First Avenue launches spectrum leasing

First Avenue Networks, the firm that emerged from the ashes of bankrupt fixed wireless carrier Advanced Radio Telecom, has launched a spectrum-leasing program to put the old ART spectrum portfolio to new strategic use by other carriers for backhaul and other applications.

The Charlottesville, Va., company possesses 750 licenses for the 39 Ghz spectrum block, making its holding among the largest in the country for that spectrum. Previously, those spectrum rights only could be used for First Avenue Networks itself to provide service, per spectrum auction rules set by the Federal Communications Commission. However, earlier this year, the FCC changed its rules to allow third-party spectrum leasing.

First Avenue Network’s new products are ExpressLink and Express Net. ExpressLink enables carriers and enterprise customers to lease spectrum on a single-link basis at $500 per link, per year, in a pay-as-you-deploy model, making it a likely solution for customers that need to deploy up to about 10 links. Express Net provides exclusive use of up to 100 MHz of spectrum in a specific geographic area. It can be tailored to meet a carrier’s coverage and bandwidth requirements over a large area.

Dean Johnson, CEO of First Avenue Networks, said the company was developing a business model based on spectrum leasing before the FCC changed its rules, but added that the regulatory action "tremendously reduced the transaction costs for leasing, and lowered the barriers to entry." Johnson commands a low-overhead three-person staff at First Avenue Networks, which acquired ART’s spectrum out of bankruptcy.

"Broadband wireless firms used to view the business as ‘wireless or nothing at all,’" Johnson said. "But wireless is an important choice among several choices carriers have for backhaul. Past spectrum holders were pursuing their vision of the market, but we’re pursuing our customers’ vision. We want to be part of the value chain."

IDT, which owns the former Winstar spectrum, also wants to be part of the value chain. The company said earlier this summer that it planned to have a spectrum-leasing program, in addition to using its licenses as a direct service provider. Potentially, First Avenue Networks could still use its spectrum to offer service directly to end users, possibly competing with its own leasing clients, but Johnson said, "I don’t see that happening."

First Avenue Networks is eyeing mobile traffic backhaul as its primary opportunity, but also sees telcos, wireless ISPs and "last mile" enterprise connections as revenue generators. The firm will reach carriers and WISPs through partnerships with their vendors and systems integrators, said Evans Mullin, vice president of business development at First Avenue Networks.

"We’ve been chasing the WISPs for about 18 months now and have been getting to know their systems integrators," Mullin said.

Mullin formerly was vice president of operations at Winstar. Johnson may be best known as co-founder of MuseumCompany.com, but he also founded and ran American Quality Cable in Charlottesville, where he developed broadband wireless as a distribution medium. First Avenue Network’s third employee is Sandra Watson, chief financial officer, who also was a co-founder of MuseumCompany.com.

First Avenue Networks has a rich array of assets to leverage in leasing. It averages 350 Mhz of spectrum in the top 50 markets in the U.S., and its footprint includes about 950 million channel POPs. Each 39 GHz spectrum channel it leases has 100 Mhz available and can carry up to OC-12 (622 Mbps).