Forget the headaches of T1 and DSL. Wireless gives your business Internet access at low cost. But it's not risk free.

Feeling squeezed? Even with speedy T1 connections, many companies can't pump data through their pipes fast enough. Sooner or later it comes back to bite themâ€"-in lost opportunities, soaring costs, and slumping productivity. For a growing stampede of these enterprises, the best solution for greater bandwidth lies in snipping the wires. Fixed-wireless technology has been around for years. It provides a high-speed Internet or network connection via a wireless receiver that is permanently installed outside a building, usually on the roof. But recently the range of choices and technological advances has exploded, making fixed wireless a viable option for businesses that wouldn't have considered wireless access even two years ago. What's more, service is finally available in most major cities.

With fixed wireless, browsing your company's intranet, sending email, or downloading large files is no more complicated than it would be using any other high-speed Internet link. But because data travels through the air instead of over copper lines, cable, or fibre, fixed wireless allows for downstream connections ranging from 500Kbps to 155Mbpsâ€"-faster than DSL, cable, or T1 lines. (Data moves upstream at about one-third the speed.) And since the system is stationary, it blows away connection speeds for mobile phones and handheld devices, which typically offer rates of 14.4Kbps. Businesses now use fixed-wireless connections for broadband access to the Internet or a wide-area network (WAN), linking multiple company locations together.

It's no wonder that annual revenue nationwide for fixed-wireless service is expected to skyrocket almost 150 percent this year to nearly US$2 billion, topping $16 billion by 2004, according to the Strategis Group research firm. Business subscribers totalled about 15,000 in 1999, when wireless companies began rolling out networks. Last year, Strategis reports, subscriber numbers hit 65,000. And projections for the next three years show no sign of waning: 175,000 for 2001, 390,000 for 2002, and 670,000 business subscribers for 2003.

These numbers are impressive, but what can the technology do for you? Fixed wireless isn't problem-freeâ€"-nor is it bulletproof. But service has profoundly improved over the past 18 months. And once you run the numbers on costs, you're likely to be sold on it.

Faster, faster

It's not just the old wire-line connections that are slow. Ever try getting DSL hooked up?

For lots of companies, the move to fixed wireless comes out of desperation and frustrationâ€"-hulking, old-line telecom companies that can't respond fast enough and endless waits for DSL and other emerging broadband technologies. Trying to get DSL service has proved especially infuriating for many businesses. Take commercial photographer Marty Perlman. Southwestern Bell, his local phone company, initially told him DSL service was available, but the installer was a no-show after a six-month wait.

So last summer he signed up for wireless broadband service from T-Speed. Perlman pays US$49.95 a month for a connection speed of up to 1.5Mbps. He also paid $105 for installation and equipment.

The arrangement wasn't exactly a match made in heaven, but Perlman was willing to cut the provider some slack. The installer wasn't very good, he says. And the network has gone down twice so farâ€"-without warningâ€"-for maintenance.

But after expressing his dissatisfaction to company reps, Perlman expects he'll get better service in the future. In his view, such glitches are minor trade-offs for speed. Seven 5MB photos he recently sent to a client in Canada took only minutes to send, while they would have taken hours with his old wire-line connection.

Fine print

DSL can't always deliver what it promises, so fixed-wireless providers hope to absorb the pent-up demand.

The promise of DSL has teased many small and medium-size businesses like Perlman's. While DSL providers advertise up to T1 speeds, telecom companies have been slow to roll out the service. And in most cases, a business has to be within 5km of the provider's central office to achieve the highest speeds and capacity. What's more, many of the aging Bell systems' copper lines are unable to handle the souped-up DSL signal.

Likewise, the fibre-optic dream is just that for many US businesses. Less than 10 percent of buildings in the United States have fibre running to them. Analysts say the high cost of laying fibre is hindering service rollouts, and that most business will have to wait years before fibre covers enough ground to handle the demandâ€"if ever.

Fixed-wireless providers, some of which own fibre networks and also resell service over the local Bell companies' existing lines, are betting that this demand will allow them to build a lucrative business. David Ackerman, executive vice president of business development and strategic planning at Winstar, a wireless provider, says his company targets business of all sizes. Customers turn to the New York-based service provider because it can offer them the broadband connections and service they can't get from traditional phone companies. By the end of this year, Winstar's service is projected to be available to more than 250,000 US businesses.

Fixed-wireless players include familiar telecom heavyweights such as Sprint and WorldCom. But customers are lining up to buy service from fixed-wireless-only carriers like Winstar and Teligent, thanks to dissatisfaction with phone companiesâ€"-and in spite of market troubles for the telecom sector in general. For example, Winstar, which traded at less than 50 cents a share in early April, announced that month that it was cutting 2,000 jobs. Scores of smaller providers such as Fuzion Technologies Group and Nucentrix Broadband Networks also are scrambling to satisfy subscriber demand.

