Irrational exuberance?

While admitting there are obstacles — market conditions, standardized products and spectrum reallocation, for starters — the broadband fixed-wireless industry was surprisingly upbeat at the annual Wireless Communications Association convention in Boston last week.

Most of the buoyancy was based on the avowed support of three deep-pocketed providers — Sprint, WorldCom and AT&T — that stood up as wireless believers.

“Our industry is uniquely positioned to compete,” said Michael Keith, president and CEO of AT&T Fixed Wireless Services, who outlined an aggressive plan to build networks in at least nine cities that will serve 100,000 subscribers by the end of this year. “There can only be three technologies [including cable and telephone], and we're the third technology.”

Keith's counterpart, Kerry McKelvey, president and CEO of WorldCom Broadband Solutions, agreed.

“We have a broadband service that people want out in the marketplace,” he said. “This is a growth industry. It really has not slowed down or impacted any of our plans going forward.”

Optimism aside, the foreheads of the record 2625 conference attendees displayed creases resulting from several worries, most notably an economy Winstar Communications Chairman and CEO William Rouhana labeled “a depression in the telecom/Internet space.”

Rouhana would know. Winstar, with bright prospects going into 2000, is now in Chapter 11 bankruptcy, struggling to survive as a point-to-point fixed wireless service provider to commercial customers.

‘This is a growth industry. It really has not slowed down or impacted any of our plans going forward.’
— Kerry McKelvey, WorldCom

“For seven years [Winstar's business plan], was right on track,” Rouhana said. This year, “incredible schizophrenia has taken hold” in the marketplace.

There is “a robust amount of demand…. What there isn't is the capital,” he said.

It's a momentary setback, said Jay Bhagat, chairman and CEO of AirLAN. “Demand is out there,” he said. “I think it's going to turn around.

But it may be too late to regain the market's confidence in fixed wireless as a viable alternative, Rouhana said.

“For quite some time, people will feel very burned by the risks they took, even though they took them willingly,” he said. “There wasn't enough discretion in what was financed and what wasn't.”

If the industry can beat its money problem, another looms: The vendor community is fragmented, and no standard technology has evolved to reduce equipment costs. Second-generation technology — expected to overcome line-of-sight issues — needs standardization, Keith said.

“It is a key aspect of this industry that the operators work together and set standards,” he said.

Sprint, which has been proceeding with first-generation deployments and is now preparing for second generation, isn't as concerned, said Jay Keithley, Sprint's vice president of federal regulatory affairs.

“We don't need standards to roll out second-generation, fixed-wireless broadband technology,” Keithley said.

But vendors are needed. With standards concerns, the cloud of 3G spectrum reallocation into fixed-wireless bandwidth and the slumping financial market, WorldCom's McKelvey expressed concern that vendors are removing fixed wireless from their product-development plans as the focus on core businesses.

“To keep the industry healthy, we need as many vendors as possible,” he said.

Despite these concerns, the show's speakers and attendees were upbeat.

Thomas Sugrue, chief of the FCC's Wireless Telecommunications Bureau, echoed sentiments of most attendees when he said, “I'm still bullish on the wireless broadband industry.”

That bullishness is based on the technology's capability to deliver broadband data to users who cannot be reached by cable and telephone wires, Sugrue said.