Wireless broadband might break the monopoly stranglehold that the cable and telephone companies have on Internet access. The new competition could lead to lower prices.
Internet and Phone Companies
Plot Wireless-Broadband Push
By JESSE DRUCKER and ALMAR LATOUR
Staff Reporters of THE WALL STREET JOURNAL
January 20, 2005
Several big Internet and phone companies are moving to provide wireless high-speed access to the Internet -- without phone lines or cable -- challenging the dominance of those traditional connections to millions of U.S. homes and offices.
EarthLink Inc. hopes to be selling this kind of Internet access, known as wireless broadband, in multiple markets across the country by the second half of this year, according to a company executive. Sprint Corp. and MCI Inc. are actively testing the technology, while AT&T Corp. plans to begin deploying it in 2006.
The city of Philadelphia is moving ahead with the nation's largest citywide deployment of the technology know as Wi-Fi and next month will announce details for its plan to blanket the city with cheap wireless Internet access. The reason, city officials have said, is that parts of some neighborhoods haven't been wired for high-speed Internet access via phone or cable lines, and others can't afford it.
These various wireless moves have the potential to yet again shift the balance of power in the rapidly changing U.S. telecommunications industry, giving consumers a potentially cheaper and more flexible alternative to phone and cable lines for Internet access and many other services.
One of the technologies drawing the most attention is WiMAX, which is similar to the popular Wi-Fi standard that millions of people have used to set up wireless networks in their homes but is slated to have a range of several miles. Since WiMAX has yet to be certified, companies are using precursors to the technology.
If the technology takes off, millions of phone and cable customers could cut the wires that tether them to the regulated telecom world. That means being able to surf the Internet and send e-mail at high speeds -- maybe eventually make calls over the Internet -- with a wireless-enabled computer in any room in a house or any outside space covered by the technology. The advantages of portability should be obvious to anyone who remembers when there were no cellphones.
Besides lopping off some wires, wireless broadband could open the door to more competitors. It is expected to become relatively cheap to deploy over time, which could mean lower prices and more options for consumers and businesses.
One disadvantage: The spectrum that Wi-Fi uses is unlicensed and more prone to interference. These plans are different from the so-called 3G cellular networks that wireless companies like Verizon Wireless are rolling out to zap e-mail and video via cellphones.
Before anyone can cut their old cords, however, the technology must clear a number of hurdles. And no one expects to see the telephone companies and cable operators, with their dominance of the Internet-access market, to cede much of that turf easily or soon.
In fact, the Bell companies also are actively testing various wireless services as they rush to dominate an array of emerging technologies like Internet calling. Qwest Communications International Inc. has tested wireless broadband in several markets and plans to roll it out to consumers and businesses in 18 months. Verizon Communications Inc. and BellSouth Corp. have also run advanced trials.
Sprint, for example, has been doing trials of wireless broadband using equipment from Motorola Inc. called "Canopy," in rural markets in North Carolina and Kansas. There, customers receive high-speed Web access wirelessly. Once the wireless broadband services are standardized, "that would allow us to truly compete with a broadband type of application that would compete with cable and DSL providers," says Oliver Valente, Sprint's vice president of technology development. DSL is the most common high-speed technology for Internet access via telephone lines.
Sprint is also looking at offering national WiMAX services, combining its valuable radio-wave spectrum with that of Nextel Communications Inc. The two companies last month announced plans to merge.
