Like the old dog that would not die, digital subscriber line and cable services continue to dwarf wireless in the house of the end user. Yet wireless, the new dog that is at once nimble and naive, must frail aimlessly about for a share of the bone until he befriends the old dog.
The story of the future of wireless convergence with DSL and cable seems to be compromise, the new dog mixing its raw energy with the experience of other technologies to breed broadband dreams for both enterprises and consumers.
Analysts and carriers have agreed that the major difference between the thrusts of broadband wireless service in the United States and parts of Europe and most of the developing world, is that the United States has infrastructure in place that reaches the customers with bells and whistles, even if the bells and whistles occasionally do not toll or blow.
And DSL and cable are the poster technologies too grounded to be uprooted overnight.
According to a study by The Strategis Group on multidwelling units, the cravings for high-speed and video on demand among U.S. residents for DSL and cable services will far outstrip wireless in the next five years. Cable Internet subscribers are expected, according to the report, to range between 370,000 and 2.7 million between 2001 and 2005, while DSL customers are projected to leap from 270,000 to 3.7 million during the same period.
By contrast, the wireless movement is slower, trudging from zero to 270,000.
“The way out,” said Gregg Levin, senior vice president for marketing and business development at BridgeWave Communications, “is to build hybrid networks. Wireless needs fiber and copper as copper and fiber need wireless.”
The lone penetration of wireless in both metropolitan and rural America has been shackled by a series of frustrations ranging from technology to finance to tradition.
Herschel Shosteck, an analyst and head of Herschel Shosteck Associates Ltd., identifies three Cs as obstacles. They are cost, competition and conservative attitudes.
He said wireless costs a lot of money to install and delivers less than promised. He referred to a U.K.company, Ionica, which plunged into bankruptcy in 1997 after losing $14 for every dollar in revenue. He, however, noted that LMDS has demonstrated some progress.
Levin agrees, adding that LMDS is effective in metropolitan America and works where there are large concentrations of subscribers in limited geographic areas. The economics works, explains Levin, because the expense is defrayed when the numerous subscribers pay the cost for installing and providing the services.
The basic issue with LMDS, he said, is that the licenses are expensive because the service requires a lot of bandwidth.
Levin said MMDS, which has lower bandwidth requirements, is suited for rural or small-town America and carriers can build smaller cells for multi-megahertz services, each within about a 35-mile radius.
The competition lies in both technology and companies held captive by their Nasdaq glories.
“Most companies have been pipe-centric,” said Levin, stressing the need for what Shosteck calls “shared infrastructure.”
Analysts believe the competition between DSL and cable on one hand and wireless on the other will have to give way to cooperation.
Levin said DSL speed drops with distance and cable’s copper does well only where it can reach, and so both facilities’ imperfections can be covered by tapping the strengths of wireless.
He said with the apparent sag in the economy, many companies’ cash-flow woes are now dictating cooperation, European style.
Shosteck referred to 3G licenses, which he characterized as “so absurd that networks will share infrastructure and products of fixed operators.”
“A convergence,” he said “is already occurring”, referring to Teligent Inc., which is “moving from retail to wholesale.”
He said this is a model recognized by some and not others, adding that the backbone will be the same but the types of access to the end users-whether optical, fiber, coaxial, copper or wireless-will be different.
AT&T Corp. envisioned this about a year ago, but its plan has not taken off because it thought it would cost $100 billion within two years, but it now estimates it will cost about $500 billion between five and 10 years.
Kevin Cavanaugh, Winstar’s director of media relations, said Winstar has deployed its wireless broadband services to 4,000 full on-net buildings with 100,000 business and it is on pace to provide end-to-end network services to almost 10,000 buildings and 250,000 local addressable businesses by the end of the year.
Levin said even Winstar has to use other technologies like fiber rings to make its wireless technology work. Cavanaugh said the company will use dark fiber lighting and metropolitan fiber rings.
The path to the future, predict both Shosteck and Levin, is consolidation, like in Europe, where Spain’s Telefonica is buying both cellular and landline companies.
“They realize,” said Shosteck, “that the cost of ubiquitous network is too great to implement such a network.”
