Fixed wireless is standing in the wings, ready to relieve broadband
service providers of their dependence on incumbent carriers, but
will it trump DSL?
Fixed wireless could provide the most cost effective way of
accessing networks at broadband speed, despite the technology's
mixed success so far. The application of fixed wireless links for
data communication has until now mostly been confined to low speeds
and to locations beyond the reach of alternative wire-based
options.
But emerging fixed wireless technologies promise to compete more
strongly with the other contenders, such as digital subscriber line
(DSL) and cable modems, while providing more extended coverage and
freedom from the incumbent owners of telephony or cable TV
networks.
This could usher in an era of genuine choice and competition for
broadband data services between a number of providers each in
control of its own network on an end-to-end basis without
dependence on incumbent carriers for the final local loop. For
users, this brings the potential of more varied and lower cost
services.
But there are some technical and regulatory hurdles to be overcome
before fixed wireless becomes a serious contender for broadband
access. At first sight the omens are not good, certainly to judge
from the story so far.
The first wireless services in the mid-1990s were all narrowband
and focused mainly on voice. Many were unsuccessful, partly because
of problems of capacity and reliability. One of the UK's largest
fixed wireless companies, Ionica, collapsed spectacularly. There
was limited mileage in such narrowband services for data, in the
business sector and attention switched to broadband.
It appeared necessary to move up to higher frequencies to achieve
broadband data rates, which are generally defined as being 512kbps
or more per user. However, this reduces the range to about 3km and
it also decreases the proportion of locations within that range
that are capable of being reached to between 20% and 50% of all
buildings, depending on terrain. The remainder will lie outside the
line of sight.
Therefore, to achieve widespread coverage, many masts have to be
deployed, with obvious cost and environmental implications.
Nevertheless, companies and governments have proceeded with
development of high-frequency fixed wireless technologies at 10GHz,
28GHz and 40GHz, culminating in the UK with the auctioning of 28GHz
licences at the end of 2000. This was overshadowed by the
third-generation (3G) mobile auctions earlier in the year, and went
almost unnoticed among the general media.
The 28GHz spectrum auction was a bigger flop than the 3G mobile
auction was a success - it raised just £38.1m against the
government's expectation of £1bn. This was partly a reaction to the
dotcom and high tech collapse that was by then well under way.
The major factor, however, was a growing realisation that the
technology, called local multipoint distribution service (LMDS),
would fail, says Peter Wharton, chief executive of fixed radio
system maker Cambridge Broadband.
For this reason, Cambridge Broadband is focusing on an alternative
technology at the lower frequency of 3.5GHz, which achieves greater
range and coverage without sacrificing performance, according to
Wharton. The evidence so far is that he is correct.
There are five criteria for judging the success of a fixed wireless
technology: range; percentage of buildings that can be hit by the
signal by virtue of being sufficiently within line of sight; data
rate; cost; and quality of service. The 3.5GHz technology now being
trialled in the Cambridge area has a good aggregate score on all
five counts.
"We can do twice the speed of LMDS, match what it can do on quality
of service, but with the cost advantages of lower frequencies, and
a range of 20km instead of 3km, along with 90% coverage of
buildings instead of 20% to 50%," says Wharton.
Furthermore, Cambridge Broadband has elegantly solved the backhaul
problem common not just to all fixed wireless services, but to DSL
as well. The issue here is that having provided access over the
last few kilometres beyond the destination, the service provider
then has to connect back into its own, probably fibre-based, trunk
network, at sufficient capacity.
For DSL providers, the only recourse in most cases is to lease a
circuit from the incumbent,which in the UK is BT. The same applies
for fixed wireless providers, but Cambridge Broadband does the
backhaul by radio transmission within the same allocated 3.5GHz
frequency spectrum, using the same equipment. This "self-backhaul"
approach eliminates dependence on any incumbent carrier, with
potential benefits for competition and user price.
But now for the bad news. All these potential advantages are being
jeopardised by the dragging of regulatory feet and failure to
provide true competition, says Wharton. Auctions for potential
service providers in the 3.5GHz spectrum, as opposed to the 28GHz
range allocated in December 2000, had been promised for this year
but have been repeatedly delayed. It also appears that the
Government favours having just one national provider in order to
concentrate the customer base on just one company to reduce the
risk of further Ionica-type failures.
However, studies have shown that in any given segment, such as
mobile telephony, at least four alternative competing service
providers are needed to avoid planned or unplanned cartels forming
and to ensure that there is real price-cutting competition. Of
course, there will be competition from DSL, but even then there are
likely to be only two or three genuine alternatives for any given
region, says Wharton.
Indeed, he is exasperated by the UK regulators. "It is a disgrace,"
he says. "They are the last of the Stalinists, favouring cosy
duopolies rather than genuine competition that benefits the
customer."
There is also the issue of persuading customers that fixed radio is
a real contender, especially when DSL is also available. Both are
ultimately intermediate technologies, with the end game being
direct fibre connection, which brings the greatest potential
performance and reliability. But currently only 5% of UK businesses
are within reach of fibre, and it will be many years before
coverage becomes widespread.
The UK is already populated with swathes of fibre trunks, but
businesses have to lie within corridors of about 100m either side
of these, usually in major cities, for direct access to be
economical. The role of DSL and fixed wireless is to radiate this
bandwidth out either side of these corridors.
Until the new 3.5GHz services become available in a year or two,
fixed wireless will never compete on price with DSL, says Matthew
Hatton, an analyst with CIT Information & Analysis, which
recently produced a report on fixed wireless. "It is considerably
more expensive, so if DSL is available, I would go for that." So at
present, fixed wireless is only a contender where DSL is
unavailable, but the new 3.5GHz version is definitely worth
watching.
Comparison of fixed access technologies
- Optical fibre
Pros: Highest bandwidth, up to 10gbps. Greatest
reliability
Cons: Most expensive, and only available in large cities, confining
it to big sites of major enterprises at present
- Satellite
Pros: Offers similar data rates to DSL, can reach remote areas, and
is cost effective for multicast applications delivered to multiple
users
Cons: Not yet widely available, and very expensive for two-way
communications
- Asymmetric digital subscriber line (ADSL)
Pros: Provides sufficient speeds, typically 2mbps upstream and
256kbps downstream, for most multimedia applications, is far
cheaper than leased line services, whether cable or fibre based,
and is potentially available in most places where there is a
telephone line
Cons: Roll out in UK slow and coverage patchy. For competition,
relies on unbundling of the local loop, which has not been an
unmitigated success anywhere in the world
- Cable modems
Pros: More widely available in some cities than ADSL, with
comparable capacity. Relatively cheap
Cons: Mostly for residential users, with relatively few major
business sites within reach. Shared bandwidth means performance
degrades as more users are connected to a given local segment
- Broadband wireless
Pros: Comparable bandwidth to ADSL with potentially wider reach.
New 3.5GHz technology solves many of the problems, such as poor hit
rate within the supposed distance range. Faster than DSL to roll
out, easier to connect up new users, and allows alternative
carriers to compete with end-to-end service, bypassing BT's
network
Cons: Existing 28GHz technology has poor coverage, while new 3.5GHz
has yet to be approved. Competition within the new 3.5GHz spectrum
may be limited.