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The February 23, 2003 Issue Provided by System Dynamics Inc.
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In This Issue


Heard on the Net

News about People and Companies Influencing The Broadband Home


People News

Andrew Audet was named CEO of Lemur Networks, a provider of business support systems for on-demand IP services delivery. Audet most recently was president and CEO of Chinook Communications. ( www.lemurnetworks.net )

Jeffrey Crosby was named VP of marketing for set-top products at Conexant Systems. Crosby was previously senior VP of DirecTV. ( www.conexant.com )

Tony Fallows was named VP of product marketing at Riverstone Networks. He was previously general manager and pre-sales director for EMEA. ( www.riverstonenetworks.com )

Norm Farquhar has joined Magis Networks as its CFO. Prior to joining Magis, he was CFO of AirPrime, Inc. ( www.magisnetworks.com )

George Hillier has become VP of Sales at Ucentric, joining the team focusing on network operator customers. Prior to Ucentric, Hillier was at OpenTV. ( www.ucentric.com )

Bjorn Kirchdorfer has joined Navini Networks as EVP of Commercial Operations. Previously, Kirchdorfer was a Vice President with IP Wireless ( www.navini.com )

Mark Laubach has become President and CEO of Broadband Physics, Inc. which is the new name taken by Rainmaker Technologies. ( www.broadbandphysics.com )

Steve Libbey has joined Cedar Point Communications as Regional VP, Sales. Libbey most recently was sales VP with ADC Broadband. ( www.cedarpointcom.com )

John Muleta has become chief of the FCC Wireless Telecommunications Bureau. Muleta was previously president and CEO of Source 1 Technologies. ( www.fcc.gov )

Carl Russo has become President and CEO of Calix, an access platform supplier to local exchange carriers. Prior to Calix, he was group VP of optical networking at Cisco Systems ( www.calix.com )

Peter Schultz has joined ICTV as director of solutions marketing. Schultz was formerly with Liberate Technologies. ( www.ictv.com )

Solomon Trujillo has been named CEO of France Telecom's Orange SA unit. Trujillo had been Chairman of US West until the completion of the merger with Qwest. ( www.francetelecom.com/en )

John Vaughan has become CEO of Syndeo. He most recently served as CEO of Cinta Networks. ( www.syndeocorp.com )


Company News

--Acquisitions

Alcatel has completed a deal to acquire iMagic TV for approximately $30 million. Alcatel previously owned 16 percent of iMagic TV, which develops software for delivering multi-channel TV and interactive video services over broadband networks. ( www.alcatel.com ) ( www.imagictv.com )

Alcatel is partnering with IPWireless to serve mobile operators who want to complement their GSM/GPRS and WCDMA service offerings with TDD broadband wireless services. The solution is especially suitable for coverage of "hot zones" such as dense business areas. The IPWireless solution delivers data rates of up to 3Mbps (1.5Mbps in a 5MHz channel) direct to users' laptops or PCs via a PC card. ( www.alcatel.com ) ( www.ipwireless.com )

Alvarion Ltd has agreed to acquire InnoWave ECI Wireless Systems Ltd. for $9.7 million in cash, and will grant warrants for purchasing 200,000 Alvarion shares over 5 years at $3 per share. ( www.alvarion.com ) ( www.innowave-ws.com )

Anderson Merchandisers, the music distributor for Wal-Mart, is buying Liquid Audio's digital music fulfillment business for $3.2 million, through their affiliate, Geneva Media, LLC. The NY Times reported that "Anderson, based in Knoxville, Tenn., hopes to distribute music downloads through the Web sites of retailers, including Wal-Mart, though no deal has been worked out yet." ( www.amerch.com ) ( www.liquidaudio.com )

Andrew Corporation plans to acquire rival Allen Telecom in an all-stock transaction valued at $500 million. ( www.andrew.com ) ( www.allentele.com )

Apax Partners, the Goldman Sachs Group and Providence Equity Partners have grouped together to buy six regional cable-television networks from Deutsche Telekom for €1.725 billion. The price is significantly less than Liberty Media previously had agreed to pay, before it was blocked by German regulators. ( www.apax.com ) ( www.gs.com ) ( www.provequity.com ) ( www.telekom.de )

Firstnet has bought out Liberty Broadband, a UK fixed wireless operator previously known as Tele2 UK Ltd, for an undisclosed amount. Firstnet is promoting their service by recruiting local "broadband champions" to co-ordinate campaigns in areas desperate for broadband Internet access. ( www.firstnet.net.uk ) ( www.libertybroadband.co.uk )

Microsoft has agreed to acquire privately held PlaceWare Inc., a provider of Web conferencing services. Terms of the agreement were not disclosed. ( www.microsoft.com ) ( www.placeware.com )

Tollgrade Communications, Inc. has purchased the Cheetah status and performance monitoring product line of Acterna, LLC. for $14.3 million in cash, plus certain liabilites. Tollgrade plans to consolidate the Cheetah product with its Lighthouse status monitoring system. ( www.tollgrade.com ) ( www.acterna.com )

--Funding

Akustica, a provider of acoustic system-on-a-chip solutions has obtained an additional $2 million in funding, to bring their Series A total to $4.5 million. ( www.akustica.com )

Airespace, formerly called Black Storm Networks, has raised a total of $15.5 million from leading Silicon Valley venture capital firms for their development of wireless LAN infrastructure. ( www.airespace.com )

Calix, a supplier of access platforms for wireline carriers, obtained $50 million additional in venture capital funding. ( www.calix.com )

Echo, a consortium of the six largest music retailers, has been formed, with each company owning an equal stake. The participating retailers are Best Buy, Tower Records, the Virgin Entertainment Group; Wherehouse Entertainment; Hastings Entertainment; and Trans World Entertainment. Echo will sell music that can be downloaded from the Web, using either individually branded or an Echo co-branded identity. ( www.echo.com )

