Original URL: https://www.theregister.co.uk/2005/08/08/intel_backs_us_municipal_metrozones/

Intel throws weight behind US municipal metrozones

New model could put key telecoms services back in public ownership

By Wireless Watch

Posted in Policy, 8th August 2005 08:20 GMT

Analysis Intel is throwing its financial, technical and lobbying weight behind the rising tide of municipally run broadband wireless networks, seeing these as a way to stimulate uptake of Wi-Fi and WiMAX and so sell more of its chips and increase its influence over the communications world.

It is helping authorities work out the best business models and technical choices for their metrozones, often with a combination of Wi- Fi mesh and, in future, WiMAX. Most of these have to work in unlicensed spectrum, and so have to cope with the threats of interference and with competition from license holders from RBOCs to start-ups.

However, there are rising calls for public sector bodies, with a remit to extend low cost broadband access to the whole population, to have access to valuable licensed frequencies too. In the UK, Metranet is leading the demand for upcoming 2.5GHz allocations to be at least partially reserved for local authorities to create a publicly owned alternative to the cellular networks. Such plans are radical, but with the rise of spectrum trading and deregulation, they are becoming more practical, especially if large companies like Intel help fund the acquisition of spectrum for digital cities. Years after privatization of telecoms in most advanced economies, an element could be returned to public ownership again.

Intel has taken a keen interest in the burgeoning market for ‘digital cities’ – metro areas blanketed in broadband wireless coverage, sometimes privately run, increasingly frequently supported by municipal authorities. It is now stepping up its activities to promote these deployments, seeing them as a key early market not just for Wi-Fi but also for WiMAX, and therefore a means to gain ubiquity for the technologies that is stands the best chance of dominating. Support from influential players, combined with the increasingly flexible approach of the world’s regulators, could put core telecoms activities once again into the hands of the public sector.

By their nature, metrozones use equipment in license-exempt bands, normally 5GHz, but some operators argue that, in order to make money, they will need to offer licensed options, especially as 5GHz spectrum becomes congested. The 3G operators – particularly those, like Verizon, rapidly introducing CDMA EV-DO to US cities – claim their technology offers this capability. But

some non-cellular players are looking to the availability of licensed frequencies at 2.5GHz and below as a means to create a parallel system to 3G for high speed applications in the urban areas – some of them major players such as BellSouth, whose pre-WiMAX services went live in one Georgia city last week; others start-ups, pressurizing for more ready access to licensed spectrum, as represented by the UK’s municipal networks specialist Metranet.

Role of WiMAX in unlicensed zones

Unlicensed metrozones are certainly a more short term opportunity to boost Wi-Fi usage, especially as more advanced mesh techniques emerge from the likes of Nortel and Tropos, and represent one of the earliest chances for a WiMAX business model. Until WiMAX subscriber equipment is sufficiently compact and low cost to be incorporated into a laptop or handset, its main role will be to provide backhaul for Wi-Fi hotspots and meshes; to support high bandwidth intra-mesh links, possibly in licensed spectrum; and to offer T1 replacement services to urban companies, as TowerStream does in major US cities.

The lower backhaul costs that WiMAX often brings compared to wireline leased lines will attract the attention of budget constrained municipal networks, and this is one of the options that Intel is promoting in its latest round of activity focused on metrozones. It is sending consultants and advisers to major cities that are considering municipal zones, to help them place these on a sound technical and business footing. There has been rising concern that, even where city authorities do not have their hands tied by the tide of legislation that bans or restricts municipally funded broadband, they are entering the market without a clear idea of the costs involved.


Opponents of municipal networks have focused on this aspect in their bid to dampen enthusiasm for the public subsidized broadband that could threaten telco business. Ivan Seidenberg, CEO of Verizon, recently claimed that a plan to build a municipal hotzone in San Francisco, to offer cheap or free services, is “one of the dumbest ideas I've ever heard”.

"It sounds like a good thing, but the trouble is someone will have to design it, someone will have to upgrade it, someone will have to maintain it and someone will have to run it," he added, claiming, predictably, that private telcos are better placed to do this than government agencies.

In a similar though more moderate vein, Qualcomm’s chairman Irwin Jacobs said this week that many municipalities are getting into metrozones "without realizing the costs that are involved”. He added: "I don't think there's a ban required. But if I were voting in a municipality, I think I would not vote in favor of using tax funds to go ahead and compete with commercial services that are available and that are rapidly improving."

Although these men have a clear axe to grind, they do raise genuine concerns about spiralling costs when using new and largely unproven technologies such as Wi-Fi or WiMAX mesh. The average cost of building and maintaining a municipal Wi- Fi mesh network is $150,000 per square mile over five years, according to Jupiter Research, a figure that it believes needs more than $30 ARPU to break even in US cities. These figures are already daunting, and appear to make a WiMAX mesh metrozone economically non-viable, at least in the medium term.

However, using WiMAX for backhaul and high bandwidth links could reduce overall costs and make the mesh more profitable, as Intel is arguing in its consultations with city authorities.

Intel’s backing for municipalities

It is certainly throwing resources at the municipalities, showing how important it believes this sector to be in stimulating uptake of Wi-Fi and WiMAX. "I'm not a philanthropist," said Paul Butcher, an Intel marketing manager in Beaverton, Oregon, in an interview with The Oregonian. "The adoption of broadband technologies, in whatever technology that is, tends to help sell more processors. It just so happens that that motivation is aligned nicely with the motivation of cities and citizens."

