The great wireless north: C block company launches in land of opportunity

Personal communication services entity WirelessNorth is demonstrating how rural teamwork and a dose of natural disaster can help spell success in the entrepreneurial PCS game.

The company recently turned up code division multiple access (CDMA) networks in C block license areas in Fargo, N.D., and Moorhead, Minn., and plans to rapidly expand its footprint into surrounding areas (see map).

WirelessNorth itself is a management company owned by several Independent rural telcos and utility companies in Minnesota, North and South Dakota, Wisconsin and Iowa that together acquired C block licenses throughout the region.

The C block is still plagued by financial trouble and marked by underachievement. All the license holders that have launched in the spectrum to date have boasted either very focused regional business plans, solid backing from atypical sources or a combination of the two.

WirelessNorth meets both requirements, but they also have the dubious distinction of coming to market in a recently flood-ravaged region that is hungry for reliable sources of communication.

Bringing its concept of new, high-quality wireless service to an area still cleaning up after the Red River Valley flood meant that WirelessNorth was able to acquire real estate and zoning approval without battling the "not-in-my-backyard" mentality.

"We didn't run into a single NIMBY," said Rick Rappe, president and chief executive officer of WirelessNorth.

Flooding was not the only blessing in disguise that WirelessNorth found in its regions. Most CDMA providers have difficulty with signal propagation, particularly in hilly or crowded urban areas, but the terrain where WirelessNorth built its networks was different.

"We ran into the opposite problems of what you hear about," Rappe said. "Because it's so flat, we were getting a CDMA signal 20 to 27 miles away. Our propagation issues were in turning down the signal rather than turning it up."

With its initial launches, WirelessNorth joins an elite group of C block license holders that have been able to get their business formed and their networks deployed. The Federal Communications Commission recently issued a relief plan to help expand that group beyond the elite-a plan WirelessNorth believes is too neutral but has little effect on its business beyond some financing issues.

"They did an excellent job of coming up with a way of not pleasing anybody," Rappe said. "It has had a ripple effect on us to the extent that our funding agreements ended up being tighter and having more protection for the lender than they otherwise may have."

Despite its lead in the C block, WirelessNorth is bringing service to market in regions populated-or soon to be-by some of the wireless industry's heaviest hitters. The company has a roaming edge in its ability to lure traveling CDMA customers onto its networks and has already forged a roaming deal with Sprint PCS. As for market distinction, WirelessNorth plans to do everything technologically feasible to distinguish its service on quality, coverage and customer service, but ultimately the battle with other carriers will likely be fought on price.

"If you have to sell your product based on price, you've already lost," said Dan Richards, vice president of sales and marketing at WirelessNorth. "But we still have to have a price advantage."