Beyond Wi-Fi: The Road Ahead for License-Exempt Wireless ISPs

[Dave Farber <dave () farber net>]

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From: Dewayne Hendricks <dewayne () warpspeed com>

[Note:  This item comes from reader Mike Cheponis.  DLH]

Beyond Wi-Fi: The Road Ahead for License-Exempt Wireless ISPs
By Mark Long -- 1/22/2003
e-inSITE
<http://email.e-insite.com/cgi-bin2/DM?y=eK2X0Eiefr0Dah0BuWu0A6>

In-Stat/MDR has released a new report in which the firm's researchers
say that license-exempt wireless ISPs (WISPs) are quickly becoming a
bigger and bigger factor in the overall broadband picture.

In "Unlicensed Spectrum Drives Wireless Broadband Infrastructure
Beyond Wi-Fi," the Arizona-based high tech research firm estimates
that between 1,500 - 1,800 license-exempt wireless ISPs (WISPs) are
currently operating in the USA. In addition, researchers estimate
that the license-exempt WISP infrastructure generated $265.2 million
in worldwide revenues during 2002.

With U.S. Senators Boxer and Allen jointly introducing a bill that
calls for increased spectrum allocations for license-exempt fixed
wireless broadband (FWB) systems, WISP market revenues appear to be
on track to experience continued growth over the next couple years as
operators build out their networks, claims In-Stat/MDR. However, as
the market matures, annual infrastructure revenues are expected to
decline back to 2002 levels.

"While the free nature of the spectrum and the low infrastructure
cost will help drive the license-exempt WISP market, there are
several major inhibitors that need to be overcome," says senior
analyst Daryl Schoolar in a prepared statement. "One of the most
critical ones is the mistaken belief amongst the general public that
all wireless Ethernet is Wi-Fi. While general knowledge of Wi-Fi has
helped to spur interest in fixed wireless broadband, it appears that
some potential subscribers will not utilize FWB, as they have
concerns over how a standard developed for the LAN environment, will
operate in the last-mile."

However, Schoolar points out that the growth of all broadband
technologies and services face similar drivers and inhibitors. For
example, both FWB and broadband face subscriber resistance because of
general consumer resistance to additional costs and what the consumer
perceives as a lack of compelling reasons for the service.

While some WISPs are buying their own wireless LAN equipment and then
modifying the hardware to meet their individual needs, others are
turning to proprietary vendors such as Alvarion, which deliver
proprietary systems that will allow WISPs to add additional features
that are not available from wireless LAN platforms. These add-on
options include the ability to create various service level tiers,
differentiate network users, and handling unique billing requirements.

In-Stat/MDR also cautions that the industry will need to carefully
watch how the FCC reallocated unused MMDS spectrum. If the Commission
opens up these frequencies to other MMDS providers, then the move
could end up relegating license-exempt WISPs to fringe market
activities. On the other hand, tf the FCC reallocates some MMDS
spectrum in the direction of license-exempt WISPs, then the move
would likely spur further additional market development.

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