PSINet Enters High-Speed Business

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Internet-service provider PSINet Inc. is leaping into the
fixed-wireless-access domain with a low-cost, quick-to-deploy technology that will soon
deliver data to its business clients at up to 512 kilobits per second.

The ISP -- one of the core providers of the Internet
backbone, and a longtime player in data communications -- has launched its
"InterSky" service in Fort Myers and Naples, Fla. The company was also expected
to roll out service in Knoxville, Memphis and Nashville, Tenn., and in Mobile, Ala., by
week's end.

Initially, PSINet is offering subscribers a 128-kbps
data-over-frame-relay service at costs starting at $395 per month, which includes
transport, Internet access and the customer-premises equipment, said Richard Frizalone,
vice president for wireless Internet service at PSINet.

"Already, we're finding that the service is
driving higher market penetration for us," he said.

Through a six-month, unpublicized prove-in phase in the two
Florida cities, PSINet has seen its subscriber base grow from only two businesses to 52,
Frizalone noted. "Customers are pushing us to get this to them," he said.

One of those customers is Bill Percival, who heads Internet
Design Center Inc., a Web-based provider of services to the fashion industry that does all
of its business over the Internet.

"We had to have an absolutely dependable high-speed
access solution, and that's what this turned out to be," Percival said.

PSINet is using frequencies in the unlicensed 2.4-gigahertz
band to exploit technology licensed from Airdata Wiman Systems, a German concern,
Frizalone said. The point-to-multipoint system delivers 81 channels of 128-kbps service in
each of six sectors across a service area measuring about 12 miles in diameter, he
explained.

"We'll upgrade to 512-kbps [per-channel] capacity
in August, and go to 2 megabits per second in the first quarter of 2000," Frizalone
added.

PSINet is targeting second- and third-tier markets that are
underserved by ISDN (integrated services digital network) or ADSL (asymmetrical digital
subscriber line). Plans call for additional service introductions in Birmingham, Ala.;
Louisville, Ky.; and Charlotte and Raleigh-Durham, N.C., by the end of the second quarter.
The goal is to reach 50 markets by the end of 2000, officials said.

Although the company's strategy is to focus on smaller
markets, the successful performance of the service and its low deployment costs are
prompting thoughts about going into top-tier markets, as well, Frizalone said.

"We're discussing the idea of taking the big guys
on, maybe starting with a trial in one major service area," he added.

As described by Percival, the PSINet service has proved
highly dependable, even under heavy rain conditions in Naples this past summer.

"We moved here in July, and we were desperate to get a
connection after we learned that our ISP couldn't get the fractional T-1 that we
needed without a six-month wait," he said.

Percival went on the Web to look for a solution, and he
found the PSINet option.

"They had us up and running in five days," he
said.

Depending on building location and conditions, the Airdata
antenna receiver/transmitter can be mounted outside of the customer premises or on a desk
inside, Frizalone said.

"The unit uses an 8.5-dB [decibel] gain antenna, and
it measures about a foot-and-a-half wide," he added.

PSINet, which began offering IP (Internet-protocol) voice
services over clients' Intranets last year, plans to introduce IP voice over the
wireless-access system once it has been upgraded to 512-kbps channel capacity, Frizalone
said.

PSINet looks at the wireless system as strictly a business
platform, where the frame-relay format supports interconnection of the access line to a
local-area network serving multiple desktops. But Percival suggested that the company
might want to think about a bigger play for the technology.

"I'm amazed that people aren't jumping all
over this type of access," Percival said. "When you look at the last-mile issue
and how long it's taking to get high-speed access to people, something like this
should be a big seller for residential users, as well as business users."

Point-to-multipoint high-speed fixed-wireless networks are
just beginning to be deployed in major markets around the country, most of them at
frequencies ranging from 24 GHz to 38 GHz.

AT&T Corp. has indicated that it plans to introduce a
high-speed wireless-access service in residential and business markets, and the
personal-communications-services industry in general is pursuing next-generation systems
with similar capabilities.

But so far, providers of high-speed access over telco and
cable wires have the residential market to themselves.

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