At the peak of the excitement over the Sprint-WorldCom merger, it appeared that the high-speed Net world would shortly be gaining a "third pipe" in the form of widespread fixed-wireless Net connections. The technology came soaring out of obscurity late last year, as all three big long-distance players announced plans to offer the service commercially, and the erstwhile merger partners made it a centerpiece of their joint high-speed Net strategy.
But, despite its big-name backing, analysts are now saying, fixed wireless still will be stuck as a bit player in the broadband industry for the knowable future. The "big two" high-speed technologies--cable modems and telephone companies' digital subscriber lines (DSL)--seem to have nothing to worry about, at least today, analysts say.
"Fixed wireless is a great option, but really in a supporting role," Forrester Research analyst Mark Zohar said. "Cable and DSL are going to jostle for the leading role for the foreseeable future."
Fixed-wireless systems are mounted on rooftops, using a large dish antenna. The technology uses different wireless spectrum frequencies than mobile wireless systems and provides local phone service and high-speed Internet access primarily for business customers.
Forrester's numbers are even more daunting. Forrester predicts that cable and DSL jointly will have 86 percent of the high-speed Net access market by 2005, with fixed wireless trailing with only 9 percent.
The fixed-wireless business has been building slowly for several years, with companies like Teligent and Winstar Communications expanding in big cities, with a focus on business customers. For consumers, little has been available other than promises and trial projects.
The momentum began to shift last year, when Sprint and WorldCom each began buying up companies that offered "wireless cable," or combination cable TV-like and broadband Net connections. After months of bidding against each other, the companies agreed to merge. But that plan crashed to a halt this summer when the Sprint-WorldCom merger ran into a regulatory brick wall. Suddenly each company was pushed back to the starting line, each with only half of an ambitious high-speed Net strategy in hand.
The two companies said they would push ahead individually and have since gone from trials into offering genuine commercial service. AT&T also has taken its "Project Angel" wireless broadband initiative out of trials and into the market. But without the merger of Sprint and WorldCom, the industry lacks a single giant backer for the technology.
All three of the giants, as well as some of the local telephone companies, are pursuing the fixed-wireless strategy despite remaining hurdles.
Analysts note that the technology itself still has issues that keep it from being as widely used as ordinary cable modems or DSL. Wireless signals still can experience interference from buildings or even large trees between a home and the antenna, making the technology difficult to use in densely populated city areas.
And like cable, it is a shared-bandwidth technology--as more people log on in a given neighborhood, the download speeds available to any single person will drop.
Cisco and smaller companies such as Wi-Lan are developing a new set of technologies intended to make fixed wireless more reliable, particularly in congested urban areas. But adoption of that technology on a wide scale has yet to occur.
Sprint and WorldCom, at least, are optimistic that the wireless option can compete on equal terms with cable and DSL.
"We see it as the 'third pipe,'" said Russ Robinson, a Sprint spokesman. But even Sprint would be offering a "hybrid" of options that gives DSL to people in some places and wireless to others, he said.
Over the last few months, Sprint has turned on service in five cities, with more than 10,000 customers in the two that have been operating long enough to start reporting figures. The company announced service in Houston today. The service is priced at $39.95--or whatever the local DSL market price is--and offers an average of about 1 megabyte-per-second download speeds, the company says.
Since the collapse of the merger, WorldCom is focusing its fixed-wireless services on the business market. It kicked off its first "soft launch" of the service in Memphis, Tenn., on Sunday and still has commercial trials in several other cities. Typically, a "soft launch" means the service is available and being sold commercially but has not yet been marketed.
Not all telecommunications executives are as bullish on the technology, however.
"I don't think fixed wireless is a silver bullet in any territory," Qwest Communications International CEO Joe Nacchio said at a recent technology conference. "I think it's a good supplemental technology, but it's not a cure-all for rural territories."
Qwest inherited some fixed-wireless technology from local phone giant US West, which it bought earlier this year.
Analysts say the technology will continue to be most useful in areas where DSL or cable lines haven't been upgraded, a category that still covers much of the country and particularly rural and outlying suburban areas. Despite continuing technological hurdles, it is easier to set up wireless towers in these areas than to invest the millions of dollars necessary to bring high-speed cable or telephone lines out to many of these regions, analysts say.
AT&T has said that it plans to use its Project Angel technology to fill in areas where it doesn't own cable lines or its partners don't have upgraded lines.
Sprint's Robinson said that the collapse of the merger with WorldCom will undermine that company's efforts to bring the technology to rural areas, however. Some areas that are in the 35-mile radius of suburban towers still will be able to get service, but the initial plans have been scaled back, he said.
In the meantime, fixed wireless will have to compete with DSL and cable on price, and companies will have to convince consumers that it is a viable option, analysts said.
"There truly is a consumer stigma issue around wireless," Forrester's Zohar said. "Where fixed wireless will have to play is as a lower-cost option."