HelloSoft, a provider of semiconductor communications software IP for multifunction devices and equipment, raised $11 million in its Series A round. The company focuses on technologies such as 2.5G/3G wireless, wireless LAN, voice-over-packet, digital subscriber line, and Bluetooth. ( www.hellosoft.com )

IceFyre Semiconductor, a semiconductor start-up focused on low-power, high-performance WLAN products, announced the closing of $19 million in Series C funding. Motorola and Covington Capital co-led the round, which also included new investor TD Capital Technology Ventures and all existing investors. ( www.icefyre.com )

Icera Semiconductor, a fabless semiconductor designer, said it has raised $10 million in Series A funding. ( www.icerasemi.com )

Ikanos Communications has received $30 million in its Series D funding. They will use the new capital to support volume shipments of their VDSL-DMT chipsets, initally targeting the Asian market. ( www.ikanos.com )

Magis Networks has received an investment from ViewSonic, which joins AOL Time Warner, Hitachi, Motorola, Panasonic, and Sanyo in Magis' $48 million Series B round. ( www.magisnetworks.com )

VoiceRamp Technologies, which develops a software platform for broadband access and existing switching networks, raised $7.8 million in Series A financing. ( www.voiceramp.com )

--Other News

3Com Corporation and Infineon Technologies AG entered into an agreement that assigns 3Com's rights to certain patents related to Ethernet over Digital Subscriber Line (DSL) to Infineon. 3Com received an undisclosed fee and will receive a portion of Infineon's future licensing royalties. ( www.3com.com ) ( www.infineon.com )

America Online is offering their broadband subscribers free access to CNN's NewsPass subscription content as part of their strategy to leverage company content to grow and retain their broadband users. Other Internet users pay $4.95 monthly (or $39.95 per year) for video news and sports and more. In other news, AOL has suspended their iTV offering due to poor sales, although continuing to support those who have subscribed; the service allowed subscribers to surf the Web and send email from their TV using a set-top box and wireless keyboard. ( www.aoltimewarner.com ) ( www.cnn.com/NewsPass/landingpage/ )

Allot Communications, a provider of policy-based networking solutions, announced a partnership agreement with NextNet Wireless and an OEM agreement with Alvarion, both broadband wireless access (BWA) solutions providers. BWA providers are seeking to provide both QoS and bandwidth management as part of their customer solutions. ( www.allot.com ) ( www.nextnetwireless.com ) ( www.alvarion.com )

BellSouth, which had been offering a trial VoIP phone service called DSL Talking, has withdrawn the service. Customers who signed up can continue the service directly with the supplier, Vonage. Vonage offers service in over 115 area codes, in 28 of the top 50 US media markets. ( www.bellsouth.com ) ( www.vonage.com )

BSkyB reported quarterly net subscriber growth of 244,000 to bring their total to 6.6 million subscribers. Their operating profit increased 126%, their revenues increased and their churn fell. ( www.sky.com )

Celite Systems has announced their service that enables phone companies to turn on broadband service one neighborhood at a time. The company says its technology blends the best elements of standard DOCSIS cable modem technology with the best elements of standard VDSL technology. ( www.celitesystems.com )

CinemaNow, a VOD distributor of feature films over the Internet, announced a licensing agreement with Media Design Institute, a Japanese and American based multi-media company, to distribute the CinemaNow film library in Japan through NTT-DATA, Japan's largest systems-integrator. The CinemaNow site includes instructions for users on how to hook up their PC to their TV. ( www.cinemanow.com ) ( www.nttdata.co.jp/en/ )

Comcast has launched SeaChange’s Recording System technology that blends PVR and VOD. ( www.comcast.com ) ( www.seachangeinternational.com )

Global IP Sound, a voice processing technologies provider, and Pocket Presence, a provider of wireless communication software, announced availability of the Running Voice IP wireless softphone solution on PDAs like the HP iPAQ Pocket PC. The demo illustrated quality real time voice communication over an 802.11 wireless network. ( www.globalipsound.com ) ( www.pocketpresence.com ).

InnoMedia announced its partnership with India's TATANET, to offer IndiCall, a VoIP-based long distance telephone service. Users place Internet calls from India to any regular phone or cellular phone through Innomedia's InnoSphere network that provides service to over 200 countries. Internet telephony was deregulated in India in April 2002. ( www.innomedia.com ) ( www.tata.com )

Intel announced their "Statesboro" Digital Home reference and concept platforms, and new UPnP tools at the Intel Developers' Forum. Intel's focus is on creating tools that enable PCs to distribute digital media to consumer electronics devices throughout the home. The reference platform is a complete system solution to assist OEMs in developing new PC systems that broadcast digital photos and music to TVs and stereos. Intel also showcased PC features expected in 2004 such as wireless streaming video and personal video recording. (See "Intel Inside" Means Music and Media Too in BBHR October 8, 2002.) ( www.intel.com ) ( www.bbhcentral.com/report/backissues/Report0209_5.html )

Linksys announced the sales of over 100,000 Wireless-G products in North America since products began shipping on December 24, 2002. Linksys expects to ship more than 500,000 Wireless-G products during the first quarter (Q1) of this year. Linksys also announced licensing new hardware and software technologies from Intel to expedite the delivery of Wireless Digital Media Adapters to distribute PC and Internet content to TVs and stereos throughout the home. This new media adapter will connect to any television or stereo using standard A/V cables. The product, targeted to cost less then $200, is scheduled to be introduced in Q2 2003. ( www.linksys.com ) ( www.intel.com )

Navini Networks launched its new PCMCIA wide area wireless broadband card which enables mobile data users broadband access anywhere in the coverage area. ( www.navini.com )

Philips Electronics announced their wireless broadband residential gateway reference design that supports both 802.11b wireless LAN and DECT cordless phone standards. The design supports development of broadband routers and gateways providing wireless data communications and cordless Voice over IP via a single broadband connection. ( www.philips.com )