Fuzion plans a broad nationwide rollout this year into the US Northwest. And it will continue to build on its existing markets in Florida, Georgia, New York, and Colorado. Meanwhile, Nucentrix will focus on widening its territory in Texas and Oklahoma near-term and branch out into Illinois, Iowa, and Missouri in 2002.

More for your money

Often the most compelling argument for fixed wireless isn't the speed but the cost for that speed.

For many companies, fixed-wireless costs are even more compelling than speed. Prices depend on the size of your business as well as the capacity and scale you need; they range from US$200 a month for a small company or home-based business that needs no more than 1Mbps to $1,500 for a large company that needs a pipe equal to multiple T1 lines.

As with other broadband services, you pay for bandwidth, not individual connections. For example, Nucentrix offers telecommuters 384Kbps downstream and 128Kbps upstream for $199.95 a month. At Winstar, customers can get T1 speeds for as low as $699 a month with a three-year contract. The number of PCs you plug into a single pipe is up to youâ€"-just know that the more people there are using it at once, the slower the connection for each one.

When it comes to installation and equipment costs, you can expect to pay anywhere from $100 to $3,000, but providers often waive these fees hoping to make up the costs through the monthly charge or additional businesses in a particular building.

Some service providers employ the people who install the equipment; others use third-party installers. Gray Hancock, senior analyst for telecom infrastructure with Current Analysis, a research firm, says it's better to go with a fixed-wireless provider that mainly employs its own installers. "If the installer is the one who also fixes the service, there's a better chance your service can be restored quickly if something happens because he or she knows where everything is and understands the technology," he says.

Service can be up and running in days if your building already has an antenna. Otherwise, Hancock says, it can take weeks or even months if the wireless provider has to negotiate with the landlord to install a rooftop antenna.

Providers typically entice businesses to sign multiyear contracts by offering discounts from 10 to 25 percent. But it's wise to start with a one-year commitment to avoid getting locked into a service that doesn't measure up.

What, me worry?

Fixed wireless is relatively inexpensive and impressively speedy, but it doesn't come without a few kinks.

Speed and price are its selling points, but any mention of wireless access raises questions of reliability. "Fixed wireless is for real, but there are still some teething issues to be worked through," says Andy Belt, strategic growth global practice leader of Boston-based consulting firm Adventis. Belt has researched a broad range of wireless technologies, including fixed wireless.

As the new kid on the broadband block, fixed wireless isn't perfect, Belt says. Maintenance issues create periods of downtime for subscribers as providers tweak connections. More importantly, obstructions in the line of sight from the building transmitter to the hub interrupt service. That means that trees, heavy rain, or thunderstorms can sometimes hamper connection speeds. But as long as there is a clear line of sight between your rooftop receiver and the wireless carrier's hub, service remains solid.

And there's no doubt that service is improving. Many industry watchers believe last year was the turning point for fixed-wireless technology. Even so, it isn't a one-stop solutionâ€"-especially for larger companies.

For businesses with 500 or more employees, fixed wireless is a promising technology for networking telecommuters and backing up existing fibre or copper-line connections. Banc of America Securities, a division of Bank of America, opted for Winstar's service last year as a backup for wire-line data and voice connections. The midtown Manhattan locationâ€"-where intensive option, bond, and over-the-counter trading occursâ€"-uses the fixed-wireless service to make sure its operations stay up and running at all times.

What's more, a backup fixed-wireless connection is more flexible than simply adding more wire lines since the fixed-wireless link works on a completely different backbone.

All or nothing

More companies are letting go of their hard-wired connections and not looking back.

For small to midsize businesses that can't invest in two telecom networks, going totally wireless is more cost effective. "I wanted something that was fast but that didn't cost what a T1 cost," says Tom McShane, owner of Bimark, a logo goods supplier whose annual revenue was more than US$4 million last year. The company, based in Cupertino, California, regularly sends 200K to 300K logos to clients via email, so it needed something more than a standard modem connection.

In January 1999, McShane signed up with Wavepath, a service provider (bought by Sprint last year) that was looking to beta-test its system. He paid $175 a month for the service with no installation or equipment costs. "We were using a 56Kbps dial-up modem, so I figured we had nothing to lose," says McShane.

During the beta test, he says, the service was down twice within a 12-month period, but since Sprint has taken over there has been only one occasion of downtime and McShane now pays just $199 a month. "It's worked out phenomenally wellâ€"fast, reliable, and cheap," he adds.

Midsize companies are seeing similar results. At the IBM Southeast Employees' Federal Credit Union, Wendell Blakeley, senior vice president of the 52,000-member credit union, found Fuzion more flexible than his local telecom provider, BellSouth.

Two years ago, Blakeley wanted to upgrade a branch office's 56Kbps connection to a T1 line so that it could quickly send mortgage loan information to the main office. Since the lease on the branch office was almost up, however, he was reluctant to sign a long-term contract-â€"but without the contract BellSouth wouldn't offer him any price breaks.

