WorldCom adds wireless MMDS area

WorldCom is expanding its fixed-wireless multichannel multipoint distribution service to eight new markets within the next three months.

The service provider will have a total of 13 markets where business customers can buy broadband fixed-wireless Internet access services. The service supports 384K bit/sec up to 1M bit/sec of fixed wireless connectivity for $200 to $600 per month.

While competitively priced, only a fraction of users in the U.S. can buy these services. WorldCom, Sprint and newcomer Nucentrix own almost all of the MMDS licenses in the country. However, at the end of last year there were only 20,000 MMDS accounts, and 17,000 of them were Sprint customers. WorldCom has been slower to launch its offerings but says it is committed to deploying the first-generation MMDS gear to develop its service footprint.

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The cities the company is adding this year include Minneapolis; Kansas City, Mo.; Hartford, Conn.; Springfield, Mass.; Montgomery, Ala.; Pensacola, Fla.; Tallahassee, Fla.; and Lafayette, La. The service provider is already offering MMDS in Memphis, Tenn.; Jackson, Miss.; Baton Rouge, La.; Chattanooga, Tenn.; and Bakersfield, Calif.

MMDS is not readily available because service providers are waiting for next-generation equipment to come to market, says Lindsay Schroth, an analyst at The Yankee Group. Next-generation MMDS gear that equipment vendors such as ADC, Cisco and Vyyo are working on removing the line-of-sight restraints of today's MMDS, she says.

There has to be a clear view between MMDS customers and their service provider's base station to support the service. Next-generation gear does not have line-of-sight requirements, Schroth says. This means the gear can be deployed in areas where there are large buildings or may be heavily wooded. Sprint has said it will not deploy MMDS beyond its 14 cities until it can do so with next-generation gear.

But Schroth points out that this updated gear will not be generally available until next year, and users shouldn't expect wide-scale support until the end of next year or early 2003.

WorldCom says it will begin testing next-generation MMDS equipment by year-end.

MMDS service providers also have to apply to the Federal Communications Commission for a two-way license for each city where they are deploying service. While not a difficult process, it is time-consuming, says Joe Brook, director of broadband services at WorldCom.

When MMDS licenses were first issued about 20 years ago they were to be used for asymmetrical, fixed-wireless cable television service. This application never really took off, but when the FCC made clear that it would approve two-way communications over this spectrum, WorldCom and Sprint each bought fixed-wireless service providers in 1999. WorldCom spent $400 million, and Sprint more than $800 million on these acquisitions. The deals gave each provider 35% of all the MMDS licenses available in the U.S.

Despite the shortfalls of MMDS, Schroth predicts there will be 87,000 subscribers by year-end. This demand is driven by users' need for fast, affordable Internet access service.

But MMDS users will likely never match the number of DSL or cable-modem subscribers. The Yankee Group estimates there will be 890,000 MMDS users by 2006. According to a recent FCC report, there were 2 million DSL customers and 3.6 million cable-modem customers at the end of 2000.

MMDS still has a place in the market because DSL and cable are not available to all users. DSL service reaches 45% of the consumer market, and cable-modem services reaches 66% of the consumer market, according to the Yankee Group.

MMDS options graphic

PickYourAuto.com, an online car buying service that's starting up in Bakersfield, is using WorldCom's MMDS service primarily because the company has no other broadband choices, says Gary Fussel, president of the company.

Fussel says his only option was to purchase a dedicated T-1 line, which costs at least $800 more per month than what he's buying from WorldCom. PickYourAuto.com has its 10 employees using a shared symmetrical 384K bit/sec MMDS Internet access fixed-wireless connection that costs $200 per month.

"We were using dial-up lines to load up car photos to our Web site. It now takes 5 minutes to do the same task that took 30 minutes with dial-up," he says.

In addition to its 384K bit/sec symmetrical MMDS, WorldCom also offers a 768K bit/sec downstream and 512K bit/sec upstream service for $400 per month and a 1M bit/sec downstream and 512K bit/sec upstream service for $600 per month. The service provider charges a one-time installation fee of $1,000 for each of its MMDS offerings.

WorldCom adds wireless MMDS area

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