News for the Hospitality Executive
|By Hiawatha Bray, The Boston Globe
Knight Ridder/Tribune Business News
Apr. 12, 2004 - --On a May morning last year, a Big Dig backhoe zigged when it should have zagged, and ripped up a piece of communications cable. Just like that, dozens of Boston companies lost their Internet access.
For Centra Software Inc. of Lexington, the cable cut threatened disaster. About 600 Centra customers and employees from around the world had arrived that morning at the Westin Hotel in Copley Place for a conference featuring Centra's Internet-based collaboration software. No Internet could mean no conference. "Of course, our executive team was freaking out," said Centra spokeswoman Ellen Slaby.
It took all day to fix the phone cable. But Centra was back on line in two hours. They'd concocted a broadband Internet link out of thin air, thanks to TowerStream Corp. of Waltham, and the company's WiMax wireless data service.
This isn't WiFi--the short-range wireless networking system that lets people surf the Web on their laptops at the local Starbucks. WiMax is a long-range system that can deliver massive amounts of bandwidth--up to 70 megabits per second--over long distances--up to 30 miles. Add voice-over-Internet gear, and some of this bandwidth can be used to carry standard telephone calls. Bolt a WiMax antenna to an office building, and you've got a heavy-duty communications link that can supplement--or entirely replace--traditional telephone and Internet hookups.
"It's a better way to deliver broadband," said TowerStream founder and president Jeff Thompson, who's set up WiMax services in New York and Chicago as well as Boston.
There's nothing new about the idea of delivering broadband by radio instead of cable. In the late '90s, companies like the long-distance phone carrier Sprint began offering such services to residential customers. But Lindsay Schroth, senior broadband analyst at Boston's Yankee Group, says the business went nowhere. These early systems required that the two antennas point directly at each other, making it impossible to use them in many places. Also, the equipment required costly installation.
Perhaps worst of all, the various wireless broadband providers didn't have a single standard technology. When there's a standard, electronics firms can mass-produce the needed components, so prices fall. The lack of a standard meant that early broadband wireless gear was just too expensive.
"Basically, those business models failed," said Schroth. "A lot of people said ... broadband wireless is dead."
Not quite. Since 1999, electronics firms have worked with the Institute of Electrical and Electronic Engineers, which created the WiFi standard. The IEEE group has rolled out a series of standards for wireless broadband under the generic name WiMax. Standardization isn't complete yet, but it's far enough along to let companies like TowerStream deploy a preliminary version of WiMax technology to hundreds of customers. "They try it, they love it," Thompson said.
TowerStream can deliver a 1.5 megabit-per-second Internet "pipe" for $500 a month, compared to $370 for a 1.5-megabit connection from local telephone company Verizon Communications. But in New York and Chicago, TowerStream offers 5 megabits for $500 and will soon introduce this higher-speed service to Boston at the same price.
Because it's a wireless technology, TowerStream can hook up its customers in hours rather than days. Don Dawson, Centra's account manager at New Horizon Communications Corp. in Waltham, called TowerStream after last year's cable cut knocked Centra off line. "We put a microwave antenna on the roof of the Westin ... installed the entire system, and gave them a 6-megabit connection from TowerStream in two hours," Dawson said.
Today's preliminary WiMax equipment has a line-of-sight range of about 10 miles. But unlike earlier broadband wireless systems, WiMax can work even when the antennas aren't directly facing each other. However, this reduces the range to about 2 miles, although Thompson says one customer in the heart of Manhattan gets excellent results from a WiMax transmitter 3.5 miles away.
Industry-watchers see a WiMax boom ahead. Visant Strategies Inc., a market research firm in Kings Park, N.Y., predicts a $1 billion market in WiMax equipment by 2008. But for now, nearly all that growth will come from business customers. Thompson says the technology still isn't ready for consumers. "Pricing is too expensive for that right now," he said.
But that's likely to change. The world's biggest chipmaker, Intel Corp., already builds the WiFi-compatible Centrino chipset for laptop computers. Now Intel says it will develop a WiMax version of Centrino by 2006, and plans to make WiMax compatibility a standard feature on laptops.
When companies began mass-producing WiFi gear, hardware prices fell to well below $100. If the same thing happens to WiMax, today's home broadband providers are in for some competition.
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