Private Media Group Inc., a provider of adult material, announced their broadband VOD service. ( www.prvt.com )

Radvision has introduced a multimedia gateway supporting video telephony between 3G-324M cell phones and IP and/or ISDN-based video systems using the 3G-324M standard. NTT DoCoMo is using the Radvision gateway as part of their real-time video communication platform that enables interworking with 3G mobile communications; after the trial service, they plan to begin a commercial service by September 2003. Alcatel also announced its collaboration to add RADVISION's new viaIP gw-P20/M Gateway into its solutions for the 3G/UMTS marketplace. ( www.radvision.com ) ( www.nttdocomo.com ) ( www.alcatel.com )

Samsung and Arcturus announced a partnership and delivery of a complete reference system for designers of Residential Gateways, SOHO networks, Internet Attached Devices (IAD) and convergence equipment. ( samsungelectronics.com ) ( www.arcturusnetworks.com )

STSN, a provider of broadband communications to hotels, has signed 70 additional hotel property owners over the last four months, bringing to over 500 the number of hotel properties served in the US, Canada and Western Europe. They also continued to expand "hot spots" to about 50 percent of its customer base in the last eight weeks, and say overall buy-rates have more than doubled in the last 12 months. ( www.stsn.com )

U.S. Robotics and Jungo Software Technologies announced that Jungo's OpenRG residential gateway software will provide the core software infrastructure for a new range of U.S. Robotics' SOHO and home networking products. ( www.usr.com ) ( www.jungo.com )

Wi-LAN Inc. announced that the IEEE "WirelessMAN" Standard 802.16a, incorporates their W-OFDM (Wide-band Orthogonal Frequency Division Multiplexing) technology. Wi-LAN has a non-exclusive agreement with Fujitsu Microelectronics America to develop Standard 802.16a System-on-Chip solutions. ( www.wi-lan.com ) ( www.fujitsumicro.com )

Yahoo signed a deal with BT Broadband to offer bundled premium services to high-speed customers. The service is due to be available this spring. Pricing has not been announced. Yahoo is trying to sell content services both in bundling deals wih service providers and as unbundled content to other broadband users. ( www.uk.yahoo.com ) ( www.bt.com/broadband )

--Standards, Certifications and Interoperability

The IEEE approved 802.16a, for wireless metropolitan-area networks. The amendment covers "Medium Access Control Modifications and Additional Physical Layer Specifications for 2-11 GHz" and includes both licensed and license-exempt bands. Wireless MANs are supported by the WiMAX Forum, a coalition which promotes deployment and certifies interoperability between products based on 802.16 standards. ( www.ieee802.org/16 ) ( wimaxforum.org )

--Regulatory

The US Federal Communications Commission ruled on Unbundled Network Elements (UNEs) that state regulators will have more control in determining which portion of local phone networks will be available for rivals to lease and at what wholesale rates. They also ruled that incumbent providers don't have to share new fiber to the home or neighborhood, and that existing copper lines need be shared with high-speed Internet competitors only if these companies will also offer voice services. [Editors comment: To our eye this looks like it's on the right track toward "old wires, old rules; new wires, new rules" -- see BBHR 11/14/01.] ( www.fcc.gov ) ( www.broadbandhomecentral.com/report/backissues/Report0111_4.html )


Briefly Noted

As the year gets underway, several market analysts and researchers have issued reports and predictions for broadband's future. Here are a few:

Strategy Analytics projected the installed base of US residential broadband subscribers will grow from today's 17.9 million homes to 25.3 million by year end 2003, a more than 40% increase. Their breakdown by technology employed predicts that 16.1 million homes will use cable modems, 7.9 million will use DSL connections and 1.3 million will use other, less established, technologies. Their end of 2008 prediction is 64 million broadband subscribers, or 59 percent of all US homes. ( www.strategyanalytics.com )

Strategy Analytics also issued European statistics and projections, showing 12 million European homes (7.5% of households) now having broadband Internet. Their 2003 projections call for 7.2 million European homes acquiring broadband for the first time during 2003, bringing the total to 19.1 million households. Although in 2002 a growing number of customers chose ADSL providers over cable, they expect cable operators will increase their share of net new subscribers to 25 percent, while ADSL's share will fall to 71 percent. The European 2008 projections is for 38% of European homes to have broadband services. ( www.strategyanalytics.com/press/pr00035.htm )

IDC released its top 10 predictions for the Information and Communications Technology (ICT) market in the Asia/Pacific region for 2003. Two of these were:

  • "Wireless LANs will gain traction. Continued demand from the enterprise segment as well as proliferation of 'hotspots' will drive growth in the coming year. "
  • "Online gaming will emerge as a killer application that will drive demand for broadband services in the region." Their statistics show that online gaming is more popular than electronic commerce among Internet users in the Asia-Pacific: in China and Malaysia, gamers outnumber e-commerce users by a ratio of two to one. ( www.idc.com.sg/Press/2003/AP-PR-predictions.htm )

Regional News

Australia: Telstra announced $4.6 million in funding through its Telstra Broadband Fund, to encourage development of new and innovative technologies and applications in Australia. Nineteen applicants will benefit during the first round of funding. ( www.broadbandfund.telstra.com/?tR=3m )

UK: The UK Government will be auctioning off licenses for wireless broadband in May. Licences will be made available for the 3.4GHz radio frequency at speeds of up to 2Mbps over a range of 10km. A consultation will also determine if a licence for 3.6GHz should also be offered. The reserve price of the licences has been set at £300,000 for Greater London, Midlands and Northern Metropolitan areas and £100,000 elsewhere. The British government has also announced plans to make the 5GHz spectrum band licence-exempt to assist the growth of broadband. This will allow deployment of wireless hot spots based on 802.11a thereby increasing the speed.

