Why have one big wireless ISP when you can have hundreds of small ones?
That’s the question NuTel Broadband Corporation of Cranbury, New Jersey seems to be answering. The company wants to create partnerships with existing ISPs — or just entrepreneurial individuals or businesses — who think their town or suburb deserves better broadband.
“We’re talking to small to medium communities, looking at each of them as individual operating entities — each gets its own company,” says Joe Fiero, CEO of NuTel. “We’re the managing partner; they’re the operating partner.”
That partnership breaks down into NuTel handling everything on the back end, from billing to support, while the operating partner pays for and installs the equipment (mesh products from SkyPilot Networks) to NuTel’s specifications. The local operator owns the relationship with the customer and gets paid by NuTel for running things out of what customers get billed.
“Big telecoms don’t have people that do stuff with roof antennas and then go back to the office to make sure the bills are paid — that kind of work is holding back the WISPs in this country,” says Fiero. “The day-to-day work supersedes the longer term needs.”
NuTel’s business model calls for working with providers or potential providers in any under-served Tier 2 to 5 market, which they define as the suburbs out to the small towns. NuTel and these potential partners will go through the due diligence of seeing if they’re right for each other, then seeing if the location in question is viable. From there, NuTel has to get backhaul to the location, usually via fiber or wireless microwave equipment (eschewing any big telco line leasing). Then it can install a SkyPilot unit with a wired connection, followed by as many additional SkyPilot products as needed to build out the wireless coverage.
“I’m looking for partners, not installers,” says Fiero, but he acknowledges that most partners need to be from backgrounds with the “know-how to run a wire,” such as alarm systems or satellite television.
“While most [businesses in this space] look to have a no-truck-roll model, we think that is needed to ensure a quality signal,” Fiero says. “We want to know we have the signal to each subscriber. To do that, you need to have guys who aren’t afraid of that —they have the trucks, the ladders, the wrenches and the drills.”
SkyPilot offers SkyConnector units about seven inches tall that act as customer premises units (CPEs) to extend the mesh. The SkyConnectors may help with a major facet of the business model: mounting the mesh equipment on private property.
Most networks of this nature require installation of equipment on locations like light poles — usually owned by a municipality. The deployment of SkyPilot products by NuTel’s operating partners won’t require any right of way, because they will apparently be asking (or requiring) customers to allow installation on their premises. He didn’t want to go into it, but Fiero says, “It’s not a trade secret or anything, but the methods we’re using are on the ‘different’ side.”
“SkyPilot equipment will give us quite a bit of flexibility,” Fiero says. “We can deploy as a simple system and grow it… If I need additional capacity, I put one up at another point in town. I don’t have to reorient a single antenna. If we need to add 10 access points, we can.”
NuTel has 8 to 10 operating partners lined up already — each is its own limited liability company (LLC) —and expects it could reach 200 partners by the end of 2007. This potentially nationwide network is not, however, looking to compete with municipal networks (a business Fiero doubts will ever work) or even citywide Wi-Fi from third party providers. It wants to provide service where cable and DSL broadband is scarce, if not wholly unavailable.
NuTel doesn’t want to be just a WISP, either — it wants to be the phone company too. A base package of high-speed Internet access at 1.5 Megabits per second (Mbps) coupled with a voice over IP service would cost about $60 a month. A simple dial-up replacement Internet connection could cost as little as $15 a month for 200 Kbps. Higher end packages will be available for multiple lines, businesses, etc.
“You’d be surprised at the number of small to medium sized factories in one-horse towns — the horse being the manufacturer where 40 percent of the people work,” says Fiero. “They have decent bandwidth requirements and have been subject to the whims of incumbents for years. We think we provide a true alternative.”
The company says it has better VoIP service than providers like Vonage because it’s not using the Internet connection separately, since each customer gets a direct connection back to NuTel’s network operations center (NOC) in Atlanta.
Where will these one-horse towns be found? To start with, they’ll be close to NuTel’s network hubs in St. Louis, Missouri and Sacramento, California (not in those cities, of course, which are well-served with broadband or even with some free Wi-Fi networks), as well as in parts of Ohio, Arkansas, Pennsylvania (in south Pittsburgh) and on the Minnesota/Wisconsin and Texas/New Mexico borders.