New names, new market, new risks

Digital Wireless becomes Cirronet as it launches into the unlicensed spectrum market

After more than a decade of providing wireless sub-systems to everything from Hollywood production houses to nuclear power plants, Digital Wireless last week nearly completed its transformation into a telecom vendor, announcing a name change and the commercial deployment of a high-speed wireless data solution aimed at residential and small business users.

The newly christened Cirronet will focus on providing ISPs with an inexpensive high-speed platform using the unlicensed 2.4 GHz ISM band. While the company is in trials with about 40 providers worldwide, it has announced two confirmed ISP customers: MicroNet, based in India, and e-World, based in Hong Kong. In the U.S., Cirronet targets providers looking to break into the second- and third-tier market.

Key to the company's approach is price. Cirronet claims it can deploy its WaveBolt system for about $350 per subscriber, including installation charges. Current high-speed fixed wireless platforms, particularly those in the multichannel multipoint distribution service and local multipoint distribution service (LMDS) bands, are significantly more expensive and require longer-term paybacks than ISPs want, said Robert Gemmell, CEO and chairman of Cirronet.

"They haven't hit the cost point yet where they could deploy to the mass market," he said. "There have been some deployments based on longer than one-year paybacks, but it's been by big companies."

On the user side, Gemmell sees $25 per month, not the current $40 to $45 per month, as the price at which high-speed data access will take off in the mass market.

Of course, part of the cost reduction in Cirronet's product comes from using unlicensed spectrum, which has been open for some time but remains relatively unused because of concerns over potential interference in an unregulated band. To quell those fears, WaveBolt uses a frequency-hopping, spread-spectrum technology that avoids conflicts with other devices.

Initially, Cirronet anticipates the most interest from foreign ISPs, which are facing pent-up demand and little wired infrastructure.

A recent Jupiter study cited by the company declares by 2005 that Internet users in North America will comprise about 27% of all users, while Asia-Pacific users will comprise 30% of the total.

In one potential configuration, an ISP could use WaveBolt to provide high-speed access to a single multi-tenant building, bypassing wired infrastructure builds that can be cost-prohibitive in metro markets.

A handful of U.S. companies are trying to take advantage of unlicensed spectrum. Fuzion Wireless Communications, which mainly uses the 5.1 GHz, or UNI, band, sees no problems with unlicensed frequency.

"That strategy was built on not trying to absorb the debt of the LMDS players," said Dave Frank, president and chief operating officer of Fuzion. "It was basically having a more efficient network and roll into profitability faster." Not everyone is sold on the use of unlicensed frequency, whether it's in the 2.4 GHz band or the higher capacity 5.1 GHz range.

"There is no such thing as a free lunch," said Hamid Akhavan, chief technology officer of Teligent, noting that one of the biggest problems is management interference as usage of the band goes up.

Unlicensed spectrum also is too unrestricted for a company such as Teligent that is selling links with guaranteed quality-of-service levels.

"You'll see things like garage door openers in those bands," Akhavan said. "You'll see a lot of interfering sources. You can't engineer around them because you don't own them. No matter what technique you use, you're going to have congestion in the bands. They're governed by the laws of physics."

The article "X Marks the Spot" (Jan. 15, page 70) should have said that Tut Systems' IntelliPOP product is based on Ethernet over ATM over VDSL. In addition, the table that accompanies the article should have listed BRE as a customer and electricstreets.com and Teledex as partners. Allied Riser is not a Tut Systems customer.

The article "Can you say FTTN?" (Jan. 22, page 50) should have stated that Next Level, not Nextel, supplies VDSL equipment to Qwest and others that use the technology. Telephony regrets the errors.