Also in the UK, Oftel published new customer research which showed that awareness and use of broadband services continues to grow:

  • 84 per cent of UK Internet customers are now aware of broadband services and the benefits they can offer compared to just over 50 per cent in February 2002.
  • One in ten UK homes with Internet access use broadband services and the UK now has over 1.4 million broadband users. ( www.oftel.gov.uk/press/releases/2003/pr03_03.htm )

Spain: El Pais reports that Julio Linares, chairman of the Spanish division of Telefonica, said that they will not reduce the price of their ADSL internet service since there was already sufficient growth in client numbers. However, the Spanish internet users association (AI) has pledged to use all means necessary to force reduction of the consumer price (currently 39.07 euros a month), given that business clients pay only 22 euros. ( www.telefonica.com )

Italy: Three regional operators that were recently awarded 26GHz licenses have now deployed Broadband Wireless Access (BWA) solutions based on Alvarion's technology. They were the first of the 11 regional and 3 nationwide operators granted licenses in August 2002. ( www.brennercom.it ) ( www.infracom.it ) ( www.wireless2000.it ) ( www.alvarion.com )

EC: The European Commission (EC) held "Broadband Day" Jan. 28 in Brussels to promote the widespread availability and use of broadband Internet access across Europe. Broadband initiatives at the EU level are channeled through the eEurope Action Plan, which hopes to achieve widespread availability and use of broadband throughout the Union by 2005. ( europa.eu.int/information_society/eeurope/ )

Canada: Canadian ministers announced $2.4 million for 89 recipients of first-round funding for broadband business plan development. The funds were allocated as part of the $105-million Broadband for Rural and Northern Development Pilot Program. The applicants will develop business plans outlining how each community would use broadband Internet service. Each applicant received up to $30,000 to develop business plans to be submitted by May 22, 2003, to compete for implementation funding. ( broadband.gc.ca )

Also in Canada, the provincial government of Ontario launched an investment program aimed at improving high-speed telecommunications in rural and northern Ontario. The Connect Ontario: Broadband Regional Access (COBRA) program includes $55 million in funding over the next three years. At least half the capital for broadband projects will have to be provided by participating communities through federal-level Canadian government programs or public-private partnerships. ( www.ontario-canada.com/ontcan/en/rts/rts_connect-ontario_broadband.jsp )

US: The new Rural Broadband Loan and Loan Guarantee Program has made available $1.4 billion in loans and loan guarantees to provide broadband services in rural communities for FY 2003. The loans are targeted at communities with populations up to 20,000. The Rural Broadband Coalition and WCA/LEA Rural Broadband Task Force websites provide rules and information. ( www.usda.gov/news/releases/2003/01/0028.htm ) ( www.ruralbroadbandcoalition.net ) ( www.wcai.com/rural/index.htm )

Also in the US, NTIA pledged active U.S. government participation in the global effort, known as "ENUM", to match phone numbers with Internet addresses. ENUM would enable U.S. citizens to communicate both voice and text messages through one single identifier, either a telephone number or an e-mail address. ( www.ntia.doc.gov/ntiahome/press/2003/enumpr_02122003.htm )


Broadband Anywhere: Focus on Wireless

We've spent considerable time investigating wireless connectivity inside and outside the home, and want to provide an update on what we see as the increasing momentum toward "wireless anywhere". This article focuses on the technologies and services for providing broadband beyond the range of Wi-Fi networks. The following article covers the emergence of 802.11g as the new standard for wireless networking in the home.

As more homes have multiple computers, including laptops, a rapidly-increasing number are being equipped with Wi-Fi networks. As people get used to having broadband connections and mobile devices, they start wishing they could have broadband wherever and whenever they want it.

People might want to use broadband in lots of places: at work; at home; in public places like hotels, airports, and coffee shops; outside buildings; and in cars, trains and planes. Many companies are working on a wide variety of technologies and services to make broadband available at all of these places.

"Broadband anywhere" is the objective -- just like using your mobile phone almost anywhere is now taken for granted.


"Inside Out" With Wi-Fi

There are two broad ways to approach "broadband anywhere". One is to extend wireless local area network (WLAN) technology to cover wider spaces inside and outside buildings: we call that the "inside out" approach. The other is to extend wireless metropolitan area network (WMAN) technology to reach into buildings - we call that "outside in". Many companies are working on these approaches; we believe both will play a role.

"WiFi Everywhere"

"Wi-Fi" is key to the "inside out" approach. The technology is very inexpensive and has become so popular that the word "Wi-Fi" has been picked up by the popular press and often misused as a synonym for "wireless".

"Wi-Fi" refers literally to The Wi-Fi Alliance, a nonprofit trade association formed “to certify interoperability of wireless Local Area Network products based on the IEEE 802.11 specification”. It is also used as shorthand for “Wi-Fi Certified” to refer to products which have passed the Alliance’s interoperability tests.

Sandy in our garden with notebook PC and Wi-Fi --> Click for larger pictureThe original "Wi-Fi" designation was for lower-speed 802.11b products; it has been extended to include higher-speed products based on the 802.11a standard and will be further extended to 802.11g when that draft standard is ratified later in 2003.

The 802.11 technology covered by the "Wi-Fi" designation was developed as a WLAN technology designed to cover a building. It operates in unlicensed frequency bands with low power and has a relatively short range. The WLAN usually connects to a wireline for broadband access - typically T1 or DS3 to an office, cable modem or DSL to a home.

Hotspots, Hot Zones and Community Networks

Wi-Fi being installed at Red Carpet Club --> Click for larger pictureAccess point at United Red Carpet Club --> Click for larger pictureAs Wi-Fi equipped notebook computers and PDAs continue their rapid growth curve, companies are focusing attention on providing wireless services outside the home. One approach is to provide Wi-Fi "hotspots" in public places, and extend the hotspots so a series of them form a "hot zone".

