Options blossom for mobile Internet access

The number of ways to get on the Internet wirelessly and at high speeds is growing and likely to get almost dizzying.

Cellular carriers, including Verizon Wireless and AT&T Wireless, are beginning to launch high-speed 3G networks (for third-generation of wireless development) to support mobile data services.

Operators such as Clearwire, owned by telecommunications tycoon Craig McCaw, are starting to offer broadband wireless to compete with DSL and cable-modem services.

Nextel Communications has launched a unique breed of wireless Internet service in the Raleigh, N.C., region — a mobile, high-speed option known as FLASH-OFDM.

At the same time, consumers are setting up Wi-Fi networks in their homes, and companies such as T-Mobile USA have introduced Wi-Fi hotspots in Starbucks and other sites around the country.

Countless small wireless Internet service providers are using a flavor of Wi-Fi to offer very high-speed access mainly to businesses and in markets that lack other broadband options.

In the background, a new technology called WiMax promises to deliver fixed and ultimately portable wireless Internet access over the next few years.

All of this activity indicates that broadband wireless has finally arrived, according to some industry veterans.

Promises, promises

Not that it hasn't been heard before. The wireless industry is notorious for loudly heralding, year after year, that the technology is finally ready for the masses, even though it may not be.

Using different technologies, numerous small and big companies in the past failed to see the promise fulfilled. But now, industry veterans say this time may be different.

"Really, '05 becomes the year of broadband wireless," said Ronny Harldsvik, vice president of communications and marketing at Flarion, the Bedminster, N.J., developer of mobile broadband network equipment using FLASH-OFDM technology.

Harldsvik and others say technology has progressed, the industry has learned from past mistakes, and there's sufficient demand to suggest that wireless Internet really might finally make it.

But big questions remain, namely which of the many options will survive.

An unusually high number of technologies are competing partly because cellular carriers and wireless Internet service providers suddenly share a vision of the future: delivering portable or mobile high-speed wireless Internet.

"One side of the world is adding portability while the other side adds capacity," said Jon Hambidge, head of global marketing at San Bruno, Calif.-based IPWireless.

Wireless Internet service providers have traditionally offered fixed services, offerings that use wireless links to deliver access to a building, but which require users to be plugged in to a particular spot. Now those ISPs are looking toward portability, which would allow users access to the service anywhere with coverage.

Cell carriers, on the other hand, already have mobile offerings, and now they want to add capacity so they can deliver higher data rate services.

Operators on both sides of the fence have myriad options, but their choices are somewhat dictated by the portions of the broadcast spectrum they have rights to.

Most major cellular companies use wireless spectrum ideal for the standard 3G technologies, known by their abbreviations 1xEV-DO or WCDMA. The carriers say the 3G networks can offer speeds as high as 2 megabits per second, though slower speeds are probably more typical. Customers pay as much as $80 a month to use the networks.

Going it alone

Reston, Va.-based Nextel, which uses a nonstandard technology for its existing cellular network, is taking a different approach by introducing a mobile service around Raleigh based on the proprietary FLASH-OFDM technology from Flarion. The network operates in the same type of spectrum that other carriers are using to deploy 1xEV-DO and WCDMA.

For $35 a month, Nextel Broadband customers around Raleigh can access 150 megabytes of data, downloading at a rate of 750 kilobits per second. Paying $50 gives users unlimited access.

While most operators are adamant about using technology based on standards so that they can buy equipment from multiple vendors, Nextel is open to nonstandards technology.

"There are a lot of positive points to it," said Audrey Schaefer, a Nextel spokeswoman. "Our success is linked to [our vendor's] success. We're able to not have to go through the bureaucratic nonsense of a standards body."

Nextel can have more control over the product and product development can happen quicker, she said.

Flarion is quick to point out that even though its technology isn't based on a standard, the company is not alone in building equipment for the technology.

