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Is The Wireless Internet Not Ready For Prime Time?
RabidMonkey asks: "As an employee at a high speed wireless ISP which has gone into receivership (Maxlink communications Inc), I've begun to wonder: Is there actually a big enough market for Wireless Internet access? After reading that Look Communications is cutting 300 of its staff and looking for a buyer, I'm a little skeptical. I'm wondering if there are any other big wireless service providers that are doing well out there, and if they are, what are they doing differently? What are the different technologies in use? Why do these ventures seem to be failing?" With the majority of users still connecting to the internet via phone lines and cable modems and DSL finally catching on, is it too soon to expect wireless systems to be successful in anything more than niche markets?
"I think that the technology and the need are there for this, but why does it fail? I know that our rates are very competitive, installation is the industry standard (free) and our customer service is good. And the same goes for Look. Two companies with good technology that failed. Is it just not the right time?"
This isn't why wireless companies are failing, but TCP does have problems over wireless - e.g. packet drops are interpreted as congestion, when they could be due to a burst of data corruption.
There's a good article on TCP in the latest IP Journal that covers TCP over wireless, see www.cisco.com and search for IPJ. Issues are downloadable or you can sign up.
The reason wireless "last mile" internet will happen is simple: competition.
Nowadays, the only options are DSL, cable, ISDN, or analog dial-up. Most people are lucky to have 2 out of the 4 and they all suck in their own unique ways. Analog dial-up is just slow, ISDN is still too slow and too costly. DSL and cable are the only ones to provide sufficient bandwidth for reasonable $, but they have little legs. Their days are numbered, especially DSL, since they have horrible bandwidth/distance restrictions.
Now imagine that you are a new company that wants to offer service and get a subscriber base. You are really faced with only two choices today: buy a cable company or resell DSL. Buying a cable company is a hell of a proposition and most companies aren't going to be willing to take the plunge. If you resell DSL, someone else is holding your balls (be it Covad, Northpoint, etc). Sure, you could install your own DSL equipment, but when faced with that cost, you might as well buy a cable company. Even if you go this path, you are still subject to the phone company's whims. If your little company doesn't controll its own destiny, how can it be sure to compete?
Competition is severely limited by our current technology. The magic bullet to that is wireless. The technology isn't there yet, but wireless systems are potentially cheaper to implement and faster to deploy. Cheap and fast are the key words. It means a small company could put up a single receiver in a neighborhood, be operational in a matter of weeks, and grow from there. They don't have to bury lines, deal with Telco's that move at a snail's pace, and deal with endless gov't regulations (most are needed for monopoly-busting, but not needed in wireless since there is no monopoly). In other words, they deal directly with their customers, realizing all of the profits and controlling their own quality levels.
As a consumer, I want choices. Right now, my choice is between the cable company that sucks or the DSL reseller that sucks. I would jump at the chance to be able to choose between a few different wireless providers in my neighborhood.
I also feel that the technological hurdles left to jump are nothing compared to the potential market. In other words, there is too much money to be made to let something as simple as "its not technologically possible" to get in our way. We will find a way, we always have in the past.
What's happening to the wireless companies is the same thing that's happening to all the dot-coms: the venture capitals are getting fed up with seeing their money thrown to the winds, and they're starting to demand return on their investments.
From a commercial point of view, wireless is perfectly viable. It can be marketed and sold no problem. But the companies that are trying to build these are the same ones that lived on venture money for two years. It's the venture capitalist's fault, really: they bought into the hype so much, they gave away money without thinking.
Regardless of technological problems (there's always technological problems, and you just have to throw manpower at them), what you need is a vision and a business model.
Until these companies stop acting like teenagers getting free lunch money from their benevolent parents, and start planning ahead, keeping their growth in synch with their vision of the market, and constructing intelligent, sensible business approaches and revenue models, the thing is never gonna get off the ground.
It seems to me all those hip CEOs who managed to live off somebody else's money for the duration of the Internet business boom are trying to do so again by throwing in the word 'wireless'. Well, tough luck, guys. The investors are up to your game.
The good:
1. Wireless is easy to install. If you are close enough to your nearest access point, just pop in a pcmcia card with a pigtail, install drivers, and you're done.
2. Wireless is extremely reliable. The link itself basically never goes down. The only times I've had a bad signal to noise ratio are when I screwed up my internal wiring to my antenna and during very high winds.
