Sprint Begins Two-Way Wireless Internet Access - Company Business and Marketing

Online Newsletter, June, 2000

Online users now have a third way of accessing the Internet: two-way wireless service - that may easily become the preferred and low-cost method of using the Internet without tieing up their phone service.

The newly formed division of the Sprint Broadband Wireless Group began offering its two-way wireless Internet access service on May 8 in the Phoenix, Arizona area. Called Sprint Broadband Direct (sm), the new two-way wireless service initially offers downloads for both residential and business users at 5 Mbps and uploads at 256 Kbps. Later this year, the service will offer its "Plus" service with downloads at 5 Mbps and uploads at 512 Kbps.

Wireless Internet access by SpeedChoice in the Phoenix, Arizona area was first reported in the April 1998 'Online Newsletter' (p.1). At that time SpeedChoice only offered one-way wireless service (the upload portion was via telco land line). However, at that time two-way wireless trials were already underway that had been sanctioned by the FCC.

In 1999, Sprint acquired People's Choice TV Corp. which already had a presence in nine major U.S. cities: Chicago, Detroit, Houston, Indianapolis, Milwaukee, St. Louis, Salt Lake City, Phoenix, and Tucson. (Tucson will be added this month [June] to the Sprint Broadband Direct (sm) service, and then 20 additional U.S. cities by the end of the year, and more than 100 cities by 2001.) Sprint, with MMDS, now has the potential of reaching 30 million U.S. homes (plus businesses).

Sprint itself was acquired by MCI WorldCom in November 1999 (MCI acquired WorldCom from AOL.). The Sprint/MCI WorldCom merger is expected to be approved this quarter by both regulatory agencies and shareholders. The result is that the Sprint Broadband Wireless Group is now one of the largest broadband, fixed wireless operators in the U.S. Following the completed merger, the new "fixed wireless" services will be available to customers in over 100 cities, and the new company will be called "WorldCom" (http://www.wcom.com).

Initially, Sprint Broadband Direct (sm) will be used to carry high-speed Internet service. Next, the broadband wireless connections will serve as an enabling access method for Sprint's much wider encompassing ION (Integrated On Demand) service.

Sprint is using MMDS, which it says is "better than sliced bread". MMDS (Multichannel Multipoint Distribution Service) was originally licensed as a one-way service for providing wireless video programming (i.e. "wireless cable"). ... But all of that has changed with recent technological advances because the wireless cable industry failed its efforts to compete with wired- and satellite-based video programming. As a result, the FCC revised its service rules allowing the frequency spectrum to be used for bi-directional services as a transport mechanism for high-speed Internet access. Sprint is now in the process of working with the FCC to migrate its existing license to the new two-way guidelines. The filing window for the new two-way licenses begins in early July and will end, if all goes according to plan, shortly after Thanksgiving.

The technology behind MMDS will enable Sprint to deploy a fixed wireless network providing reliable and relatively interference-free broadband Internet and other data services. Sprint's new services will be free from the limitations of copper wire and allow the company to roll out services independent of the local telephone companies or the cable modem facilities of cable TV companies.

Indeed, just as the railroads laid thousands of miles of track in the 1800s, only to rip them out in the 1900s - much copper and fiber optic cables may ultimately have the fate of rotting in the ground as traffic chooses another and better route. More than 62 million miles of fiber optic cable have been laid during the past three years.

The timing of two-way wireless services couldn't come at a better time. ... Although DSL (Digital Subscriber Line) high-speed services are being marketed for both residential and business use by the regional telcos, the fact is that DSL has distance limitations because many users are too far from a central telco office (and both copper and expensive fiber optic cables are way late in being laid). Cable modems are subject to limitations that cable companies create called "neighborhoods" (usually up to 1,000 users per "neighborhood"), but these quickly degrade as more users get online slowing down the whole "neighborhood". To compensate for this some cable companies, such as Cox Communications, have limited upload and/or download speeds for residential users - thus defeating the whole idea of high-speed access. ... Even Quest Communications, which is acquiring US West, has thousands of miles of installed fiber optic cable - which may soon be rendered obsolete. ... Ditto on cable TV modems which also require expensive cabling and hookups.

Wiring and cable costs are extremely high to wire a city. According to Motorola, it costs about $25,000 a mile to lay new two-way hybrid fiber coaxial cable. Other sources say that in New York City the average cost of laying fiber optic cable is $3 million a mile. -- By contrast, using just a single transmitter and MMDS, Sprint can serve customers within a 35-mile coverage area (line-of-sight) totalling more than 3,000 square miles at an average cost of $2,000 per square mile. MMDS requires only a single transmitter at the tallest feasible elevation in the service area (in Phoenix it's South Mountain, and in Chicago it's the 1,454 foot tall Sears Tower). Repeater transmitters can be used in mountainous area such as Phoenix (Shaw Butte) to fill in any "shadows" interfering with main line-of-sight communications.