Seattle Wireless logo --> Click for larger pictureContinuing to expand these areas is one way to start covering a larger area and some are working on "community networks". However, the low power and contention within unlicensed bandwidth by multiple sources suggests this may be a difficult model to scale. The growth and expansion of Wi-Fi from a home to a neighborhood to a metropolitan area looks like the waves coming out from a stone thrown in a pond--they are rings of increasing width which fade out as they get farther from the center point.


"Outside In" with Metropolitan Area Networks

A wireless metropolitan area network (WMAN) approaches the problem a different way. These technologies provide wireless broadband services from a tower to buildings and to the streets around them.

Several companies offer technologies specifically for "fixed broadband wireless" designed to provide broadband service to communities not served by wireline services. Some, based on low-cost 802.11 technologies, are suited for smaller areas and light usage; others are proprietary. Most require a "line of sight" (LOS) from the base station tower to the individual home, and use an outdoor antenna at the home pointed to the base station. Some use "mesh networks" to route data from one home to another until it reaches the base station.

Phone companies have been on a quest to extend their coverage from the narrowband voice world to the broadband data world, and have made huge expenditures on spectrum in which to offer so-called "3G" services capable of significantly broader bandwidth than today. 3G technologies with names like WCDMA and EVDO continue to be developed and have been deployed in some places. However, some now believe that these "traditional" technologies will provide only limited bandwidth at a high price, and that other approaches may be more appropriate for wireless broadband data -- especially for the consumer market.

A new group of young companies has been focused on developing technologies to cover wide areas, just as cellular can do, but starting from the premise that they are being designed to carry broadband data -- and that voice is just another data type which will be accomodated. These technologies aim to provide true broadband with data rates of 1-2 Mbps to many simultaneous users at prices comparable to wireline broadband. They typically are "non line of sight" (NLOS) and capable of penetrating trees and walls to reach into buildings. They are usually targeted to notebook PCs and PDAs, use a small modem or PCMCIA card, and are customer installed. They generally operate in licensed spectrum. A few of these technologies are based on 3G; most are not.

Although still in the early evolution stages these technologies appear to be proving themselves in market trials and some are now moving to deployment. Here are some recent developments:

  • Clearwire has started commercial service in Jacksonville, Florida using technology from IP Wireless. While focused on "areas of Jacksonville where DSL and cable service are not available" the technology also appeals to many people because it is portable and can be used anywhere, not just at home.
  • Navini Networks and IntroWeb are deploying one of Europe’s first NLOS broadband networks, starting in eastern Holland and then expanding to the northern region of The Netherlands. Navini’s Ripwave™ system provides "untethered broadband access anywhere in the coverage area." IntroWeb will initially offer high-speed data services to primarily residential customers who live in townships of 2,000-10,000 people and also to small-to-medium sized businesses.
  • Nitin Shah of Arraycomm explaining iBurst --> Click for larger pictureArrayComm successfully completed the first stage of their i-BURST Personal Broadband System trial with Korean telecommunications operator KT. Additional KT evaluation plans include using multiple cell sites in a dense urban environment in the first half of 2003. The evaluation is being held in advance of Korea's development of services in the 2.3 GHz frequency band, with key spectrum usage decisions expected later this year. (We wrote about CKW Wireless, Arraycomm's service consortium in Australia, in BBHR 12/17/02.)
  • Flarion Technologies and Hanaro Telecom are also conducting field trials of wireless broadband in Korea. Hanaro is seeking to develop a combined wireless and wireline service which will allow residential customers to be able to use broadband Internet both inside and outside of their homes; it deploys multiple broadband last mile access technologies to ensure rapid rollout in high-density areas while preserving access speeds and minimizing coverage overlaps as well as capital expenditure.

The IEEE is busy formalizing standards for these metropolitan area broadband technologies. IEEE 802.16 focuses on fixed wireless, and has recently completed final approval of several standards. IEEE 802.20 has just been formed to focus on mobile applications.

These WMAN technologies can be used over a wide area and in a moving car; they can also be used at a coffee shop or at your home if that is within range. We call this the "outside-in" approach for "broadband anywhere".


Room For Both

At the moment, the "inside-out" approach appears to be ahead because of economies from the high volume of Wi-Fi equipment and the enormous hype in the press. The "outside-in" technologies are potentially disruptive to existing players in hot spots and wireline broadband. Once deployed over large areas, they could make hot spots and wireline broadband access redundant.

We do not believe that one approach will wipe out the other. Each is likely to find a zone in which it operates most effectively and is the most cost-effective for its application. We believe there will be increasing integration by operators of systems which use both WLAN and WMAN technologies with handoffs between them based on the user location and movement. Several WMAN companies have announced seamless hand off between Wi-Fi inside and near a building to their WMAN technology outside.

Where there are dense aggregrations of people and users - especially in and near buildings -- it's likely that wireline to the building and wireless in and around it will make the most economic sense. Further away from buildings, or in areas with low population density, pure wireless makes the most sense.

In the short term, because the efforts related to Wi-Fi and WLAN technologies are typically handled by different units of companies than the WMAN technologies, users are likely to see a wealth of choices -- with lots of overlap and confusion. For the companies, it may result in duplicate spending and resources. We expect this to settle down over time.


Things to Watch

Broadband wireless is in its infancy, and there are more questions than answers at this point. Here are some things we're watching:

  • The WMAN trials and launches are important both as a wireless competitor to wireline broadband services and as providers of broad coverage of "broadband anywhere".
  • The new fixed wireless technologies enable penetration of markets in which wireline companies find it difficult to cost-justify deploying wired technology. Many companies are working to provide broadband services to previously "unserved" and "underserved" makets. Kyle Ackerman says that many people are unwilling to compromise between the places they want to live and raise kids and the places they work; his company Xtratyme provides broadband wireless services to their homes.
  • These technologies provide a great opportunity for wireline companies to fill market gaps. Many telephone companies -- including Verizon, Sprint and BellSouth in the US -- are experimentlng with many flavors of these offerings and are already running trials to see if they are cost effective and reliable for consumer broadband services.
  • Broadband wireless cuts across all aspects of these companies. Different parts of these companies are charged with different aspects of satisfying customer needs - the wireline groups see wireless as a logical extension of DSL, while the wireless groups see broadband data as a logical extension of voice services.
  • We expect to see cable companies pay more attention to broadband wireless. Several wireless technology and service providers have expressed an interest in helping cable companies deploy these services.
  • The "hot spot" business is just getting started, with several large entrants. Most seem directed to the business-traveler market. We question whether consumers will have a high willingness to pay for these services, and wonder whether hot spots represent a stand-alone business or an incremental service as part of a broader communications offering.
  • Korea is especially important. It has the world's highest penetration of wireline broadband services. Wi-Fi and 3G are already being deployed, and many carriers are working out how to integrate wireless and wireline service offerings. Several carriers are working with the newest technologies from Flarion and Arraycomm.

