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Miles-Wide 'WiMax' Wireless Internet Service Planned across Chicago

Posted on: Monday, 12 April 2004, 06:00 CDT

Apr. 13--A wireless Internet connection that stretches for miles could start the next wave of high-speed offerings.

A small Rhode Island firm's plan to offer totally wireless high-speed access in Chicago will compete with wired service through phone lines or cable TV. The through-the-air connection, known as WiMax, can reach up to 10 miles and complements popular short-range Wi-Fi wireless services at home or in the office.

Initially geared for business customers, TowerStream Corp. has installed antennas atop the Aon Center in Chicago to beam its signal to area customers.

The company serves about 600 business customers in New York, Boston and other Eastern cities with wireless broadband.

"We make wires obsolete," said Philip Urso, TowerStream's chief executive. "We really drove home that point in Boston when we won the Boston Housing Authority account. Once they turned us on, the copper phone lines into their buildings just went dead."

TowerStream is not the first company offering wireless broadband connectivity. Telecom titans, including AT&T Corp. and Sprint Corp., have spent billions setting up wireless networks to send high-speed service, only to fail.

But this time, experts say the technology is ready for prime time and tiny TowerStream may succeed where giants stumbled.

Jeff Thompson, the firm's chief operating officer, said TowerStream's effort is different because it uses a new generation of less expensive equipment that performs better. And when more WiMax components become available next year, costs are likely to fall and performance will improve, he said.

Several years ago, AT&T announced an experimental fixed wireless effort called Project Angel. It did not perform well enough in tests to go commercial.

More recently Sprint launched a high-speed wireless Internet service in Chicago and other cities. The service still operates, but it stopped recruiting new customers because it was losing money.

Chicago investment bank Incapital LLC has used TowerStream's wireless service since February.

Having a dependable broadband connection is essential to Incapital's business, said Joe Rickard, chief technology officer. The Loop-based firm has been worried since rains flooded the basement of its building a few years ago, washing out its communications lines.

The wireless service works as expected, Rickard said. If that continues, Incapital will probably drop one of its two wired Internet connections and increase the amount of bandwidth he buys from TowerStream.

"The cost is competitive," Rickard said, "but that's not something we even care about. We were looking for an alternative to assure business continuity."

Incapital uses its TowerStream connection for data communications only, but the firm could add Internet telephony and may do so in the future, Rickard said.

TowerStream is looking around Chicago for other tall buildings to mount antennas, Thompson said.

"Our system works like a cell phone network," he said. "Eventually, we'll have a several transmission towers to cover the entire Chicago region."

As that happens, TowerStream will lower prices and eventually offer service to residential customers in competition with cable modem and DSL Internet service.

The firm currently charges $500 a month for up to 5 megabits per second of data. That is competitive with phone company prices for T1 lines to businesses.

For home users, Comcast Corp. recently increased its data rate to 3 million bits per second, up from 1.5 megabits, at no extra cost. SBC Corp. also offers speeds of up to 3 megabits in one of its tiered pricing structures. Both cable and DSL services cost less than $50 a month.

TowerStream is a member of the WiMax Forum, an industry group backing the new technology, which is capable of delivering broadband service wirelessly about 10 miles. WiMax technology will conform to a new standard from the Institute of Electrical and Electronic Engineers that goes under the catchy name of 802.16.

WiMax hopes to follow in the footsteps of Wi-Fi, the remarkably successful wireless Internet technology that operates best at distances of less than 300 feet.

TowerStream's service is considered pre-WiMax because actual WiMax products won't be certified and marketed until next year. That's when a cycle of lower prices and better performance is expected to start.

The success of Wi-Fi as a short distance wireless technology illustrates how standardization leads to lower costs and broader sales, said Roger Marks, chairman of the IEEE committee for the 802.16 standard.

"A standard takes a lot of risk out of the system for an operator," he said. "Without a standard when you pick a vendor, you're not sure if he'll stay in business. With a standard, you know that several vendors are making the devices you need."

WiMax will be complementary to Wi-Fi and will lead to lower prices for all forms of broadband, predicts Marty Singer, chief executive of Chicago-based PC-Tel Inc., a firm that produces software for wireless broadband.

"WiMax will bring down the cost of broadband--wired or wireless--to the home," said Singer. "DSL will have to cut prices to compete. We think that WiMax will lead to increased demand for Wi-Fi within the home.

"It'll lead to a broadband explosion."

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(c) 2004, Chicago Tribune. Distributed by Knight Ridder/Tribune Business News.

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