million of BreezeCom wireless access equipment to provide wireless network connectivity and services to its customers.

The carrier's carrier makes its money enabling ISPs to offer cost-competitive wireless services to customers underserviced by their existing network providers. BroadLink, which currently operates networks in the 2.4 GHz frequency, can provide companies with deployment 10 days from the date of their service order.

BroadLink can make this promise because vendors such as BreezeCom offer technology solutions in the 2.4 GHz ISM band and in the licensed 3.5 GHz and MMDS frequencies. The vendor's technology uses wireless packet-switching technology and statistical multiplexing, which can maximize the number of subscribers per cell.

While BreezeCom's systems support cellular-like topology in which there are multiple sectors per cell, it also relies on frequency hopping for improved multipath and interference resistance, says Bernard Herscovich, president of BreezeCom.

In addition, the vendor provides a radio technology that delivers wireless connectivity over large coverage areas in which subscribers can be located up to 9 miles from the base station.

"There are hundreds of ISPs that do not have a cable plant and cannot use DSL nor do they have licensed spectrum," Herscovich says. "They have a need to migrate their customer base from low speed to broadband."

Herscovich likens the unlicensed bands to the Internet because they are both best-effort technologies. "There is [little] legacy in both the Internet and the unlicensed frequency so the number of rules is not enormous, which is great for entrepreneurs," he says. BreezeCom's unlicensed Internet Access solution, which is based on IP, is a good match for the migration of the Internet from narrowband to high-speed, he adds.

Although unlicensed technology can work with licensed technology, it must be the same in terms of the core technology. That means that if IP is at the core in one of the technology solutions, then it must be in the other for the two frequencies to work together, Adaptive Broadband's Carothers adds.

Free, but not perfect

Although companies such as BreezeCom have found the ISM bands to be sufficient for what they wanted to offer - whether in-building applications or wireless LAN applications - using ISM might not be the best way to push service offerings to customers.

"It is not wise to build a service offering in this band," says Hatim Zaghloul, chairman and CEO of Wi-Lan. "It is not a band to build a service in. Operators would not be able to promise throughput." Because of this belief, the vendor has established a solution for both the ISM and the U-NII bands.

The company's Hopper Plus wireless Ethernet bridge, which operates in either the ISM 2.4 to 2.5835 GHz bands or the 3.6 to 3.9 GHz licensed band, relies on direct sequence spread spectrum radio technology.

The bridges are used in nearly any line-of-sight environment to replace, extend or connect wired Ethernet networks. Therefore, bridges are often used where wires are unavailable or too costly to install or maintain.

The vendor also maintains that the technology performs consistently at 80% to 85% peak efficiency because of what it calls the dynamic time allocation technique. This technique provides variable time slots to busy stations when needed, avoiding the tendency to waste bandwidth by allocating time to stations that are less active.

And regardless of the progress made in the unlicensed spectrum space, skeptics will remain.

Vyyo, which works with ADC Telecommunications to provide MMDS equipment, is not a proponent of the unlicensed space.

"Using unlicensed frequencies is a limited market," says Arnon Kohavi, senior vice president of strategic relations for Vyyo. "A carrier cannot deploy a nationwide network with unlicensed frequency because it is on a first come, first served basis, and a single carrier likely couldn't secure the spectrum on a nationwide basis."

Unlicensed to compete

When the FCC opened the unlicensed frequency band three years ago, it surmised that companies would have to coordinate how they would use the frequency. Therefore, any users of the spectrum would have to ensure that there would be no interference and that they could keep their businesses and systems running, even if there were others operating in the space.

"Everyone has thought of unlicensed spectrum as cowboy land," Carothers says. "But the benefit is [that] carriers can get it out and go to market today."

That's the biggest competitive edge the spectrum has going for it. While many providers have spent big bucks and a lot of time waiting out spectrum auctions, the unlicensed frequencies have been there for the taking, ready to help providers roll out service immediately.

"There is a big difference in time to market between unlicensed and licensed spectrum," Carothers says. "This is a gold rush because [companies] can out-compete others by getting their services out there now. The key advantage for our customers to use our technology is that they beat the competition to it."

According to a study conducted by Adaptive Broadband, the unlicensed space is worth about $100 billion, making it a big market with huge demand.

The vendor is not the only one with predictions about the spectrum. The Strategis Group forecasts the service revenues via the unlicensed band to shoot from $17.26 million in 2000 to $419.6 million in 2003 (Figure 2).

Growth numbers might be positive and the potential of the spectrum great; however, those operating within the frequencies do not lose sight of the challenges.

"The nice thing about licensed spectrum is you own it," says Graham Barnes, chief technology officer of NextWeb, a service provider offering video applications in the unlicensed space. "It's like having the ability to print money - it's a tangible asset. [With unlicensed] it is harder to get people to invest in you."

Before helping to head up NextWeb, Barnes worked for Western Multiplex, where he worked extensively on pioneering the ISM band for wireless. In the late 1980s, when ISM was opened to the public, big users included cellular and PCS carriers that wanted to link their base stations. Once bandwidth demands rose significantly, the band became less desirable, with fiber becoming the main choice for backhaul, and U-NII being used for access because the focus was shifting to high-bandwidth video applications.