Conclusions

Wireless broadband technologies are all in their infancy, and the applications are largely unknown. People's behavioral habits always adapt slowly to the availability of new capabilities.

We believe the end game is unlikely to be dominated by one technology. The outcome will be determined by the economics of various technologies, the development of popular applications to drive volumes, and consumer willingness to pay for these applications.

It's too early to predict the outcome, but it's fun to watch the game.

( www.wi-fi.org ) ( www.clearwire.com ) ( www.ipwireless.com ) ( www.navini.com ) ( www.arraycomm.com ) ( www.kt.co.kr/kt/eng ) ( www.broadbandhomecentral.com/report/backissues/Report0212_12.html ) ( www.flarion.com ) ( www.hanaro.com ) ( www.xtratyme.com )


11G Goes Gangbusters

On January 31st, Linksys announced that over 100,000 of their wireless products based on the emerging 802.11g standard had been sold in North America since shipping began on December 24, 2002. Linksys expects to ship more than 500,000 Wireless-G products during 1Q of this year. These products are based on "54g" silicon, Broadcom's implementation of the draft standard, expected to receive final IEEE approval this June. Although products cannot yet carry a Wi-Fi label, Broadcom and Intersil have conducted interoperability testing up to the 54 Mbps data rate.

802.11g transmits in the same 2.4 GHz band as 802.11b. It has been eagerly anticipated by those using the 11b standard and looking for faster data rates. Unlike 802.11a -- which also has faster data rates -- 11g has the advantage of maintaining back compatibility with the huge installed base of 11b products (21.5 million shipped in 2002 according to Broadcom). 11g is also expected to work faster over a longer distance than 11a, but is more susceptible to interference from devices like microwave ovens and portable phones.

To get a perspective on expectations for 11g products, we spoke with Jeff Abramowitz, Senior Director of WLAN Marketing at Broadcom. Jeff is delighted with the success of 11g-based products: the ramp rate in getting to 100,000 g-based products sold is 4x as fast as 11b and 12x as fast as 11a. Although some changes came out of the January IEEE standards meeting, Broadcom's 54g silicon is "draft 6.1 compliant" i.e., can handle the change and Linksys will be issuing new software to accomodate it.

We spoke with Jeff about realistic customer expectations for throughput under various circumstances. Broadcom has determined that users of 11b should get 5+ Mbps, users of 11g should get 20+ Mbps. Naturally, the rates will vary with distance. If a user has a mixed network, with their 11g access point supporting both b and g cards, then the b cards will still get 5 Mbps but the g card rates will be slowed to 10 Mbps; coordinating the use of the transmission medium requires overhead communication. Thus compatibility brings with it some reduction in throughput.

Several people at Linksys told us their 11g products were flying off the shelves, and our initial attempt to buy an 11g access point and notebook card bore this out. While visiting our son in Colorado Springs, we found Web sites back-ordered and had to call a number of stores before we finally found what seemed to be the last Linksys 11g access point in stock in town. We are sure that Linksys suppliers will help them re-stock quickly and understand that other vendors will have product available momentarily.

Once we installed the access point and LAN card at our son's house, we did some initial performance tests. We didn't have our complete test rig so we couldn't do extensive testing. However, after setting up our various laptops (there were 4 people and 4 laptops present) we measured 11g speeds from 12 to 16 Mbps - more than three times faster than 11b using the same test in the same places.

Both Linksys and Broadcom say these early "54g" products are upgradable to the final specs. Articles in many trade magazines have warned users that the standard isn't final until it is actually approved and to beware of potential interoperability problems with products based on different chip sets. That didn't deter us personally from buying an access point and cards for our son, although he had no pre-existing wireless networking equipment installed.

We have started more rigorous testing in our home environment so we can compare the performance of 11a, 11b, 11g and mixed mode (b and g) environments. We expect to report our results next month in the Broadband Home Labs section of this report. Please see the Broadband Home Labs section of our website for more information: http://www.bbhcentral.com/bbhl/wifi.html

( www.linksys.com ) ( www.broadcom.com ) ( www.wi-fi.org ) ( www. intersil.com )


Applications: Downloading Music and Burning CDs - Legally

(Dave) Last fall, a reader wrote us about broadband applications: "Rhapsody charges a monthly subscription fee for their service but I am particularly fond of the 'build-your-own-radio-station' feature that is offered. As the 'free' Internet radio stations dry up it looks like 'pay to play' will eventually become the standard for Internet distribution of audio and video content." We were intrigued by his observation and made a note to learn more about this feature.

Screenshot of Rhapsody "My Stations" --> Click for larger pictureWe recently started using this feature. The "radio stations" in Rhapsody are preprogrammed music sequences from albums in Rhapsody's catalog; these cover many genres similar to satellite radio. But none of them really matched the music I like best: American and English folk-rock. I quickly found the "Create a Custom Station" feature, and entered eight artist names (it allows up to ten). I then clicked on "play" and immediately started listening to a sequence of tracks from those artists -- and other artists Rhapsody found that were similar. This approach is really better than radio -- you can fast-forward past any song you don't like.

