Wireless-Broadband Cos. Eye New Rollouts, Greater Savings

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Wireless-broadband technology moved one step closer to
commercial reality last week, amid new technology developments suggesting that ever
greater cost benefits are in store for this mode of access.

Teligent Inc. became the first entity to deliver services
to paying customers over two-way point-to-multipoint (PMP) transmitters in the
high-frequency spectrum region. The company is using a three-cell system connecting 19
customer-building antennae in the Wilshire and Westside areas of Los Angeles.

The network segment -- operating over the 24-gigahertz
tier, which Teligent is licensed to use in 74 major metropolitan areas nationwide -- had
been the test site in Teligent's preparations for commercial rollout of PMP systems
supplied by Nortel.

The service launch meets the company's target of
achieving initial commercial service over the Los Angeles PMP facilities. It also paves
the way for integration of such systems into other network segments where the company has
point-to-point services in operation, Teligent president and chief operating officer Kirby
Pickle said.

"As we have tested our initial point-to-multipoint
network in Los Angeles during the past few months, we've learned a great deal about
how we can maximize the efficiency of our deployment and our systems," Pickle added.

Pickle said the company, with more than 900 employees on
board, intends to have 15 markets in operation by year's end, including several with
PMP segments activated.

Meanwhile sources in Washington, D.C., signaled that the
lingering cloud over the regulatory history of Teligent's spectrum acquisition had
been dissipated in a conversation between Federal Communications Commission chairman
William Kennard and House Commerce Committee chairman Thomas Bliley (R-Va.).

Bliley had sent a letter in July, demanding further
explanation from Kennard as to how Teligent was granted spectrum blocks of 300 megahertz
to 400 MHz -- representing a fourfold increase in a shift of its licenses from 18 GHz to
24 GHz -- without a public proceeding.

Rather than replying in writing, as Bliley had requested,
Kennard called Bliley, a commission source said.

One source said Kennard had severely reprimanded the
officials who were responsible for some of the decisions, and Bliley was content to let
the matter drop, although he would "keep a close eye on how future decisions are
handled."

"Bliley's letter was taken very seriously at the
FCC," Commerce Committee spokesman Eric Wolshlegel said, adding, "The FCC has
committed to never engage in this type of behavior again."

Teligent's use of the Nortel PMP technology marks the
introduction of wireless delivery of bandwidth-on-demand in a fixed-service environment
using ATM (asynchronous transfer mode) technology -- a widely embraced approach to
providing fixed-broadband services over wireless-broadband networks.

But a new approach will soon be vying for attention,
representing the first time that a pure Internet protocol-over-broadband option has been
offered in the wireless domain.

The new "adaptive-IP" concept, to be offered by
San Diego-based start-up Ensemble Communications Inc., involves the direct insertion of IP
packets into TDM (time-division multiplex) slots for modulation over the RF
(radio-frequency) link. This avoids the bandwidth-consuming overhead associated with
cell-based configuration of packets in the ATM mode, officials said.

The use of TDM creates a "wireless bus," where
multiple users access a given frequency channel within the time segments assigned to them,
allowing each to receive a signal at speeds of anywhere from DS0 (64 kilobits per second)
to DS3 (45 megabits per second).

"Ensemble's technology will enable service
providers to offer a wide range of new revenue-generating services, such as voice over
IP," said Bill Stensrud, partner at Enterprise Partners, a venture-capital firm
backing Ensemble.

Ensemble, founded last year, has raised $6 million in
funding, and it is about to enter another round of financing, officials said.

The Ensemble system is designed for use in LMDS (local
multipoint distribution service) and other high-frequency classifications from 2 GHz to 42
GHz.

It also accomplishes high levels of bandwidth efficiency by
carrying downstream and upstream signals in a single frequency channel, thereby
eliminating bandwidth-consuming guard bands between the streams, said Rami Hadar,
president and CEO of Ensemble.

"We are using an adaptive version of time-division
duplex, which means that time slots in either direction are only used when needed,"
Hadar added.

As a third area of efficiency, the company has developed an
adaptive-modulation technique at the physical RF layer, which allows the system to shift
any given user's data stream to a lower level of modulation (fewer bits per hertz) in
instances of high levels of atmospheric or other interference.

Even though many users may be on a given frequency channel
at one time, the adaptive-modulation technique can be dedicated to the conditions of each
user by shifting modulation levels from one time slot to the next, Hadar said.

"Wireless offers an ideal bus-type architecture for IP
to ride on," said Carlton O'Neal, who recently left another LMDS supplier, Bosch
Telecom Inc., to join Ensemble as vice president of marketing and sales.

"This system is meant to support complete flexibility
in the allocation of bits to each user at a minimum cost in bandwidth, which translates
into a minimum cost to deploy the network," O'Neal added.

The Ensemble system -- which also supports operation in
other formats compatible with transmissions from customer premises, including ATM and
standard telephony -- will reach prototype stage by the second quarter of next year and be
ready for field trials by the third quarter, O'Neal said.

The company is discussing integration of its technology
with suppliers of IP-routing systems to add flexibility and cost-efficiency to the
wireless network, he added.

Another supplier, Ericsson Inc., is signaling its
intentions to bring wireless-broadband product to the U.S. market in a way that represents
the conservative end of the PMP options now flooding into the new market.

"We believe that the market opportunity in broadband
wireless is associated with delivery of carrier-class services that must be absolutely
robust and reliable," said Pekka Keino, product-line director for wireless local loop
at Ericsson's wireless-broadband-access group.

Rather than using QAM (quadrature amplitude modulation) --
which delivers multiple bits per hertz, depending on the level employed -- Ericsson is
basing its PMP system on QPSK (quadrature phase shift key) modulation.

In Ericsson's channelization scheme, this will deliver
30 mbps per 30-MHz frequency channel, or "sector." Ericsson plans to showcase
the system in a trial in Dallas in the first quarter, Keino said.

Ericsson, like other suppliers, is discovering that the
LMDS market remains unsettled in the United States due to uncertainty among newly licensed
operators about how to build their businesses.

"Most people don't yet have a solid, concrete
plan, and many are still sorting through whether to go it alone or to partner with other
entities," said Janelle Twyford, strategic product-marketing manager in the Ericsson
unit.

With major manufacturers and an array of technical options
to choose from, licensees and potential partners, including major telecommunications
companies, have a lot to think about, Keino noted.

"Our message is that this is serious business that
represents a tremendous opportunity to meet demand for broadband if people make the right
technology choices," he said.

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