" 'Wider-Fi' Widens"

Leslie Brooks Suzukamo, St. Paul Pioneer Press

It could have been a disaster when Otter Tail Corp. moved one of its corporate offices out of downtown Fargo, N.D., in 1999 and suddenly found itself beyond the range of high-speed, data-carrying telephone lines so vital to its business.

The local telephone company's offer of a slowpoke dial-up connection didn't meet Otter Tail's need for fast Internet traffic. So Joy Fetting, Otter Tail's information technology director, took a radical step.

She chose a wireless carrier, connecting the utility company's 20-person office to the Internet through a small rooftop dish antenna and bypassing the phone company's buried lines.

Four years later, Otter Tail's connection is still wireless and now faster than a T-1 landline — at less than half the cost.Otter Tail's experience is a harbinger, some industry experts believe. Wireless technology advances in the past 18 months make it an alternative to the kinds of broadband services offered by the telephone and cable companies, they say.

This is not the popular "Wi-Fi" access increasingly offered in coffee shops, hotels and airports. That form of high-speed wireless can reach only a few hundred feet. The kind of technology Otter Tail uses is called wide-area wireless broadband or "wider-fi," because its signals can reach 10 miles or more.

Some wireless advocates believe that wider-fi can eventually compete with phone digital subscriber lines (DSL) and coaxial cable. But most of wider-fi's use now is out of the spotlight, in sparsely settled rural areas that DSL and cable don't reach or in cities such as Fargo, far from metropolitan areas where tiny Wi-Fi hotspots blaze.

The Twin Cities area will get its first taste of wider-fi technology soon, though. Vicom, the New Hope-based company that provides Otter Tail Corp. with its wireless broadband connection, is setting up a similar service this summer on the outer edges of the metro area.

Vicom last week installed its first broadband transmitters on top of the Elk River water tower. Vicom's Twin Cities wireless broadband subsidiary, Multiband Wireless, is doing the work.

Vicom's first wider-fi network will reach the northwest communities outside the I-494 ring, said Vicom president Steve Bell. Service is expected to begin by the end of the year.

Vicom says it will deliver wireless broadband connections to residents and small businesses that may not have access to high-speed phone lines or cable, and it will do it at competitive prices. The company will not compete head-to-head with the metro area's DSL and cable providers, Bell said.

"It's the Wal-Mart strategy — start at the edges and continue to deliver more for less," he said. "We're going to hit 'em where they ain't."

Eventually, the company plans to ring the Twin Cities outer suburbs and exurbs, first in the northwest, then the northeast and then the southern ring by the end of next year, using an advanced and proprietary form of wireless technology.

The company says it is drawing upon lessons from providing wireless broadband in Fargo, which it calls its "beta" or test site.

SILENT REVOLUTION

It's kind of like a silent revolution going on," said Phil Redman, a research vice president for the Boston technology consultant Gartner Inc. "There are now hundreds of service providers serving rural America."

The idea of using radio waves to carry data and thus bridge the "digital divide" in rural areas that are underserved by the phone and cable companies goes back to the mid-1990s.

But the equipment wasn't up to the challenge. Transmitter signals couldn't reach more than a few miles and were easily blocked by mountains, buildings and even trees. Sending technicians out to set up a receiving dish on a rooftop or side of a building made it costly for companies, and the receivers cost several hundred dollars, scaring off most customers.

Industry watchers like Redman say the technology has vastly improved, to the point some service providers can promise cheap "plug and play" installation that doesn't need a service technician or a high-priced antenna.

Some new technologies also are getting around the limitations that required a straight "line-of-sight" between a transmitter on a tower and the receiver, Redman said. They only need a small modem-sized receiver that can be put on a desk or placed by a window.

Measurements of the industry's size are nearly impossible, however, mainly because such applications are relatively small and scattered. The closest thing might be the Federal Communications Commission's survey released last week showing growth among all broadband subscribers in a sampling of states with large rural populations — California, Kentucky, North Carolina, South Dakota, Virginia and Wisconsin.

In Wisconsin, the estimated percentage of occupied housing units with a high-speed line in service jumped from zero to 15 percent from December 1999 to December 2002. In South Dakota, the percentage moved from zero to 6 percent in the same period. Overall, the national average grew from 2 percent in 1999 to 16 percent in 2002, with nearly 20 million broadband lines at the end of 2002 compared with only 2.8 million at the end of 1999.

That data only counted providers with at least 250 high-speed lines in service, however. Many of the providers of wireless broadband have far fewer customers, and many are reluctant to talk about their businesses in any detail, said Andrew Kreig, president of the Wireless Communications Association International, the industry's Washington, D.C.-based trade association.

The association plans to release a study in September. Meanwhile, it tracks anecdotal information, such as the opening of wide-area wireless broadband networks in New York and Louisville, Ky.

"Most of them want to operate under the radar screens of the incumbent cable and telephone companies so they're not undercut by the incumbents with discounts offers," Kreig said.

WIDER REACH

Info-Link Wireless, a tiny, 9-year-old Internet service provider in Morris, would fit that description.

Info-Link Wireless hires some of its staff of eight or nine workers part-time from the town's University of Minnesota campus, and it provides line-of-sight broadband to a little more than 100 customers outside Morris, general manager Ken Rausch said.

In February, Info-Link bought new equipment from NextNet Wireless of Bloomington to offer cutting-edge non-line-of-sight service in Morris itself. The equipment wasn't cheap, Rausch said, and so far serves only about 25 town customers, mainly businesses. But Rausch sees it as an investment for the future.