Screenshot of album in Rhapsody --> Click for larger picturePretty soon, I heard a great song by a group I didn't recognise. Clicking on the "Album info" icon brought me to an album I'd never heard of - "The Guv'nor Vol 3" by Ashley Hutchings. I knew about Hutchings since he was in several of the groups I'd selected. So I did a search by artist on "Hutchings" and found two more albums in the same series -- and then listened to the three albums.

I really wanted to hear the albums on our audio system as well as on my PC so I wondered if there was a way I could get the albums into our PC jukebox. (Readers will remember that we use our PCs as a jukebox and play tracks over our audio systems with an *AudioTron" networked digital audio system.)

I noticed that Rhapsody was promoting a special price for "CD burning" - 49 cents a track instead of 99 cents - so I decided to burn one of the albums and see how this works. The first album was available for burning (not all are), selected all the songs and burned a CD. It took about ten minutes and was very straight-forward. And at $9.31 (19 tracks) it felt like a bargain compared to buying the CD -- I didn't have to pay shipping and I had it right away. (At the regular price it wouldn't have made much sense - unless I selected only the songs I liked best.)

I next needed to "rip" the CD to my hard drive. Since it was not an original CD, I wondered whether Gracenote CDDB (the online music data base) would be able to recognise it and give me the track information.

Screenshot of AudioStation ripping a CD --> Click for larger pictureI started up AudioStation (the PC digital-music player we use) and put the CD in the drive. CDDB immediately identified the CD as "The Gov'nor" and downloaded the track list! In about six minutes, the tracks and all the "meta data" -- track names, times, etc. -- were on my hard drive and added to my library.

I then went to the AudioTron connected to our main audio system, asked it to "Search for new music" and in less than another minute was listening to "The Guv'nor" in the kitchen and dining room!

But the music didn't sound quite as good over the loudspeakers as on my PC. This is partly due to the poor quality of some of the original tracks, but I think also partly due to the process. Rhapsody downloads the tracks in a compressed format and converts them back to standard CD audio format to record the CD. AudioStation then re-compresses each track in WMA format to rip it to disk. This sequence must cause some loss in audio quality.

And I really didn't want the disk: I wanted the compressed tracks and the meta data on my hard drive. I would have saved a lot of time if Rhapsody could just save the tracks to disk in a standard compression format - either MP3 or WMA. That would have preserved more audio quality and I could always create a disk if and when I needed one.

The combination of Rhapsody, AudioStation and AudioTron -- plus a PC, broadband connection and home networking -- shows where music distribution will go. It's not perfect yet, but it's a great step forward and will get easier from here. Hopefully, the labels will see how much better this distribution method is compared to pressing disks, and will license large parts of their catalogs for online listening, legal download and disk burning.

The music industry has been slow to come around to what has to be the wave of the future. It certainly looks as though some retailers who have been so negatively affected by the drop in CD sales over the past year are not going to sit by and watch the business disappear. Our news section above mentions Anderson Merchandisers, the music distributor for Wal-Mart, buying Liquid Audio's digital music fulfillment business; and the formation of Echo, a consortium of the six largest music retailers. These bricks-and-mortar based establishments seem to understand the importance and complementary nature of making profit both from physical CDs and from music downloaded (with their participation) from the Web. Let's hope the rest of the industry follows their lead.

Meanwhile, I see that Rhapsody has lots of other albums available for burning. I'm looking for more to add to my collection before the price goes back up.

( www.listen.com ) ( www.gracenote.com ) ( www.voyetra.com ) ( www.turtlebeach.com )


Broadband Home Labs - Vonage DigitalVoice Broadband VoIP Service

We believe SIP will dominate digital telephony in many markets, and we've been evaluating several approaches to SIP telephony for home use. We've been using a low-cost SIP-based telephone service from Vonage for most of our phone calls during the past few months.

We've had different reactions to using the Vonage service:

  • Dave thought it was pretty good -- much better than cellular and almost as good as regular service. He experienced a few "funnies" like unexpected "network busy" tones and some calls that got cut off, but is happy to keep using it for most calls.
  • Sandy found it more annoying. Frequent clipping of words led to the tendency of two people to "step on" or talk over one another -- because they thought there had been a pause, but there really wasn't. She likes the idea of paying less for phone calls but does not use the service for critical calls or those where nuances and emotional content may be present.
  • It's clearly pretty subjective: Getting off the same phone call, Dave would think it had been fine but Sandy had found it less than satisfying.

In this article, we'll describe IP telephony and especially the role of SIP. We'll describe our experience with the Vonage service, and mention two other SIP tests we're conducting from our home. Several readers have already participated in our tests and we invite you all to call us.


IP telephony, H.323 and SIP

As many readers know, "IP telephony" or "VoIP" refers to the technologies and services for telephone services using IP protocols. These come in many forms and include creating voice connections between PCs, standard PSTN phones, and special "IP phones". Some services operate purely over the public Internet, some over managed IP networks, and some connect through "gateways" to the PSTN.

There are two main standards-based approaches to packet-switched telephony. The older is the H.323 protocol suite from the ITU and is most common in Europe. The newer is the SIP protocol suite from the IETF and is most common in North America. SIP is entirely based on IP, while H.323 has many roots in earlier PSTN protocols.

SIP is solely a signaling protocol, while H.323 includes much more. The key differences between H.323 and SIP are in the methods used for signaling: locating users, setting up calls between them, and then tearing the calls down. Once a call is in progress, voice (and possibly also video) are encoded with a common set of media compression protocols.

IP telephony is increasingly used in enterprises around the world; systems based on H.323 and SIP are available in many markets. In consumer markets, simple PC-to-PC IP telephony has been available for many years. In the Windows world, Microsoft NetMeeting has always been based on H.323. The newer Windows Messenger is based on SIP. These have mostly been used by enterprises and to a limited extent by more technical users.