Fuzion agreed to provide a T1-comparable wireless link at a discount over BellSouth's price. "They were so easy and accommodating," Blakeley says of Fuzion. "They were hungry and wanted the business. We took advantage of that. It was refreshing."

When the branch moved closer to the credit union's main location in Boca Raton, Blakeley stayed with Fuzion. He pays $700 a month; installation and equipment cost $1,500.

But is it rock solid?

Expect the typical hiccups of an emerging market. And don't forget the fixed-wireless wild cardâ€"-keeping the line of sight clear.

Of course, most wireless providers are new players in an emerging market. As you'd expect, this has its downside. It's still not possible to accurately measure reliability rates. While service providers claim to offer "the five nines," or 99.999 percent reliability, you typically won't find these promises in the contract you sign.

It's not uncommon for fixed-wireless service customers to experience minor interruptions. Early on, the IBM Southeast Employees' Federal Credit Union experienced about six incidents of dropped service, three of which were the credit union's bloopers and three of which originated on Fuzion's end. But Blakely says Fuzion notified him about the problems immediately and the service was back up and running within 20 minutes.

The wild card in reliability is keeping lines of sight clear, says James Mendelson, an analyst for the Strategis Group, which specialises in wireless broadband. Some wireless technologies handle obstructions better than others.

MMDS, which operates at a lower frequency, typically penetrates foliage. And it weathers thunderstorms. Higher-frequency LMDS is more prone to interruptions. And no frequency can penetrate buildings or solid objects.

Steel Digital Studios, an e-commerce development company, has been using fixed wireless since the summer of 2000. While overall service from Austin-based Shield Networks has been stellar, says Steel Digital's Bill Cutshall, there has been one major line-of-sight issue.

Every day at about 4:45 p.m., Cutshall says, Internet service was interrupted. "It turned out there was a lot of construction going on in downtown Austin and a crane would be parked in our line of sight every day at the same time. It took 24 hours for the company to correct the problem."

Here today...

Companies offering fixed wireless are often young and haven't been immune to recent economic swings.

Technical obstacles aren't the only problems that plague fixed-wireless companiesâ€"-many of which are less than two years old. Financial hiccups are part of the industry's growing pains. Shakeouts are inevitable.

John Rosica, president of the Silicon Valley operations of recruiting giant Management Recruiters International, knows firsthand how the market can affect the fledgling fixed-wireless business. For almost two years, Rosica was a satisfied customer of Advanced Radio Telecomâ€"-having signed on with the fixed-wireless carrier because "we were disgusted with the level of quality and consistency of Pac Bell's service," he says, referring to the local arm of SBC Communications, Pacific Bell.

Up until the end of March, when ART abruptly filed for Chapter 11 bankruptcy protection, Rosica says the company provided his firm with excellent service. "We couldn't have an hour of downtime," he says. MRI's IT recruiting Web site, which for the most part is hosted internally, requires a substantial amount of bandwidth to handle the traffic generated by job candidates posting their résumés to the siteâ€"up to 300 uploads a day. With ART, Rosica got Internet capacity equal to about 10 times a single T1 line-â€"for the same price.

In the wake of ART's demise, Rosica grudgingly went back to Pacific Bell, purchasing a T1 connection. His monthly broadband bill stays the same, he says, but his company will have to make do with a fraction of the bandwidth that ART provided. Why not choose another fixed-wireless service? Rosica says his experience with ART has scared him away from taking chances on new technology.

But if he had it to do over with ART, Rosica says he would. "I cannot say enough good things about them. I'm sure they tried up to the last minute to pull out some additional funding to save the company," he says. "I don't know what else they could have done."

ART is not alone. Three-year-old Teligent, one of the biggest players in fixed wireless with 35,500 customers nationwide, has had a rocky start. The company saw its stock skid in April to less than 50 cents a share after reaching a high of US$100 last year.

Teligent's senior vice president of marketing and communications Mike Kraft says the stock market has been hard on telecom in general, but particularly on smaller, newer companies. "We're fully funded in 2001," he says.

Mendelson advises companies to stick to short-termâ€"one-yearâ€"contracts. Not only will this prevent you from pouring money into a sinkhole, it also lets you hedge your bets.

Steve Flach, CIO of Caliper Technologies, plans to go with a fibre-optic connection for his data and voice traffic. Until that technology is available, he's been using fixed-wireless service from XO Communications, since last winter. A package deal from XO offers the company, which makes lab-chip devices that streamline laboratory experiments, both voice and data for a projected savings of $40,000 over service from the two telecom companies that were handling Caliper's network before. The company, which employs 200 people, was using two T1 lines for voice access and another two for Internet traffic.

Flach says XO plans to run fibre to his building eventually. He foresees using fixed wireless as a backup, but won't continue with wireless alone. "It's a matter of reliability," he says. "What if the antenna blows over?"

So far, Flach adds, XO's service has been solidâ€"and customer service has been responsive. As for the future, he says, "my crystal ball doesn't go beyond six months."

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