UNFIXING FIXED WIRELESS
MARCH 13TH 2003
The Economist
New wireless technologies for delivering broadband to the home are
about to challenge DSL and cable
WIRELESS means mobile--or so many believe. Whether it is the fuss over
third-generation (3G) mobile phones and multimedia on the move, or the
unexpected success of Wi-Fi hotspots that give laptop users fast
internet access without having to plug into a telephone socket, people
think of "wireless services" as something to use while away from the
home or the office. But another type of wireless technology may be even
more important. Known as "wireless local loop" (WLL), it could reignite
the consumer broadband market.
The telecoms boom left a glut of fibre-optic cable along trunk routes,
but this links directly only to the largest customers. Homes and small
offices that want high-speed internet access usually subscribe to
either a digital subscriber line (DSL) or a cable-television service.
Both are far from ideal: the phone wires used by DSL and the television
cables tend to be owned by monopolies, and neither was designed for
surfing the web. Retrofitting a 1950s telephone line for broadband
takes a lot of work, making cheap DSL hard to supply profitably.
In principle, WLL has no such drawbacks. Indeed, many see it as an
ideal solution to the local access problem. Radio waves already reach
everybody's home or office. So there is no need to dig up streets or
shoehorn data into a system designed for voice. Of course, most WLL
systems require their own dedicated radio frequencies, but regulators
have been fairly generous with these--selling enough licences to
competing WLL operators at a fraction of the prices paid by
mobile-phone operators. Some can even use the same free, unlicensed
frequencies in the 2.4 and 5 gigahertz bands as Wi-Fi, opening up the
market to anyone.
At least, that is what WLL proponents say. In the real world, wireless
has so far lagged behind both cable and DSL. The problem is that, until
now, most WLL systems were fixed and required a clear line of sight
from the customer's building to the service provider's base-station.
Like satellite dishes, they had to be aligned by expert technicians,
and could be knocked off target by snowstorms or wind. Unlike satellite
dishes, their reception was easily disrupted by events on the ground.
People who had a system installed in winter often found that it stopped
working in spring, as trees sprouted leaves that blocked the terminal's
view of the base-station.
The latest WLL technology could change this. Unlike its predecessors,
it does not require a line of sight, or outdoor installation. San
Francisco-based Soma Networks, for example, has developed a terminal
that can be placed almost anywhere in a customer's building. Like a
mobile phone, it can even be carried around and used from other points
within radio range of a service provider's base-station. The terminal
is little bigger than a video cassette but has to be plugged into an
electric outlet. This is not particularly convenient, but portability
is not its main selling-point.
Rather than the ability to move around, service providers are
attracted to the new WLL's "self-provisioning" feature. Users can
simply buy Soma's terminal in a store and plug it into their PC and
telephone as soon as they get home, without needing to call out a
technician. This is cheaper for the provider, and more convenient for
the customer. The first time the terminal is switched on, it directs
web surfers to a portal where they enter their billing information and
choose which voice or data package they want.
The device is capable of transmitting or receiving at up to 12
megabits per second--about ten times faster than most DSL connections
and more than 200 times faster than a dial-up system. This way,
customers can upgrade to a faster service at the click of a mouse. As
more customers sign up, service providers simply add more base-stations
because all can use the same frequency without causing interference.
Previous WLL systems required adjacent cells to use different
frequencies, making it hard to increase network capacity with demand.
Exactly what service packages will be on offer is up to the network
operator, but most WLL manufacturers envisage pricing based on service
guarantees and peak speed, not volume of data or time spent online. The
network is able to prioritise traffic, ensuring that guarantees are
honoured during busy periods. Even more importantly, it means that
lucrative voice traffic--the service from which telephone companies
still make most of their money--can be given priority over data. Rather
like text messaging on a mobile phone, data travel over spare network
capacity not used by telephone calls.
The similarity to mobile phones is not coincidental. Soma based its
hardware around UMTS (Universal Mobile Telecommunications System), the
3G technology that is slowly becoming available in Europe and Japan.
Entering a market dominated by the likes of Nokia and Ericsson may seem
ambitious, particularly when that market's size and even existence are
doubted by many analysts. But Soma is not really trying to beat the
mobile-phone firms at their own game. The company has left out the
parts of UMTS that deal with "hand-off", the complex process that lets
users move between cells without dropping calls, and it does not have
to worry about miniaturisation or battery life.
Other companies have had the same idea, although most have focused on
different applications. Another Silicon Valley start-up, IPWireless,
has also cherry-picked the UMTS standard, while Texas-based Navini
Networks has its own closely related technology. Both of these are
aiming for true mobility, retaining the hand-off circuitry and trying
to make terminals as small as possible. (They are currently about the
size of a videotape, but both firms claim that cards which can fit
inside a laptop are coming soon.) In the process, however, they have
sacrificed telephony and focused solely on data-only systems.
Not every WLL company is adapting 3G technology. Flarion Technologies,
a start-up firm backed by Cisco Systems, among others, has an approach
based on OFDM (orthogonal frequency division multiplexing), the
technology used in the fastest types of Wi-Fi and some
digital-television systems. OFDM can reach even higher data speeds than
3G, by splitting a high-speed signal into several lower-speed
transmissions and sending each via a different path. Flarion's system
should provide a similar user experience to Wi-Fi, but covering a whole
city rather than only a few hotspots. Like IPWireless and Navini,
Flarion lacks genuine telephony support, gambling that internet
services will be more important in the long term.
They could be right. It is already possible to make phone calls
through all three systems using VOIP (voice over internet protocol), a
technique that carries calls across the internet or other networks
based on the same architecture. VOIP requires special phones, and most
people think it still sounds inferior to normal telephony, but it is
improving all the time. Flarion hopes that its technology will
eventually be embedded inside VOIP cell phones, though for the moment
it is concentrating on cards for laptops.
How long it will be before you can use this technology depends on
where you live. America's three big long-distance carriers--AT&T,
Sprint and WorldCom--all have WLL spectrum licences. To date, only
WorldCom has selected a system, but its roll-out has been delayed by
its bankruptcy filing. Soma, IPWireless, Navini and Flarion have also
shipped systems to smaller service providers in America and to larger
carriers in Japan and South Korea. All agree