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Enterprises prepare for fixed wireless broadband

Emerging fixed wireless services are getting faster and cheaper, providing some businesses with a new alternative to T1 lines. Experts say once WiMax-based products emerge next year, the market will grow by leaps and bounds.

While most of the buzz surrounding wireless networking has been reserved for Wi-Fi, another kind of wireless technology has been lurking in the shadows for decades. It's reliable, inexpensive and likely heading to a city near you.

Broadly known as fixed wireless, this technology provides throughput speeds that often exceed those of T1 lines over a range of about 30 miles. It isn't likely to compete with 3G or even Wi-Fi, but with its bargain prices and high reliability, it may soon become your T1 provider's worst nightmare.

Low cost, high revenue

Today, the fixed wireless industry is a paltry $450 million market, according to Oyster Bay, N.Y.-based ABI Research. However, thanks to emerging standards and proliferating services, it is quickly becoming a broadband connectivity option for many U.S. businesses.

Edward Rerisi, ABI's vice president of research, said that market for non-standardized fixed wireless services will reach $1.1 billion in revenue in 2009. Next year, fixed wireless technology based on the 802.16 standard, also known as WiMax, is expected to hit the market. And Rerisi expects the market for standardized WiMax products to grow from zero revenue today to a $1.2 billion market in 2009.

Part of the appeal of fixed wireless is its low cost. A T1 usually costs between $700 and $900 per month. Jeff Thompson, president and chief operating officer of TowerStream Corp., a Middletown, R.I.-based fixed wireless provider, said that he charges $500 a month for a comparable 1.5 Mbps link.

Businesses should start considering fixed wireless services if they are available in their area, said Craig Mathias, a principal in the Framingham, Mass.-based Farpoint Group.

"It's a perfectly valid technology," Mathias said. "And with connectivity becoming a commodity, businesses can do that kind of pure cost analysis."

Fast service, faster deployment

Initially, it was not cost, but speed of deployment that drew Avalon Books, a unit of Thomas Bouregy & Co. Inc., to fixed wireless. The publisher, based in Emeryville, Calif., was moving its New York City office and its T1 provider was slow in getting its new service in place, said Jordan Friedman, systems administrator with Avalon.

Avalon turned to TowerStream, which provides fixed wireless services in major cities in the Northeast and Chicago. TowerStream had the company connected in a matter of days.

Avalon now pays $500 a month for a 1.5 Mbps wide area network connection, a savings of $300 over what it once paid for a T1 link, Friedman said.

On top of the cost savings, the wireless link is much more reliable. The company's T1 line went out several times, Friedman said, thanks to construction that tore up the cables. With fixed wireless, he said, the service has been of a higher quality. Avalon also now has a service level agreement with TowerStream, which he didn't have with his previous Internet service provider. Now he is guaranteed less than a 20-millisecond delay.

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Read our exclusive interview with the president of the WiMax Forum.

"This has been outstanding, I cannot praise it enough," Friedman said.

Less than perfect

While some customers are happy with the technology, it is not without its problems.

Fixed wireless is often used in unlicensed spectrum, which means that there is no legal mechanism to stop unintentional interference, said Michael Disabato, vice president and service director with the Midvale, Utah-based Burton Group.

All that's required for an implementation is the installation of a small dish on a company's building, and aligning it with a nearby transmission tower. However, Disabato said tall buildings in cities such as New York can mean spotty coverage not only because of obstructions, but also because it's challenging to ensure coverage on the lowest and highest floors of skyscrapers.

Security is an issue, but no more so than with any other means of connectivity, Mathias said. He recommends that businesses use a VPN to ensure that their data is not compromised.

Disabato also cautioned enterprises about investing in a fixed wireless connection before WiMax-based products hit the market next year. That's when products and services will be more widely available, and prices will come down.

Even if carriers resist the technology, Disabato said they are in no position to block it because there are several brokers willing to lease radio tower space to potential WiMax-based service providers.

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