WISP gets $35 million low interest loan from USDA, plans major expansion

One month ago, I blogged about Wireless Internet Service Providers (WISPs) sweeping into America's heartland where wire line broadband providers refuse to go. One of the WISPs, Stelera Wireless, rolled out service in Floresville & Poth, Texas using recently auctioned advanced wireless service (AWS) spectrum offering average speeds of 1.5-2 Mbps down and 350-380 Kbps for uploads. According to Stelera's CEO Ed Evans, the company is the first in the nation to introduce this technology in support of a wireless network purely focused on broadband services.

Stelera announced today it has received $35 million in low interest loan funds from the US Department of Agriculture that will allow it to expand to 55 towns and cities that have 20,000 or fewer inhabitants.

The WISP plans to use the capital infusion to expand to serve locations in Texas, Kansas, New Mexico, Colorado, North Dakota, South Dakota, Washington, Oregon and Arizona. Larger markets will be included as growth continues, the company said.

A major potential roadblock to the company's growth plans could present itself in the form of expanded wireless options offered by cell phone providers that provide throughput speeds in the same range as Stelera's. Stelera and other WISPs will have to offer significantly higher average throughput speeds -- in the neighborhood of 5 to 10 Mbs -- and solid connections if they expect to have a competitive market advantage over these services.

2008 a pivotal year for wireless broadband

The year 2008 will be a pivotal one that could mark the beginning of the end of the duopolistic hold the telcos and cable companies have over broadband Internet access marked by widespread market failure and lack of competition.

The Federal Communications Commission is set to make key decisions this year that determine whether broadband will be delivered over the air and provide the much needed wireless "third pipe" for broadband delivery starting in 2009.

The FCC is currently auctioning off portions of the 700mhz spectrum that could carry both mobile and fixed broadband services. The agency is also testing revamped prototype devices
developed by a consortium including Microsoft, Google, Dell, HP, Intel, Earthlink and Phillips that would transmit broadband signals at speeds reaching as high as 80Mps that would blow nearly all existing U.S. wireline broadband providers out of the water.

The White Spaces Coalition's prototypes failed the first round of testing last year. The coalition hopes to prove the prototypes, which transmit on unused portions of digital TV broadcast frequencies, won't interfere with TV signals.

FCC chairman hopes 700mhz auction will increase broadband access

Federal Communications Commission Chairman Kevin Martin has high hopes the 700 megahertz spectrum that will be left vacant when TV signals go all digital in February 2009 will "dramatically increase" wireless broadband service in rural areas.

Accordingly, Martin told the International Consumer Electronics Show in Las Vegas this week that the FCC will require companies that gain part of the spectrum in the FCC auction set for Jan. 24 to use and not just hold onto it. "We want to make sure that that's being put to use as quickly as possible. ... That's really going to be the ultimate test of [the auction's] success," the Seattle Times quoted Martin as saying.

AT&T offers fixed terrestrial wireless broadband

AT&T is now offering fixed terrestrial wireless "broadband" connections where it doesn't provide wireline-based Digital Subscriber Line (DSL) service in addition to reselling WildBlue's satellite Internet service.

According to a customer service representative I spoke with today, the service offers speeds of 400-700 Kbs down and 250-300 Kbs up for $59.95 per month plus a $99 installation charge which includes a computer adapter card interface. Not quite broadband in this blogger's definition of 1.5 Mbs and higher, but certainly better than dial up. Ma Bell is offering a 30 day trial period for new customers, who can cancel if the service doesn't live up to their expectations.

This development comes as AT&T increases its fixed terrestrial broadband presence, deploying WiMAX-based offerings in Alaska and in the former BellSouth territory it acquired earlier this year, as well as spending $2.5 billion to acquire additional wireless radio spectrum, according to this AP dispatch today.

AT&T's foray into fixed terrestrial wireless isn't likely to offer Ma Bell a competitive edge over Wireless Internet Service Providers (WISPs) who are moving to fill the many broadband black holes in locales like El Dorado County, California. Wireless broadband offerings by El Dorado County WISPs Remotely Located and Sierra Advantage offer a greater range of choices -- including significantly higher connection speeds -- that equal and exceed AT&T's fixed terrestrial wireless offering based on speed and price. The only way AT&T can hope to compete with these emerging WISPs is to battle them on the ground by upgrading its wireline infrastructure to allow it to reliably offer higher speed connections for comparatively lower prices. So far, there's no indication it's willing to make the necessary investment, leaving the market wide open for the WISPs.

