Skip to main content

Canadians Beat U.S. On LMDS Deployments

The curtain may finally be rising for a North American
rollout of LMDS technology -- not in the United States, but in Canada.

Two Canadian companies have chosen vendors for the
wireless-broadband-network technology that operates in the 28-gigahertz range, which is
known as LMCS (local multipoint communications system) in Canada.

WIC Connexus, a subsidiary of Vancouver, British
Columbia-based Western International Communications Ltd., and MaxLink Communications Inc.
chose Canadian manufacturer Newbridge Networks Corp. to provide network equipment valued
in the hundreds of millions of dollars for deployment in several major cities, starting in
the first quarter of 1999. MaxLink is a consortium involving Canadian and U.S. interests.

It now looks as though the Canadians will beat U.S. LMDS
(local multipoint distribution service) licensees to market with commercial deployments,
said Joe King, a principal partner in Dallas-based Frazier/King Media and an investor in

"Eight months ago, I thought that the United States
would be first, but I don't think that's likely now," King added.

The companies have been testing gear since receiving
licenses in October 1996 that allocated them a 1-GHz chunk of bandwidth. The bandwidth
allowed WIC and MaxLink to each work within 33 major markets, intermittently pushing back
their deployment schedules as they waited for the technology to mature.

"Had we rolled out a year earlier, we wouldn't have
had the sophisticated system to work with that we will have now," said Suzanne
Scheuneman, vice president of WIC. "We believe that our ability to deploy
state-of-the-art technology based on ATM [asynchronous transfer mode] gives us a
significant advantage."

WIC, which is now operating a test network in Toronto, will
deploy a full network in that city and its suburbs in the first quarter before moving on
to other areas, with Vancouver likely to be next, Scheuneman said.

MaxLink, which has been testing the Newbridge system over a
three-cell network in Ottawa, will build out that city, as well as Montreal and Calgary,
Alberta, starting early next year. MaxLink will add other areas as the year progresses,
said Joel Bell, deputy chairman of the company.

"I'd have given my eye teeth to have known 18 months
ago what we know today about this technology," Bell said.

"It would have been nicer" had the suppliers of
the RF (radio-frequency) component of the technology been better informed about the
workings of their own products. As it turned out, he said, "the robustness of the RF
has been the big surprise for us."

The Ottawa system, connecting several nonpaying enterprise
and institutional customers, worked flawlessly through the devastating ice storm that
struck Canada and the Northeast United States in January, Bell said.

MaxLink found that with cell transmitters spaced to serve a
radius of 2.5 kilometers, "nothing interferes with service."

These and similar findings among companies testing the
muscularity of very high-frequency RF point-to-multipoint systems in the United States are
good news for the wireless-broadband sector, given the impact on capital costs that any
gain in signal reach represents.

Manufacturers were initially not willing to guarantee high
levels of performance at the distances specified by MaxLink.

LMCS is often regarded primarily as a redundancy option for
broadband services or an alternative for companies that are not served by fiber, but both
MaxLink and WIC see businesses that are already served by fiber or high-speed copper links
as important targets in their business plans.

That's because they can offer cost breaks, service
flexibility and packaging to business customers, all afforded by the use of
state-of-the-art ATM technology.

"We really don't believe that we have any true
competitors in terms of the capabilities of the technology and our ability to offer it on
a citywide basis," Scheuneman said.

The Newbridge system -- using RF technology from Alcatel
Telecom in the WIC networks, and from Millitech Corp. and possibly others in MaxLink's
networks -- integrates voice and data over ATM, offered on a bandwidth-on-demand or
fixed-rate basis. Billing systems will match those options, said Bernard Herscovich,
assistant vice president for broadband wireless at Newbridge.

"In the downstream, the TDMA [time-division
multiple-access] channels can burst to something on the order of 40 megabits per second,
and on the upstream, they can burst to 10 mbps," he said.

WIC and MaxLink said they will release details on their
packaging and pricing strategies later. WIC is concentrating on the business sector in its
deployments, while MaxLink may also target large multidwelling units.

The technology will eventually be able to reach into the
single-home residential market, as well, said Dennis Kline, manager for business
development at Alcatel's wireless group.

"It's really more a cost issue than a technology
issue, and it will take time for costs to decline to the point where residential service
makes sense," Kline said, adding that foliage blockage can be overcome with the
positioning of repeaters at neighborhood service nodes.

As for the United States, King and his partners are
discussing possible affiliations with a number of LMDS licensees, with one relationship on
the verge of closing, King said. The company is also a minor stakeholder in WNP
Communications Inc., the leading bidder in the U.S. LMDS auctions that concluded in March.

"In the United States, an awful lot of licenses wound
up in the hands of people who had not been in the business long enough to do their
homework on LMDS technology," King noted, adding that technical advances are now
stirring the interests of some long-distance and other telecommunications concerns.

Another U.S. entity with its sights on developments abroad
is Denver-based Formus Communications Inc., which, like Frazier/King, backed away from
participation in the LMDS auctions due to uncertainties surrounding Federal Communications
Commission rules governing venture-capital involvement in the process.

Formus is working with Online Systems Services Inc., a
provider of high-speed-data services to cable and wireless interests, on preparations for
offering LMDS services in Poland, New Zealand and Ecuador.

"We're starting build-outs in Poland and
Ecuador," said Vernon Kenly, president of Formus.

Formus is using equipment from Nortel in Poland, where the
company has 1.3 GHz to work with, and it will probably go with Nortel in conjunction with
its use of Millitech RF gear in Ecuador, where the spectrum allocation is 2.6 GHz, he

"We're working to obtain licenses in 18 other
countries in Europe, Southeast Asia and Latin America," Kenly said, noting that the
licensing processes vary greatly from one market to the next.

Formus has engaged OSS as its turnkey Internet-service
provider in a test of high-speed-data access, which will be a big part of the business
offering in its commercial rollouts, Kenly added.

While Formus recognizes that it's on the "leading
edge" in its early deployments of LMDS technology, Kenly, like his counterparts in
Canada, believes that the vendors are ready to deliver what he needs to get the business
up and running in the months ahead.

"We think that we'll be able to deploy systems
supporting bandwidth-on-demand when we need it, starting next year," he said.