The NextNet equipment allows the company to broadcast on a slice of radio waves licensed by the FCC. This so-called licensed spectrum is more expensive to operate on — Info-Link Wireless leases it— but it allows the company's signal to float unimpeded by competing wireless broadband signals.

It's akin to reserving a lane on the freeway — you can toss someone using your spectrum in your area off the air. "Anything offered in the unlicensed spectrum is in a free-for-all," said NextNet marketing and communications director Barb Heine.

The history of 5-year-old NextNet offers a telling glimpse of how new this emerging industry really is. A private company, NextNet doesn't release financial information but Heine acknowledged that it had no revenue until about 18 months ago when it finally deployed its first commercial products. One of its largest customers is MVS Comunicaciones, Mexico's largest TV and radio provider, which is using its system to provide wireless broadband in Mexico City.

Monet Mobile Networks of Washington state made a splash in Duluth last October when it flipped the switch on its $6 million wider-fi network and began offering connection speeds rivaling local cable and DSL at comparable prices.

Since then, it has picked up about 1,000 customers in the city and surrounding area, including Superior, Wis., enticing a large proportion of the area's laptop users, said salesman Nathan Schmidt.

Like Info-Link, Monet's signal can penetrate buildings and does not require line of sight to one of its 18 transmitter sites. But it uses a different technology based on cell phone transmissions, Schmidt said. All a user has to do is slip a modem card into a laptop slot or connect an adaptor to a desktop.

Monet also offers service in Moorhead, Minn. and nearby Fargo, N.D.; in Superior and Eau Claire, Wis; in Sioux Falls, S.D.; and in Grand Forks and Bismarck, N.D. The number of tower-installed transceivers it needs to blanket its cities with bandwidth range from two in Sioux Falls to 18 in Duluth.

Monet claims business and consumer subscribers in the thousands, but declines to be more specific.

Even cell phone companies are getting into the act. While they've been touting services that transmit data on phones for several years, the speeds are no faster than a dial-up connection. So many cell phone companies are experimenting with establishing Wi-Fi hot spots and putting up wide-area networks. Verizon, for instance, is experimenting with wide-area broadband networks in San Diego and Washington, D.C., later this year.

HURDLES REMAIN

Wide-area wireless has been tried before, with some spectacular failures.

Ricochet Networks, a service with a loyal following in the late 1990s, went bankrupt in 2000 because it couldn't attract enough mobile users who would pay $80 a month for service and $300 for a modem. (A revived Ricochet Networks launched wireless data networks in Denver and San Diego last year and hopes to establish a national network.)

Not everyone is convinced the new wide-area wireless broadband is ready for the marketplace. Minneapolis-based Internet service provider Visi.com looked into acquiring two wireless broadband networks to supplement its DSL service. But it backed away because it couldn't get enough good information on one and couldn't figure out how to make a profit on the other, said general manager Bil MacLeslie.

The technology is tempting, MacLeslie said. Wireless broadband has become a "very low-cost solution" to reaching more customers, especially those outside DSL boundaries. But the pitfall for an Internet service provider is that it has to maintain the facilities and train Internet technicians to run an unfamiliar radio technology, he said.

"We're not real radioheads," he said.

Given the expense of new equipment, training and maintenance, it might not make economic sense, especially if you're trying to undercut competing DSL or cable, MacLeslie said.

Also, the only really cheap wireless broadband is in the unlicensed or public spectrum. Several frequencies, such as 2.4 GHz, which already were being used by cordless phones and microwave ovens, are being filled up not only by wireless broadband providers but also by companies setting up private point-to-point networks to connect buildings on, say, a corporate campus.

The jostling signals in the same space are starting to interfere with one another, MacLeslie said.

Because of those hurdles, even ardent observers like the wireless association's Kreig acknowledge that wireless broadband will probably not compete head-to-head with its more established wired cousins, DSL and cable, for the time being.

However, Gartner's Redman notes that many parts of the country are untouched by DSL and cable. Verizon, the nation's largest local telephone company, can offer DSL to only 65 percent of its consumers, while cable nationwide still reaches only 70 percent of U.S. homes.

LEAP OF FAITH

For now, Vicom is keeping customers like Otter Tail's Fetting happy. Its service is offered on unlicensed spectrum but it's at the uncrowded 5 GHz range, Fetting said. If crowding occurs, she may reconsider.

For Fetting, choosing wireless broadband was a leap of faith, born of necessity.

"With our number of users, we needed more bandwidth than a dial-up connection," she said, "and none of us has the patience waiting for a dial-up connection, much less sharing a dial-up."

The company switched wireless carriers in 2002 to Corporate Technologies USA Inc., a Vicom subsidiary, and upgraded its system. This spring, when Otter Tail moved again and found itself back in range of the phone company, Fetting did a careful cost analysis of tried-and-true phone lines vs. an even more newfangled form of wireless Internet connection offered by Corporate Technologies.

Newfangled won easily.

Typically, a business T-1 line and Internet access in Fargo costs between $800 and $1,000 a month, Fetting said. Otter Tail is paying $300 a month for a connection that's 1½ times as fast.

Fetting's office-mates are thrilled. They noticed immediately how much faster the connection ran. "I remember hearing, 'This is amazingly fast,' and 'I wish I could get something like this at home,' " she said.

Leslie Brooks Suzukamo can be reached at 651-228-5475 or lsuzukamo@pioneerpress.com