GR Wireless Internet FAQ

December 18, 2006
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GRAND RAPIDS — Just when the RiverCity thought it had Wi-Fi all figured out, the city throws a curve ball, introducing a next-generation technology, a new partner and a host of questions.

Here's what you need to know.

What happened?

The city of Grand Rapids has entered into an agreement with Clearwire, an Internet Service Provider based in Kirkland, Wash., to blanket the entire city in a wireless broadband Internet canopy using WiMAX technology, rather than the more commonly adopted Wi-Fi technology. The vendor was selected from nine proposals submitted earlier this year. Construction of the network should begin in early 2007.

Who is Clearwire?

The brainchild of cell phone pioneer Craig McCaw, Clearwire (meaning "no wire") is poised to become one of the nation's most recognizable companies. The three-year-old firm is fresh off a $900 million capital infusion that gave substantial equity stakes to Intel and Motorola. Its business model is "to break the duopoly of broadband connections held by cable and phone companies by providing wireless broadband Internet directly to consumers." It currently offers service in 370 cities and towns.

A privately held company, it has the same aspirations for complete communications service as do Comcast Corp. and AT&T, with a VoIP phone service in some markets and persistent rumors of alliances with digital TV companies such as DIRECTV.

The company spurred a debate last year over regulation of information services when VoIP competitor Vonage alleged that its users were blocked from the Clearwire network.

What is WiMAX? How is it different from Wi-Fi?

WiMAX stands for Worldwide Interoperability for Microwave Access, and refers to any technology based on the IEEE 802.16 family of standards. It is a cellular-like technology capable of broadcasting relatively large bandwidth over a considerable distance. At best, the standard can support traffic of up to 70 Mbps under optimal conditions, but trials have seldom exceeded 10 Mbps. Clearwire is targeting 1.5 Mbps in Grand Rapids

Wi-Fi is a generic term describing the underlying technology of wireless local area networks, commonly known as hotspots. The standard is based on the IEEE 802.11 family of standards, the physics of which are virtually the same as WiMAX, and share similar wavelengths on the electromagnetic spectrum. It is capable of carrying high bandwidth without line-of-sight connections, but is limited in distance to only a few hundred feet.

WiMAX directly competes with the FCC-licensed wireless technology used by cellular companies and 3GPP broadband startups such as Broadbreeze Communications, the vendor for the OttawaCounty wireless Internet project. These types of services are broadcast from antenna towers over large distances, whereas Wi-Fi would require a "mesh network" of many linked transmitters to cover an equivalent area, with additional transmitters to reach the interior rooms of most structures. Unlike Wi-Fi and DSL, WiMAX's performance is not affected by the number of users on a network.

Wi-Fi has no barriers to entry, aside from the time required to erect a network. The cellular technologies are exclusive, with all of the bandwidth long since auctioned off by the FCC. Clearwire is one of only four U.S. companies with WiMAX licenses.

I heard it's not mobile, is that true?

By definition, WiMAX is mobile, a hybrid of Wi-Fi and cellular standards. In practice, it is more nomadic than mobile, similar to the satellite TV units used by campers and tailgaters. The PC cards used in laptops and desktop computers to access Wi-Fi networks are not yet available for WiMAX. As cell phone manufacturers already have similar products on shelves, it is a near certainty that these will reach market in the near future.

The agreement with Clearwire does call for Wi-Fi hotspots at various locations throughout the city. This will likely have little impact on users: The area's most notable outdoor hotspot,

Rosa Parks Circle
, receives very little use, according to Structure Interactive, the company that maintains it.

How much will it cost?

It appears Clearwire will be slightly more than the DSL service offered by AT&T ($19.95 for 1.5 Mbps and sporadically available in Grand Rapids) and much less than Comcast ($42.95 for 6 Mbps). In other markets, the 1.5 Mbps tier has averaged around $30.

There is a special $9.95 "Digital Divide" tier available for city residents meeting yet-to-be-determined income standards, with a cap of roughly 10,000 users — 5 percent of total residents.

Can this still integrate with the Ottawa or Muskegon county programs?

No, each has chosen a competing technology. But there is a strong chance that the vendors involved in all three initiatives will eventually roll their respective services across the entire West Michigan area.

Bryan Blackburn, general manager of Broadbreeze Communications, the vendor for OttawaCounty, indicated that the service could eventually reach from Kalamazoo to Cadillac. It is currently deployed in JamestownTownship, and is in the process of launching in Allendale.

Tyler van Houwelingen, CEO of Azulstar Wireless and Ottawa Wireless, said he still has hopes to someday build a mesh network in Grand Rapids similar to the one it famously deployed in Grand Haven.

Is this a good deal?

It's a great deal for the city. Clearwire or a similar company would have eventually come to Grand Rapids either way, without any of the amenities it offered when partnering with the city — particularly the discounted price for low-income residents. It also paid for all of the city's costs to date, a nearly $100,000 fee for entry into the market.

Also, the city will get the national exposure it so desperately craved from the initiative, becoming the first municipality to partner with a WiMAX company and potentially the first citywide mobile WiMAX deployment. It should provide a new selling point for economic development and in attracting young professionals.

In return, Clearwire gets an immediate customer base in the city, which will be the network's largest customer, rolling out the service in its emergency and public service vehicles. It also gets access to the city's water towers and other infrastructure, upon which it will erect 10 to 15 antennas.

The city has used the term "budget neutral" to describe the agreement, which is misleading. Clearwire will pay established tower leasing fees of $20,000 each, while the city will pay for its Internet use. If the city's cost is higher than the lease revenue, a set of contingency fees will ensure that the city remains in the black, but there is no equivalent structure to protect Clearwire.

For residents, it will be a competitive, mobile alternative to DSL and cable, but little more. Many cities, including Grand Haven, have employed advertising-based models with basic service at no cost. In OttawaCounty, Broadbreeze is offering service at $19.95 per month.

Is this better than Wi-Fi?

So many industry players have committed to Wi-Fi — now standard in new laptops — that it's doubtful WiMAX will replace it in the near future.

Google is leading a free Wi-Fi initiative in San Francisco. Grand Haven's Azulstar recently was named the vendor for Silicon Valley Metro Connect — a municipal Wi-Fi consortium led by IBM and Cisco that includes several cities in and around Santa Clara and San Mateo counties in California — and beat out Clearwire for a municipal project in Winston Salem, N.C.

"Instead of one replacing the other, we'll probably see the two layered over each other," said van Houwelingen. The advantage of WiMAX is in its ease of deployment, he said, and suggests Wi-Fi is a stronger format for large bandwidth use, including HDTV, as well as for public safety and homeland security. Azulstar is targeting 10Mbps for use in emergency vehicles in Winston Salem, while Clearwire is offering 1.5 Mbps.

Also, Wi-Fi is driving the Intelligent Transformation Services program, the worldwide initiative to add information and communiation technology to transportation infrastructure and vehicles.    

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