Wednesday, December 03, 2008

Fixed terrestrial wireless supplanting DSL as interim premises broadband technology

When it was widely introduced starting nearly a decade ago, Digital Subscriber Line (DSL) was viewed by telcos as an ideal interim broadband technology on the road to Fiber To The Premises (FTTP) and a means to utilize their existing investment in copper cable plant over the last mile. But since telcos are many years behind where they should be in deploying FTTP, DSL became more of a permanent thoroughfare rather than temporary byway.

The problem is DSL has not been able to adequately fulfill that role due to technological limitations that restrict its range and require the use of near pristine copper that's in increasingly short supply as telcos' decades-old cable plants grow old and frazzled.

Now fixed terrestrial wireless is poised to take the place of DSL as the preferred transitional technology on the way to FTTP, starting in areas where DSL cannot due to its notorious handicaps. Over the past few years, a large number of mom and pop Wireless Internet Service Providers (WISPs) offering fixed terrestrial wireless via over unlicensed spectrum have sprung up, exploiting DSL's far more limited geographical reach and providing a faster and less costly connectivity than satellite Internet. The big telcos have also incidentally picked up some fixed premises customers with their mobile wireless 3G broadband offerings, but don't represent a threat to the WISPs due to high latencies and bandwidth usage caps.

The proliferation of WISPs as a substitute for DSL is evident in this blogger's area of El Dorado County, California where one, Central Valley Broadband, is offering 3Mbs service to telco neglected SOHOs (Small Office/Home Office) located in telco broadband black holes.*
* (See 1/23/09 update)

Telcos and to some extent cable providers have effectively ceded these areas to the WISPs, leading to increased competition among them. More competition among WISPs is also driving consolidation. Central Valley Broadband announced in October it had acquired two WISPs serving Placer and El Dorado counties.

Going forward, I expect WISPs to continue to provide a more flexible and robust pre-FTTP premises broadband option than DSL. Since it will likely be many years before most all premises have fiber optic connections, the WISPs appear set for a good long run.

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