Vendors in loop

"We won't be a single-source supplier to these operators," said Flarion's Harldsvik. The company is working with Nextel's preferred vendors, which can license the technology from Flarion to offer Nextel another source, he said.

Nextel's against-the-grain approach may give it another advantage. "If you're No. 3 or below on the market share list [as Nextel is], you can't just do a me-too service," said Hambidge.

Nextel is reportedly testing IPWireless' network technology, the standards-based TD-CDMA, though through a different type of spectrum than the Flarion service requires.

With the Flarion-based service, Nextel can market higher speeds and lower costs than cell carriers' offerings. "It leapfrogs 3G and competes with DSL," Nextel's Schaefer said.

Recent research supports her claims. A report from Parks Associates found that 43 percent of Internet users said they would be interested in replacing their DSL service with a wireless Internet service if it was priced in the $30 to $40 range.

In the standards arena, meanwhile, is WiMax, which promises to deliver high-speed wireless Internet initially as a fixed service and later in a portable version.

WiMax can use a part of the spectrum called MMDS, or multichannel multipoint distribution system, which McCaw's Clearwire and Sprint already own.

Previous versions of the technology, as used by Sprint and WorldCom, required a clear link between an antenna in town and an antenna at the customer location, without buildings or many trees in between. WiMax is better able to penetrate such obstructions so operators will be able to serve more customers.

Clearwire will likely use certified WiMax equipment when it becomes available. Right now, it's gearing up to deliver a fixed service similar to what WiMax would offer.

That service, expected to launch this month, will initially be in two markets, St. Cloud, Minn., and Jacksonville, Fla., and is expected to be available in 20 over the next year.

The Kirkland-based company is positioning the service to compete with DSL and cable modem, selling its ease of use and customer service, said Todd Wolfenbarger, a Clearwire spokesman.

"We're not wandering into this naively in terms of who were competing with," he said.

Clearwire may attract users for a different reason as well. "Some people just want someone ... who isn't the cable or phone company," Wolfenbarger said.

Nextel is also considering WiMax, according to Schaefer. WiMax also appeals to wireless ISPs that use unlicensed frequencies to deliver fixed Internet access.

Portable version

A portable WiMax service, which won't be available for several more years, will be similar to the broadband offerings based on Flarion and IPWireless technologies.

But the services may target different users. Wireless ISPs such as NextWeb, a large provider in California, deliver very high-speed, fixed access to businesses. Those customers are unlikely to cancel their service in favor of a mobile option, said David Williams, vice president of operations and engineering at NextWeb.

Even Nextel's Schaefer said that, except for business customers such as real-estate agents, who spend little time at their desks, mobile broadband subscriptions don't usually displace an office connection.

Wolfenbarger wouldn't say if Clearwire has plans to use the portable version of WiMax, but he pointed to the history of the company's management team, many of whom started out with McCaw when he launched the nation's first national cellular company.

"These people are incredibly innovative," he said.

A head start

Even as they sort out technology options, wireless operators have to make decisions about timing.

Broadband services are growing overall and will at some point reach saturation, noted Hambidge. If operators wait for the portable WiMax standard to be established, they could be waiting until 2007. By then, the market may already have enough operators serving the market, he said.

Time to market is also urgently important for the likes of Flarion, IPWireless and other vendors with unique technologies. Their equipment is available now, which gives them a head start.

"If they have this window, even if they don't dominate, they'll get a share of [the market]," said Michael Cai, a senior analyst with Parks Associates, who expects IPWireless and Flarion to corner a small piece of the market.

Ultimately, figuring out how a portable WiMax offering might compete against the mobile offerings from cellular spectrum holders is difficult to predict.

Clues may come next year when fixed versions of WiMax come to market, said Lindsay Schroth, analyst with the Yankee Group. If it's successful, so might the delivery of the portable WiMax standard.

"But their success isn't determined yet," she said.

Nancy Gohring, a Seattle freelancer, writes frequently on telecommunications and wireless developments.