Air War

Wireless Internet service is the latest player in the emerging high-speed Internet war

March, 2001

A year ago, Kalani Miller sat in a park four miles from his Pearl City-based home and surfed the Web by way of a wireless Internet connection to his laptop. And while it may have been a novelty back then, wireless connections are now the hot alternative method for achieving effective, high-performance Internet access. “The reason we started playing with wireless technology is because it gave us a lot more flexibility,” says Miller, vice president of Hurricane Internet, a local Internet Service Provider (ISP).

Increasingly, Web surfers in both the business and residential markets are complaining about lack of speed and the inability to connect. Hurricane Internet is hoping to resolve some of those issues for the residential and small business market, while another ISP, Highspeed.com, is targeting medium- to larger-sized businesses. “I think wireless Internet is an absolute future choice that people are going to demand,” says Jerry Stabile, vice president and regional manager for Highspeed.com. “There’s always going to be wires, we’ll always have fiber, but people will embrace this, because we are becoming a wireless society.”

And that we are. According to the Yankee Group, an e-business research and consulting firm, the number of total wireless subscribers worldwide is expected to reach 1.26 billion by 2005, up from 469 million at the end of 1999. In 1998 the Washington-based company purchased Hawaii’s fixed A-band license from the Federal Communications Commission. This gives Highspeed.com exclusive rights to all frequencies between 27.5 and 31.3 gigahertz.
It took the company roughly 14 months to build the infrastructure and install two rooftop antennas—one downtown at 1132 Bishop St., and the other at the Iolani Court Plaza—but in January, Highspeed.com signed on its first customer. SSFM International Inc., an Iwilei-based engineering firm, selected Highspeed.com as its ISP, after previously receiving a T-1 connection from Oceanic Cable. “We’re paying roughly two-thirds of the cost and getting double the bandwidth,” says Jesse Talbo, technology group manager for SSFM. Talbo says that he is impressed with the levels of speed SSFM is able to reach, but that the company has encountered some obstacles. “There’s still bugs in the services, and they have been working on it, but I can’t say that the stability has yet performed in terms of the service,” says Talbo. “Still, the initial week it was installed we had no problems and I was pretty impressed with the speed.”“It means that we can have more customers,” says Stabile. “Unlicensed bandwidths are the less expensive alternative, but they only have one frequency, 2.4 gigahertz, so everyone gets the same transmission. It could mean interference, lack of security. It might be the equivalent of trying to dial up and getting a busy signal.”

Stabile says the biggest problem he’s encountered has been getting rooftop access from landlords to install the individual antennas. The way it works is Highspeed installs smaller antennas, similar to the ones atop 1132 Bishop and the Iolani Court Plaza, on the roofs of its clients’ buildings. A cable connection is then made from the rooftop antenna to the clients’ central hub located somewhere in its office. All computers connected to the central hub then have wireless access to the Internet.

Highspeed has invested well over $12 million in its Hawaii operation, including the cost of the broadband license, hardware and set-up costs. According to Stabile, it will take the company roughly two years to see any return on investments. “If I get just 100 customers that means I’ll bring in revenues somewhere in excess of $9 to $10 million.”

Hurricane Internet’s Miller estimates that if people are as willing to jump on the wireless Web as he is to provide it, annual sales for the company should trickle past $1 million in 2001.

For $24.95 per month, Hurricane Internet customers are able to receive a wireless connection to their laptop or PC from anywhere within the designated service areas. The company’s initial coverage area is Kaimuki, Kapahulu, Punahou, McCully and parts of Waikiki. Miller says they do hope to expand coverage to the entire island by the end of the year.

Hurricane Internet’s services differ from Highspeed.com’s in that it offers unlicensed air space, which is not regulated by the FCC. “It’s a frequency that’s ubiquitous to everyone … anyone can use it,” says Stabile. “There are three of us deploying the same technology but we don’t compete with one another because we own different territories.”

The third company Stabile is referring to is Pacific DirectConnect, a local Internet Solutions Provider. The company provides “inter-connections” to the Internet for local area networks within a specific company. For example, Highspeed.com might provide a wireless connection to the Internet for a company, but within the office, Pacific DirectConnect would provide wireless connections between individual PCs and laptops. Pacific DirectConnect Chief Operating Officer Mike Browning says he sees flexibility and savings on the cost of re-wiring an office as the biggest benefits of that type of wireless connection. “Internally in an office, if they have a wired network they have to have specific locations for their computers,” says Browning. “With wireless they’re able to move wherever they need. It reduces the cost of having tenants wire up a facility only to move two years later.” In addition, companies that work on laptops are able to move about the office freely while still remaining on both the Internet and the network. John Tapper, Pacific DirectConnect’s vice president of sales and marketing, says that of the company’s 150 or so customers, approximately 25 percent have wireless connections.

According to Browning, national statistics say that 50 percent of organizations will move offices in the next year and a half. So he’ll continue to push the wireless connections, as will Highspeed.com and Hurricane Internet. Other Internet Service Providers, such as LavaNet Inc. President Yuka Nagashima, are keeping tabs on the service, but remain skeptical about the wireless connections. “It’s not in the interest of the people of Hawaii to have so many providers that every building is going to be filled with antennas,” says Nagashima. “Cable is solid, so it’s the most reliable in terms of having physical fiber, but there are expenses of owning or laying cable. So wireless is a good alternative but basically it’s still a young technology. We’ll have to wait and see what happens.”

 

 

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