Posted 03/2000
Reaching the 'Have Nots'
Wireless Broadband Reaches Small-Town America
By Gail Lawyer
 "We
will demonstrate our commitment to rural America by pledging that within the year after
this merger closes, we will accelerate our deployment of broadband wireless in rural and
underserved areas in the Southeast, Southwest, Pacific Northwest and Great Plains."--Bernard J. Ebbers, president and CEO, MCI WorldCom Inc. |
Central Texas Telephone Cooperative Inc. (www.centex.net) serves a 3,320-square-mile swath of rural Texas. With only 7,500 access lines--or roughly two subscribers per square mile--one would expect this area to be a prime example of the so-called "Digital Divide." With the distance between customers and an investment of $8,200 per subscriber, it may appear too difficult and expensive to offer dial tone, much less 10mbps data services.
However, Central Texas Telephone is one of many telecom companies staging an air assault on the theory that rural America is being left behind in the Internet economy. A winner of two business trade areas (BTAs) in the FCC's (www.fcc.gov) LMDS auction a couple years ago, as well as an MMDS-based wireless cable provider, Central Texas Telephone is among many independent telcos and competitive providers using broadband wireless services to bring to the country advanced data services to which urban dwellers have long had easy access.
Broadband wireless "is great for rural economic development," says Delbert Wilson, CEO and general manager for Central Texas Telephone. "Ours is a great place to live, but it's lacking in jobs."
Within the coming year, broadband wireless will make greater strides into underserved areas. Sprint Corp. (www.sprint.com) and MCI WorldCom Inc. (www.wcom.com) plan to begin rolling out services using their MMDS licenses. The FCC has stated its commitment to rural areas with plans to auction off additional spectrum that could be used for fixed or mobile wireless Internet access (see "FCC Auctions Spectrum in Spring,").
"The next state of competition will be broadband wireless competition," William E. Kennard, FCC's chairman, said when discussing the agency's 2000 agenda. "We want to be able to make as much spectrum available as we can."
 Broadband
wireless "is great for rural economic development."--Delbert Wilson, CEO and general manager, Central Texas Telephone Cooperative Inc. |
"People get the quality of life the rural areas offer, as well as the advantages of the big city," says Liza Dennehy, general manager of local access for Touch America Inc. (www.in-tch.com), the telecom subsidiary of the Montana Power Co. "And, for companies that are in more rural areas, once they get high-speed access, it doesn't matter where they're located."
Touch America is using its LMDS licenses to extend service to customers in areas that its 12,000-mile fiber optic network doesn't reach. "It's one of the tools in our toolbox," says Dennehy. "LMDS allows us to extend fiber to a larger number of customers." The company won 24 licenses in 30 cities in the Pacific Northwest, Rocky Mountains and Northern Plains states during the 1998 FCC auctions. The BTA populations range from 50,000 to 600,000.
In late 1999, Touch America launched voice and data services via LMDS to government agencies, businesses and school districts in Billings and Butte, Mont. Now the company is beginning additional buildouts in Idaho, Montana and Washington, with plans to have nine more cities in operation by year's end.
Like Touch America, many independent telcos believe wireless broadband will allow them to bring more services to existing customers, as well as give them a means to compete as a CLEC outside their ILEC territory.
"LMDS spectrum is more amazing than we originally thought," says Debby Werth, marketing manager for South Central Telcom (www.socencom.net), an independent telco in Medicine Lodge, Kan. "As a result, it's possible our business plan may change because of the capabilities."
Werth says the company hopes to begin commercial deployment of its LMDS system in Pratt and Wichita, Kan., sometime this month. The telco's own office in Pratt is currently being served by the wireless system.
"When we originally bought the spectrum, we wanted to do a package of local, long distance, Internet and security systems--all the applications business and residential customers would want," says Werth. Now, she says, the company is exploring the delivery of video over wireless, as well.
Louisiana Competitive Telecommunications (LCT, www.lct-group.net), the CLEC subsidiary of Kaplan Telephone Co. Inc. (www.kaplantel.net), has been testing its LMDS service since last summer.