With the rapid growth of broadband users, VoIP is starting to reach the mass market.


The Vonage DigitalVoice Service

Vonage is a privately-held company founded in early 2001. Its DigitalVoice service is currently available in many major US markets and is expanding each month. The basic service includes unlimited local and regional calling, with 500 long-distance minutes anywhere in the US and Canada, for $25.99/month; the premium service offers unlimited long distance in the US and Canada for $39.99. Vonage says they now have close to 15,000 customers and should have 100,000 at the end of this year.

Cisco ATA186 phone adapter --> Click for larger pictureThe Vonage customer uses a standard analog telephone to place and receive phone calls. When we signed up to test the service, Vonage sent us a Cisco ATA 186 Analog Telephone Adaptor -- "a handset-to-Ethernet adaptor that turns traditional telephone devices into IP devices".

The ATA 186 is an example of what is called a "multimedia terminal adapter" (MTA). In the home, the MTA is connected to a broadband router and a standard phone is plugged into the MTA. No PC is used to make phone calls - the MTA does all the work. The ATA 186 supports both H.323 and SIP; Vonage uses SIP.

4-line phone, using Vonage --> Click for larger pictureWe set up and tested the service with a single phone plugged into the ATA 186. When that seemed to be working fine, we connected the 186 into the patch panel for our telphony wiring so that the Vonage service appears as "Line 4" on all our analog multi-line phones. When we pick up a phone and select line 4, we get a dial tone from the ATA 186, rather than from the phone company. We then dial a number (we have to use 11 digits for all calls) and soon hear a phone ring at the other end. Except for having to dial a "1" before local calls, it's exactly the same as making calls on our analog lines. When we're done, we hang up as usual.

Vonage assigned us a phone number 973-447-0929 for incoming calls. When someone calls that number, our phones ring on "line 4". Again, it works just like our analog lines.


Our Evaluation

We've used DigitalVoice for both personal and business calls, local and long distance, and for calls to "800" numbers. We've used it to place most of our calls, and have received a few.

Over the Web, Vonage provides users with a log of all the calls they've made and received. It shows that over the past 30 days we've placed 60 calls and received 6, for a total of 566 minutes.

The two of us reacted somewhat differently to using DigitalVoice:

(Dave) I found it quite acceptable - not quite as good as our analog lines, but much better than our cell phones. Most calls connected without a problem, although a few got a repeated "fast busy" indicating network congestion while the same call placed on an analog line went through without a problem. On three calls, the initial voice quality was very poor and I had to hang up and place the call again - it worked fine the second time. I was cut off twice without warning in the middle of long calls. I found the voice quality very acceptable; none of the people I called noticed any difference in voice quality. A few times in long conversations, I and the person at the other end started talking at the same time, and had to start the sentences again. I have continued to use it for most of my calls though I'd still want to have an analog line for lifeline calls to "911" which aren't supported by DigitalVoice.

(Sandy) I frequently found calls made thru Vonage annoying. There often seemed to be subtle clipping of words which led myself and the other party to talk at the same time. I really like the idea of paying less for phone calls but have made the conscious decision not to use the Vonage service for critical calls or those where nuances and emotional content are important. That said, however, calls in the "emotional/critical" category are the minority of my calls.


How it Works

Setting it up

To set up the service, you first plug a phone into the ATA 186 and connect it to your broadband router through a home network. It's easy to use a phone somewhere else if you have an Ethernet network in the house (as we do). You can also use a Wi-Fi or HomePlug network, or you can plug a portable phone into the ATA 186. If you don't have a router, Vonage will sell you one at a discount.

When you connect the power adapter to the ATA, a red button starts blinking. After it stops, you pick up the phone and dial 80#. You then hang up and again wait for the button to stop blinking - while you're waiting, the ATA is activating the Vonage account. When it stops blinking, you make a phone call - this proves that everything is working. Then you use a Web browser on a PC to configure your DigitalVoice account online.

This was all very easy and worked without a hitch.

Making calls

Each time you pick up the phone, the ATA 186 gives you dial tone and you dial a phone number. The ATA then uses SIP to communicate with a Vonage server over the Internet; the Vonage server tells the ATA how to connect to the most cost-effective media gateway connected to the PSTN, and is no longer involved. The ATA connects over the Internet to the media gateway, typically located in the same city as the called party, or close by.

Vonage does not have its own network. All connections between the ATA and the selected media gateway operate over the public Internet.

There are many ways calls could be impaired with this approach - by delays over the broadband connection (cable or DSL), and especially by delays over the Internet. But our experience was that few calls were badly impaired.


Try VoIP

This is one of three SIP telephony trials we are currently working on from our home. Please visit our web site at http://www.broadbandhomecentral.com/bbhl/communications.html for more information about these trials. That includes our phone numbers so you can try the SIP-based VoIP services either from analog or SIP phones.

( www.vonage.com ) ( www.cisco.com/warp/public/cc/pd/as/180/186/ )


Your Voice -- Readers' Comments

HomePlug in Europe

A reader wrote "I’ve been reading your articles on HomePLUG with interest. However, I’m based in the UK and I’m led to believe that HomePLUG is unlikely to succeed in Europe as it doesn’t meet some of the stringent regulations that we have over here... Do you have any insights which you can share on this issue?"

We replied that we had written about a UK company developing HomePlug products for Europe - see http://www.broadbandhomecentral.com/report/backissues/Report0211_9.html#link9b .

Since earlier press reports questioned whether HomePlug can comply with stringent European regulations currently in force on electromagnetic emissions, we'll look further into this.


Website Changes

We revised the Web format of our newsletter.

  • The top line of the Table of Contents/Summary page now includes links to view (1) the full issue (the old format where the entire report is a single web page); (2) a "printer-friendly" version of the full issue; (3) a "printer-friendly" version of the Table of Contents/Summary page; and (4) all the pictures from the issue.
  • We reprocessed all issues starting November 14, 2001 into the new format.

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