3. Wireless is very fast. At up to 11Mb/sec, it's one of the fastest access methods available in the price range.
4. Wireless is cheap for the ISP. Initial setup cost for your ISP is lower than some comparable technologies (DSL particularly). They can hook up 30 customers to each access point using the same frequency-hopping spectrum, and add cheap additional hardware for each new group of 30 customers.
5. Wireless is cross-platform. Many drivers are free software.
The bad:
1. Wireless can be very complicated to troubleshoot. It's easy for the customer to screw up their link; when something flakes out, it is often tough to tell whether it is you or your provider.
2. Wireless is very expensive for the consumer. While setup costs for people very close to an access node is relatively small (less than $250 for the card and pigtail), costs range up to $1000 for people further away.
3. Wireless can be very slow. 802.11 is designed to slow the link as the signal to noise ratio drops. You may connect as slowly as 64Kb/sec.
4. Wireless can be tough to install. Setting up my link involved several hours of attic and drill time.
5. Wireless competes in common frequency ranges, and has the usual problems with radio transmissions. As the so-called "medical band" (2.4GHz) becomes more cluttered, you're going to notice higher packet loss and latency, conflicts with cordless phones, etc. Also, hills, trees, and bridges can all interfere with your line-of-sight to your ISP's antenna.
6. Wireless has trouble scaling over distance. Your ISP will need a repeater every mile or three in order to broaden their service. DSL and cable have other, similar costs, such as upgrading local loops.
My take? I believe wireless is a great technology, and will continue to enjoy a strong and growing *large* niche market. I know I love mine : )
Matt Barnson
Matthew P. Barnson
I learn what I think when I read what I write
Maybe, once these african countries start getting the majority of their population into urban centers, we can talk about the best way to wire them up, but as it stands there's just too damn much area and not enough people packed close enough together. I think you're going about it ass backwards. First they establish stable capitalist democracies, then they start wiring up an expensive information infrastructure. When you've got a country with a GDP per capita below $5,000 (or $10,000 even), you have got much more pressing concerns than obtaining a fast net connection.
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
The first thing that needs to be clarified for this article is that it is talking about non-WAP, non airport wireless. What it is talking about is direct competition wireless to DSL and cable, something in the order of anywhere from 256k/s to over 11 mbps/sec for laptop/desktop/corporate lan. After looking into this, there were a couple reasons we found that were not favorable. 1) Line of sight. Most of the high speed wireless internet equipment on the market today uses the ISM unlicensed 2.4 Ghz range and spread spectrum. The biggest drawback to using such a high frequency is that it is pretty much line of sight. If you can't see the transmitter, you're likely to not be able to get service. Water is also another factor, trees in the way? The water in them obscures the signal. Snow on the dish? Plan on an outage. These two points come after many hours of reading mailing lists and from word of mouth of another ISP in the area that is now doing wireless and experiencing daily outages measured in hours. 2) Location We are in the midwest. Its flat out here and to get any height on a antenna you have to erect and maintain huge expensive towers. There have been several wireless sucess stories, most of them coming from mountainous areas where the ISP places the transmitter on a mountain and serves people in the valley. This work very well. However in the midwest, without a lot of height, you find that there are shadows in any major metropolitan area (regions where the signal just will not reach due to obstruction) Those are the reasons why we decided against a wireless implementation at this time. Hopefully solutions will present themselves in the future that address these issues.
Simple economic principal. If the demand for a commodity is low, often a seemingly bargain price just won't drive demand.
Cel phones work because they are on demand service of a single media type: voice transmission. They are easy to use and moderately interfer with the ability to do other things (such as walk and chew bubble gum.)
As for wireless internet, it could be the same rate, or cheaper than at home, but won't appeal to as many people for the requirement of devoting effort and attention to a laptop or whatever. Saturation of the market happens with a small population, it doesn't mean the value isn't there, Iridium was a high value service, but not for Joe on the street.
Expect consolidation and slow growth. Best of luck.
--
A feeling of having made the same mistake before: Deja Foobar
Maybe some people DO want it for their house. Where I live (just south of Houston), I can't get cablemodem access and I can't get DSL. I'm not holding my breath to see either of these - I live too far from the exchange, and I don't see the cable company ever putting in cablemodem access in before I leave. It wouldn't surprise me if more people are incapable of being DSL wired/cablemodemed than are capable at this moment in time.
If wireless broadband was in my area right now, it would be my only option. As it stands, living in the technological backwater that I do, I'm stuck with a 56k modem that only gets 42k on a good day.
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