Sprint Wireless Leaps Past Last-Mile Broadband Limits

Sprint Corp. Monday launched its
high-speed Internet service in Phoenix, Ariz. designed to deliver broadband
access to users over a fixed wireless technology.

Utilizing a multi-channel Multi-Point Distribution System, commonly known
as MMDS, Sprint (FON)
claims it will effectively offer broadband services to 85 percent of homes and small
businesses in Phoenix.

By taking to the airwaves, Sprint overcomes last mile delivery limitations
inherent to digital subscriber line distance restrictions and coax-bound
high-speed cable services. Because Sprint’s fixed wireless systems operate
over available radio spectrum, it is positioned to take on wired broadband
services nationwide.

Tim Sutton, Sprint Broadband Wireless Group president, said Sprint shatters
broadband service carriers stranglehold on the high-speed Internet access
market segment.

“The local regional Bell operating companies have had a 20-year monopoly on
the copper wire running to homes and businesses. AT&T and Time Warner (TWX)–< a href="http://www.aol.com/">AOL (AOL)
are building monopolies on cable routes. Only the wireless alternative will
open competition, spark new services and break the duopoly’s hold on local
customers,” Sutton said.

Sutton believes Sprint has a great opportunity to create a leadership
position in the Internet broadband race.

“With fixed wireless, we’re perfectly positioned to deliver broadband to
the masses and help close the digital divide between the broadband haves
and have nots,” Sutton said. “Sprint maybe able to reach customers in our
markets quicker than the competition and reach more of them in a more
cost-efficient manner.”

MMDS is not a new technology, but its utilization toward developing
high-speed Internet services is relatively young. It has been used to
transmit analog television signals for more than 30 years, but now MMDS has
been digitized and adapted to transmit data and Internet traffic.

Sprint currently maintains radio spectrum licenses in 90 markets, which
allows it to pass near to 30 million U.S. homes and 4 million businesses.

Sprint’s high-speed access programs, dubbed Sprint Broadband Direct, operates at
speeds comparable to DSL and cable modem services. Like conventional
broadband services the Internet connection is always on, so users don’t
have to dial into a modem bank. The technology is not constrained by shared
telephone lines to a home or coax cables.

Instead of phone lines or cable, Sprint transmits the broadband signals to
users over a small digital transceiver mounted to the roof or side of the
house. The device is bout 13.5 inches by 13.5 inches by 2 inches deep,
about half the size of a satellite dish.

Installation takes several hours and the basic $40 monthly home access
charge includes standard services, like six e-mail addresses, personal Web
page hosting for each e-mail address, and customer service through a
strategic partnership between EarthLink, Inc. (ELNK) and Sprint.

Sprint provides fixed wireless access to small businesses for $90 a month,
which includes setups for five workstations as well as full service ISP
amenities. Additional workstations can be connected for $5 a month.

Installation fees have been initially waived during the program launch.
Equipment costs vary with the term of service, ranging from $299 for the
month-by-month home access or business programs, to $99 when subscribers
elect to sign-up for a 2-year se

rvice agreement.

Sutton said that high-speed Internet services are just the first phase of
its fixed network deployment.

“We’re currently selling high-speed Internet service only, but next year
we’ll introduce a version of Sprint Integrated On-Demand Network (ION) that
runs over the wireless network,” Sutton said.

Sprint may also be quicker to market than wired broadband providers because
fixed wireless, unlike phone lines and cable access, doesn’t require
digging up city streets to install new cable or replace outdated, legacy
copper loops. Sprint’s fixed wireless network consists of installing a
transmission tower and deploying wireless modems at the customer’s business
or home.

Wireless transmitters are then mounted on towers to make the wireless
connection. Many markets already have towers built and Sprint can make use
of its networking agreements with more than 15,000 Sprint PCS towers across the
nation, giving it a competitive edge over smaller fixed wireless ISPs.

Each transmitter reaches customers in a 35-mile radius, so every home and
business with a line of sight to the transmitter should be able to get
broadband access. By circumventing the local RBOC’s infrastructure, Sprint
can offer broadband in areas that can’t get high-speed service through
phone lines or cable wire line connections.

Both Sprint and MCI WorldCom Inc. are
rolling out fixed wireless this year. MCI WorldCom (WCOM) owns 120 licensed markets in the U.S., when combined with Sprint’s
markets, the merged company could have a combined fixed wireless reach that
covers about 66 percent, or two-thirds of all households in the U.S.

Sprint’s Sutton said that a merged Sprint-WorldCom company could quickly
rival AT&T (T)
broadband services.

“We’ll have the nation’s biggest footprint in broadband wireless, and we’ll
have achieved it more quickly and inexpensively than the competition,”
Sutton said. “For example, AT&T has spent $120 billion to get their cable
properties, which cover about 29 million households. We’ll have over twice
that, and will have spent collectively only about $2.5 billion.”

“The merged company will be positioned financially and strategically to
break the stranglehold that Regional Bell Operating Companies have held on
the industry for a long time,” Sutton added.

Because Sprint’s fixed wireless has a potential to ubiquitously serve
remote and rural populations, the company is one of the key elements to
spanning the “Digital Divide” in the U.S.

In a speech to the National Press Club earlier this year, Bernie Ebbers,
WorldCom chief executive officer cited the importance of the combined
company’s ability to increase competition and overcoming local monopolistic
barriers to broadband services.

Ebbers announced that, within the year after the merger closes, the new
company would accelerate deployment of broadband wireless in rural and
under-served areas in the Southeast, Southwest, Pacific Northwest and Great
Plains states.

“It is the combination of the MCI WorldCom and Sprint assets that will
enable us to do this,” Ebbers said.

Sutton agreed that the combined assets of the two companies posed a
compelling argument for regulatory approval of the deal.

“There will be no divestiture of UUNET
nor Sprint PCS as a result of today’s wireless product launch,” Sutton
said. “Together, Spring and WorldCom would have the largest broadband
footprint in the world. It’s a compelling argument for the merger in that
consumers would benefit from the economy of scale the combined companies
could deliver.”

Even if federal regulat

ors block the MCI WorldCom-Sprint merger, Sprint
will have a large enough footprint to reach 30 percent of all U.S.
households. By the end of 2000, the Sprint expects to have deployed fixed
wireless services to between 10 and 15 cities. The next launch is scheduled
for Tucson, Ariz.

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