As well as offering free consultancy, Intel sometimes helps fund municipal roll-outs, such as Houston, Georgia, which claims it will be the first ‘WiMAX county’. Intel was heavily involved in the project, which is trialling Siemens equipment, from the planning stage and has injected funding. It chose Houston to be its prospective WiMAX flagship because it is in an area with many hi-tech companies and military contractors, and because of a recent project with the county’s high school. Intel donated a $30,000 wireless technology laboratory to the school and has carried out various education-oriented tests there using tablet PCs and other technology.

And it is using its lobbying power to counter anti-municipal legislation. "They've been a great ally," said Jim Baller, a Washington, DC attorney who was in the forefront of pro-municipality lobbying. "They have written statements of support; they have sent people out into the hallways; they have rallied support among the other members of the high technology industries."

Intel is now supporting a Congress bill introduced by the Republican Senator for Arizona, John McCain, promoting local authorities’ rights to launch wireless networks in direct competition with incumbent telcos. The Community Broadband Act of 2005 adds provisions to the Telecommunications Act of 1996 to allow a municipality to offer high speed access to its citizens. "The bill would ensure fairness by requiring municipalities that offer high speed internet services do so in compliance with all

federal and state telecommunications laws and in a nondiscriminatory manner," McCain said in his floor statement introducing the legislation. McCain's bill contrasts with a Senate bill introduced last month by Republican Senator for Texas, Pete Sessions, which would keep municipalities out of broadband.

Could municipal authorities access spectrum?

In general, even where they are free to run networks, municipalities do not have access to licensed spectrum, which is mainly controlled by telcos. However, freer spectrum trading around the world, and the opening up of new frequencies, could enable such bodies to acquire their own bandwidth, directly or via partnerships. Intel itself is widely expected to bid for broadband wireless licenses in future, in order to ensure they will be used for services based on its preferred technologies, and it could work with a public sector partner in some regions.

There are pros and cons to using licensed spectrum for metrozones, which are mainly affected by the amounts allocated. In 2.5GHz or 3.5GHz bands, more base station sites will be needed for high capacity deployments, as there is usually a limited bandwidth assigned, but unlicensed spectrum will only support indoor or portable CPEs very close to the base station because of interference issues, especially in urban environments. This means that licensed bands carry lower average CPE cost and installation cost, and the customer appeal of offering a higher percentage of the base an indoor unit.

In urban environments with indoor CPE, very dense cells are required, which increases capex greatly. Wi-Fi can support dense cells at far lower cost using mesh. Cell size will be a few hundred meters, rather than up to 10 kilometers in rural areas with outdoor CPE. In unlicensed bands, then, the smaller number of Wi- MAX base stations needed, plus a Wi-Fi front end, can create the most attractive investment model.

Metranet UK

In the UK, there is a rising call for local authorities to be given access to new spectrum when it is opened up, probably in 2007. Municipal networks operator Metranet argues that the regulator, Ofcom, should not hold an auction to award its planned 2.5GHz- 2.69GHz licenses to the highest bidder, but instead look at encouraging new services and competition from city authorities.

This could create an alternative mobile network geared to the needs of citizens and to applications such as education, claims Metranet’s CEO Roger Horlock, vocalizing an idea that is gaining credence in other European countries too.

Metranet is behind a municipal network in the UK coastal city of Brighton and Hove, which will work under a public-private partnership and carry both commercial and public sector traffic.

The local authority, Brighton and Hove District Council, provided initial funding for the network, which follows the blueprint favored by Intel, with pre-WiMAX backhaul supporting a string of free hotspots as well as local government administrative applications and other public services such as library connections.

The WiMAX base stations will be mounted on tall council buildings and Wi-Fi access points will also be able to use publicly owned infrastructure. Brighton Council will be able to replace leased lines – or add equivalent connections for the first time - between all its buildings and, when mobile Wi- MAX arrives, it plans to support mobile internet access for its workforce at lower cost than 3G.

Public ownership of licensed bands

Horlock writes of the opening up of the 2.5-2.69GHz band: “Perhaps this band doesn't have to go to auction at all. Why should it? Why not, instead, devolve responsibility for the use of that band to each local authority across the UK? Empower them to build their own wireless networks and reduce, possibly eliminate the cost of certain operations, operations we as taxpayers support. From that base, local authorities could offer wireless internet access, video streaming services, personal instant messaging and so on, be that not for profit or otherwise.”

He believes such an approach could create a sixth mobile network, to run alongside the five 3G offerings, and enabled by the increasingly low cost infrastructure that should be rolled out by WiMAX vendors. This would be owned by the citizens and “each local authority would simply act as the steward for the deployment and maintenance of the network. Its profits can then be ploughed back into building the network organically out from the cities and into the rural settings, building capacity and bridging the digital divide”.

Groups of authorities could team together to increase purchasing power, as is already happening in the US – the first WiMAX cooperative was launched in May in Nashville, Tennessee, enabling consumers to club together to purchase broadband networks and services to improve local facilities. Founder John Bransford says Wimaxcoop will help communities and businesses “take control of their broadband by using the cooperative as a legal form to pool resources for WiMAX installation”.

Telecoms cooperatives have traditionally served rural districts but Bransford seeks to extend the model to urban districts and businesses, bypassing both incumbents telcos and government involvement.

Such concepts remain radical, especially in Europe where urban areas have been better served by low cost broadband than in the US. But regulators are starting to reduce their own role and encourage more flexible licensing and more creative business models.

In this climate, publicly owned networks could become an increasingly important force, in unlicensed or even licensed bands, and the countries that privatized their telcos some years ago may come full circle and see the public sector, once again, taking ownership of core infrastructure. For vendors like Intel, this can only accelerate usage of broadband services, making it urgent that it persuades the public bodies to adopt its own favored technologies for their roll-outs.

Copyright © 2005, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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