NextWeb, which works with Adaptive Broadband, currently is focused on the business market, but the provider plans to target the residential market during the weekends and evenings to offset the times when enterprises are eating up bandwidth, selling them rates competitive with DSL offerings.

When other providers might be focusing on smaller niches, NextWeb has chosen to remain in the big cities offering big applications.

"The bottom line is when you have a broadband service, the challenge is convincing users to sign up. When it comes to voice, it is hard to make a compelling argument for consumers to switch," Barnes says. "When it comes to video, it is a broadband hog and can be the driving basis for consumers to make the transition to a broadband connection."

While Barnes believes there is nothing comparable to video in terms of wowing the customer, he maintains that the jury is still out regarding the overall uptake of the service. Because the U-NII band does not require spread spectrum, there is extra bandwidth and the ability to get higher data rate s, he says.

Compared to operators in the LMDS space, for instance, companies such as NextWeb also benefit from lower investment costs and equipment costs.

"We can offer good prices while also [having the capital] to invest in other types of services and not just being a replacement for the copper line," Barnes says.

The waters deepen

The broadband wireless space is beginning to bust at the seams with upstart vendors and service providers. It looks to be no different for those deciding to work with unlicensed spectrum.

Barnes predicts that others will jump into the market, but they will come at it from two different directions.

Because the manufacturer side is a bit fragmented, with large players such as Cisco Systems just coming into the unlicensed space (see sidebar on page 64), there will be an opportunity for consolidation in the market, Barnes says. This will not stop the entrance of new players wanting a piece of the manufacturing segment. While this will be exciting for providers because there will be choices, it also will create an additional challenge when it comes to building out their networks.

"Once a system is up and running with one vendor, there is a strong incentive to stick with it," Barnes says.

Whatever direction the unlicensed space takes, those offering solutions to service providers or those selling the fruits of that technology to businesses and consumers have hit the jackpot - in a way. By saving money on the spectrum that will allow them to push high-speed access and some applications on to their customers, they have the resources to invest in whatever the future throws them down the line.

And for bigger carriers such as U S West, the unlicensed spectrum gives them the ingredient they need to keep on growing.

The broadband wireless sector is becoming more like a playground during recess where hordes of kids race to get to the cool stuff.

The kids in this case - broadband wireless providers - all have the same goal: to provide high-speed access and the applications that will make plain access worth it. In the unlicensed frequency, some providers are establishing their own edge in terms of high-speed applications.

Several years ago, Cisco Systems started offering providers technology solutions for operating in the unlicensed space. While the company works with operators on how to operate in the ISM and U-NII bands, it has surmised that access is just a piece of the broadband wireless puzzle.

"Access technology is only part of the solution, along with [the focus on] what services can be turned on and how quickly," says Troy Trenchard, director of marketing for Cisco's wireless access group.

Offering services via unlicensed frequency can be more of a challenge because carriers are not certain how much of it they can use and whether there will be a lot of interference, depending on the number of providers operating in a particular band. For this reason, some have turned to IP to help circumvent the issue.

NextWeb, a player since February 1999, has had a lot of success with offering video services. The provider has been working with FVC.Com to offer its Click-to-Meet video services, an IP-based videoconferencing service aimed at business customers throughout northern California.

Initial applications will include telecommuting and virtual meetings as well as direct broadband Internet access and virtual private networking (VPN) services. Although NextWeb operates in the unlicensed spectrum, between 5.3 and 5.8 GHz, the spectrum is capable of reliable wireless connections, says Chief Technology Officer Graham Barnes. "It all depends on how the product is built and how a carrier designs the network," he says.

Through its agreement with FVC.Com, NextWeb will be able to deliver TV-quality, two-way video calls and conferences via wireless connections at speeds up to 20 Mb/s. The applications will go over the broadband Internet and directly to customers' desktops, allowingthem to point-and-click to make a video call just as they would surf the Web.

The main benefit of this service is that it is a collaborative tool, Barnes says. When a company has a remote location, virtual interaction would allow both parties to view the same PowerPoint presentation or other documents without having people fly between different locations. Another service the provider is dabbling in includes VPNs.

Operating in the U-NII band allows NextWeb to offer savings to its business customers. "We offer good prices and also are able to invest in other types of services and not just be a replacement for the copper line," Barnes says.

4G Network Technologies is another operator taking advantage of the U-NII band to offer high-speed applications. The company's long-term plan is to provide streaming media, video-on-demand and bidirectional media with voice capability and roaming.

"The future we will create is so people can have personal digital assistants - cell phone-sized devices that all will have high-speed connections to the Internet on a fully mobile basis," says Phillip Barber, 4G Network's founder and CEO.

Currently, the operator's solutions include multipoint fixed wireless and wireless LAN systems for in-building and campus environments. But in the near future, it anticipates offering portable wireless transceiver modems that give subscribers access to a broadband connection wherever they go, Barber says. The company already targets the top 60 U.S. markets for deployment and intends to gain a footprint that covers about 65% of the points of presence in 48 states.