Report: AT&T to ramp up fixed terrestrial WiMAX service in 2008

Last month, AT&T announced it began deploying fixed terrestrial wireless broadband service in Alaska as part of an initiative to test the service, which utilizes WiMAX protocol, in 22 areas of the United States. Eight of those became what the telco in August termed "active commercial deployments."

Quoting an industry source, Unstrung is reporting that Ma Bell will ramp up the service in the second quarter of next year, most likely in the southern U.S. where AT&T has preexisting licenses for using the 2.3 GHz band to provide the wireless broadband service as an alternative to DSL or cable.

Unstrung's analysis is taken in combination with the Alaskan rollout last month, this move into the lower 48 suggests AT&T might use the technology to provide better broadband coverage in areas where it has less wireline infrastructure.

FCC needs to get it right with wireless broadband

The Federal Communications Commission has to get the wireless "third pipe" of broadband Internet access right in order to inject meaningful market competition and consumer choice into the moribund, duopolistic market it has fostered with its wireline broadband policies, writes columnist Keith Girard of AllBusiness.com in The New York Times:

The FCC has made a mess of telecommunications policy. As FCC Commissioner Michael J. Copps noted recently, the nation is getting "too little broadband at too high a price."

Thanks to the FCC, Cable TV and telephone companies dominate the broadband market. They've basically skimmed the cream off the top by focusing on densely populated, easy-to-service areas. As a result, large parts of the country are underserviced. Only 31 percent of rural households and 41 percent of African American households have broadband service compared with 70 percent of households overall that have a computer, according to a new study by the Pew Internet Project, a nonprofit group. The same holds true for small rural businesses. They are less likely to use broadband services, in part, because of cost and lack of availability, according to several government studies.

California PUC proposes broadband build out rules, wireless broadband reporting requirement

The California Public Utilities Commission has issued draft rules implementing the state's Digital Infrastructure and Video Competition Act's build out requirements for telcos and cable companies wishing to obtain a state franchise to offer broadband-based video services.

The draft rules require franchisees to include "clearly stated build-out milestones " that "demonstrate a serious and realistic planning effort." In addition, franchisees must "clearly state the constraints affecting the build-out" and "clearly delineate and explain" areas within the franchisee's service area that pose "substantially higher" costs.

The CPUC declined requests by consumer groups to require franchisees to provide data on the broadband transmission technologies they use and throughput speeds. However, under the proposed rules, it would require franchisees to provide data on the extent it is utilizing wireless broadband technology.

"The State and the Commission have a strong interest in making sure that unserved or underserved areas gain access to broadband services," the proposed decision states. "We believe areas currently unserved or underserved by broadband at this point will likely
be rural areas, or other areas that are high cost due to distance, terrain, demographics and density issues. It is thus important that the Commission gather data that will help us understand the extent to which wireless broadband is reaching these difficult-to-serve areas, and the degree to which consumers view these services as a means to satisfy their on-line needs. Accordingly, we will require subscriber data relating to wireless broadband to indicate whether the subscription is for a data-enabled wireless phone, PDA or other wireless hand-held device, or whether the subscription is for the use of a wireless data card. Wireless data cards are capable of providing either mobile or fixed broadband access to the internet from a customer’s personal computer, and may effectively substitute for wireline broadband access. Data about the adoption by customers of wireless broadband access for use with their personal computers will help guide our policies aimed at increasing investment in broadband infrastructure and closing the digital divide in our State."

Silicon Valley startup's big plans for wireless broadband blocked by FCC

Over the past year or so, this blog reported on venture capital-backed Silicon Valley startup M2Z's big plans to build a nationwide broadband network that would serve 95 percent of the U.S. within ten years.

But M2Z claims the Federal Communications Commission isn't giving the idea a fair hearing and has taken the FCC to court, Dow Jones News Service reports.

Big WiMAX players unlikely to fill in broadband black holes

There's more evidence the big wireless players making WiMAX plays aren't going to fill in broadband black holes that commonly exist outside of heavily populated regions.

Some observers have held out hope that wireless providers would provide the long awaited broadband solution to less urban areas that are underserved by the wireline telco/cable duopoly. Instead, the big guys like Clearwire are concentrating on serving mobile consumers in big metro areas shown by this announcement today that Clearwire Sprint Nextel have signed a letter of intent to jointly construct America’s first nationwide mobile WiMAX network.

The key word here is "mobile." In short, that doesn't mean residential consumers who remain mired in broadband black holes across much of America. Their wireless option for now is going to continue to remain among the 1,500 or so small wireless Internet service providers (WISPs) that provide fixed terrestrial service.

That is unless a high powered coalition is successful in demonstrating a prototype service called white space broadband that would deliver wireless broadband over unused portions of the television broadcast spectrum.