LCT won the A-band licenses for the Lafayette and New Iberia BTA in Louisiana, and began offering service to local schools in July 1999. LCT plans to continue testing its LMDS equipment and network through this summer, while it continues its buildout, says Karl Turnley, LCT's president.
The company will use its license to provide high-speed Internet access and voice services to businesses and MDUs. Eventually, LCT hopes to offer wireless residential services. "It would be nice to do video on demand and TV service. But, for now, we're focusing on full business services," Turnley says.
Like LCT, Central Texas Telephone created a subsidiary--Central Texas Communications--that is certified as a CLEC in Texas. The company is now building three sites in San Angelo, Texas, which, with a population of 100,000, is the largest market in which the company owns licenses.
Once tests of the network are complete, Wilson says, the company will offer 10mbps data services. In Goldthwaite, Texas, where the company is headquartered, LMDS will be used to serve business customers only.
"Today we only offer an in-city application because of cell ranges," says Wilson. "Where we have two subscribers per square mile this won't work." Using LMDS, Central Texas Telephone can shoot the 10mbps service only about 2.41 km.
The biggest problem facing would-be broadband wireless providers is the availability of equipment at the right price.
"We're just providing service to businesses right now because of the price points on equipment," says Touch America's Dennehy. "We're ahead of the technology curve." She notes that once CPE prices come down, as more carriers deploy broadband wireless services, Touch America will begin a residential offering.
Central Texas Telephone is facing a similar dilemma. The company has MMDS licenses over which it offers wireless cable. Wilson says he's waiting for new equipment that will allow the company to handle distribution of high-speed Internet and voice services over a 15- to 20-mile radius.
The Bell companies also are getting into the broadband wireless game in rural areas. In Houma, La., BellSouth Corp. (www.bellsouth.com) is testing a hybrid service to bring high-speed Internet access to residential customers.
Rather than a two-way wireless service, BellSouth is using a one-way system. The service offers 1.5mbps wireless to the customers, but uses a wireline connection upstream to the service provider. This setup is best for users who download large files, as opposed to businesses that tend to send larger files out.
"We're doing a trial to get an understanding of the technology issues we'll face in the rural market, and test the economics," says Mel Levine, BellSouth's director of wireless strategies. "In doing wireless, the obstacle in getting down to residences is the cost of CPE." By using a one-way system, CPE costs are less than half of what it would cost to implement a two-way wireless service.
BellSouth will be testing its services with a mix of its own employees, non-employees, schools and libraries. The trial is expected to run through the end of September. Then BellSouth will stop the service for assessment before launching it into commercial deployment.
Small-town America may get the most substantial cure for its lack of bandwidth as some of telecom's Big Boys begin to take notice of rural areas.
Sprint and MCI WorldCom, which hope to complete their merger later this year, have released plans to bring MMDS-based services to underserved areas.
"We will demonstrate our commitment to rural America by pledging that within the year after this merger closes, we will accelerate our deployment of broadband wireless in rural and underserved areas in the Southeast, Southwest, Pacific Northwest and Great Plains," said Bernard J. Ebbers, MCI WorldCom's president and CEO, during a speech in January.
Both Sprint and MCI WorldCom purchased several struggling companies that owned MMDS licenses for broadcast wireless cable services after a 1998 FCC ruling also allowed companies to offer high-speed data services over the spectrum.
Sprint has already begun rolling out service in a few markets. Initially the company used a one-way model in Phoenix, but eventually upgraded to two-way wireless. Overall, Sprint has licenses in 90 cities and plans to be operational in up to 20 cities by the end of this year.
MCI WorldCom has licenses in 160 markets and hopes to begin rollouts this summer, after securing the necessary approvals from the FCC, says Bill Feidt, director of corporate development for MCI WorldCom's Wireless Solutions division. Initially MCI WorldCom expects to offer only high-speed data services.
"We are preparing to serve various-sized cities," says Feidt. "This will be the third pipe in many markets."
