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8/14/2019 Wimax Report - Expanding the potential of wireless services in the US using the 3.65GHz band
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Expanding the potential of wirelessbroadband services in the US using the
3.65GHz band
CONSULTIN
SENZAFILI
Monica PaoliniSenza Fili Consulting
September 2008
For wireless broadband operators, the availability
of affordable, clean spectrum in which they can
deploy the most advanced technologies is critical
to their success.
Until recently, operators in the US have faced
spectrum restrictions that have limited the market
growth of wireless broadband services. License-
exempt bands in the 2.4GHz and 5.8GHz
frequencies have been successfully used by manyoperators, but interference has increasingly
become an issue, especially for Point to Multipoint
(PMP) networks. In these bands, operators face
interference not only from other operators, but
also from consumer devices (microwaves, phones,
residential Wireless Local Area Network [WLAN]
hardware, etc.) that make it difficult to manage
interference successfully.
The other two bands that are available in many
markets are 2.5GHz and 3.5GHz. The 2.5GHz band
is available in the US, but it is largely controlled bylarge operatorsmostly by Clearwire, Sprint, and
AT&T. In most countries, wireless broadband
operators have access to licensed spectrum in the
3.5-3.7GHz bandalong with a large choice of
commercial equipment, because this is the
licensed band most widely used for fixed
broadband services. In the US, wireless operators
were not able to use this band until the end of
2007.
The Federal Communications Commission (FCC)
recognized the spectrum limitations that US
operators faced, and introduced an innovative
licensing scheme in the 3.65GHz band. It is
designed to unlock the market potential for
wireless services and widen the availability of
broadband to underserved areas in the country.The newly available spectrum is subject to light
licensing: licenses are not exclusive, and they are
easy and inexpensive to obtain. In many ways, the
3.65GHz band promises to combine most of the
advantages of unlicensed bands with substantially
lower, manageable levels of interference.
While the light-licensing scheme used for the
3.65GHz band is still largely untested because of
its recent introduction, the results so far are very
encouraging. Commercial equipment based on
Worldwide Interoperability for Microwave Access(WiMAX) with the necessary FCC approval is now
available from multiple vendors. In some cases
where vendors have invested in Interoperability
Testing (IOT), operators can use interoperable gear
from different vendors within the same network.
As of September 2008, 420 operators nationwide
have applied for or received a license, and some of
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them have launched commercial services using
WiMAX-based equipment.
Wireless operators have welcomed the availability
of the spectrum in the 3.65GHz band because it
allows them to better serve their existing andprospective clients, to extend coverage, or to start
new deployments in a cost-effective way. This is
possible because, in addition to the low levels of
interference, the 3.65GHz band has good
propagation characteristics that enable Non-Line-
Of-Sight (NLOS) operations. This results in lower
deployment costs and better coverage.
The additional benefit of the 3.65GHz band is that
it brings wireless operators access to WiMAX-
based technology, which before now was available
only for licensed spectrum. WiMAX supportsimproved spectral efficiency, lower per-bit costs,
and Quality of Service (QoS) for carrier-grade voice
services and enterprise Service Level Agreements
(SLAs). As WiMAX equipment is deployed
worldwide, operators can expect to reap the
advantages of economies of scalelower
equipment prices and wider choice of vendors and
productseven though equipment for the US
market has to be slightly modified to meet the
domestic regulatory requirements.
This paper provides an overview of the
opportunities for wireless operators in the
3.65GHz band in the US. It starts with a discussion
of the key regulatory requirements and the
available technology options, and continues with
two case studies of operators (Nex-Tech and Rapid
Link) that have successfully launched commercial
services in the 3.65GHz band.
The FCC regulatory framework forthe 3.65GHz bandLicensing in the 3.65GHz band and FCC product
certification both started in 2007, with the first
commercial deployments announced in 2008
Chronology1984 Fixed Satellite Service (FSS) space-to-earth
stations allowed to operate in the 3.65GHZ
band, alongside government and non-
government radiolocation services.
2000 Fixed and mobile terrestrial services allowed inthe 3.65GHz, coexisting with existing FSS and
radiolocation stations.
2005 Nonexclusive licensing scheme adopted forterrestrial services, with the requirement that
base stations support a contention protocol that
minimizes interference. The contention protocol,
however, was not specified.
2007 Restricted and unrestricted contentionprotocols defined.
2007 First 3.65GHz base station certified.Table 1. Chronology
(Table 1). Table 2 summarizes the key licensing
provisions for the band.
The FCCs goal was to create a band with low entry
costs and minimal regulatory delays to enable
multiple wireless operators to roll out services,
while keeping interference at a minimum. In trying
to find a compromise between expensive, difficult-
to-obtain licensed spectrum and interference-
prone unlicensed spectrum, the FCC decided to
adopt a nonexclusive licensing scheme with a
contention protocol requirement.
Under the nonexclusive licensing scheme, there is
no limit to the number of operators that can obtain
a nationwide license. The implicit expectation is
that each operator will focus on selected
geographical areas and that this will prevent
spectrum overcrowding. Obtaining a license in the3.65GHz spectrum is a fast and straightforward
process that can be completed at any time with
minimal cost (210 USD).
To manage interference, the FCC uses two tools: a
requirement that operators make any effort
necessary to minimize harmful interference, and
the adoption of a contention protocol. All
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operators with a license are required to register
their base station locations with the ULS (Universal
Licensing System) prior to deployment, and to
appropriately coordinate operations to minimize
interference. Operators that deploy first in a given
area do not enjoy any first-to-market advantageover operators coming on later. They are all
required to collaborate to find a solution that
enables multiple operators to coexist.
Furthermore, base station registration allows new
entrants in a market to evaluate spectrum
availabilityas well as market potentialbased on
the base stations already installed. This may turn
out to be the most effective tool in preventing
spectrum (and market) overcrowding. In most
markets, there is effectively room for only one or
two operators to roll out services profitably in theband. In this sense, early operators enjoy a
substantial advantage and may effectively stop
others from entering the market, unless they are
not successful at attracting or retaining customers.
The adoption of a contention protocol to manage
interference has attracted a lot of criticism from
operators and vendors alike, especially as the FCC
initially had not defined what the contention
protocol was. In 2007, the FCC issued a
clarification that opened the door to equipment
certification, but there is still considerable
uncertainty about which contention protocols will
be allowed by the FCC.
The FCC has defined two types. A restricted
contention protocol manages interference among
devices using the same wireless interface. WiMAX
qualifies as implementing a restricted contention
protocol, as multiple subscriber devices can
coexist within the same network, and multiple
networks can coordinate operations to minimize
interference. All products certified by the FCC todate support restricted contention protocols.
Unrestricted contention protocols work across
multiple wireless air interfaces. The FCC defines
such a protocol as one that can avoid co-
frequency interference with devices using all other
types of contention-based protocols.
Key licensing provisions for the 3.65GHz bandSpectrumband
Restricted contention protocol: 3.65-
3.675 GHz.
Unrestricted contention protocol: 3.65-
3.7 GHz.
Multiplexing Time Division Duplexing (TDD).Channelbandwidth
None fixed. Operator can decide channel
bandwidth.
Peak powerlimits
Base station and outdoor subscriber
device (fixed): 25 Watts per 25MHz
channel, with 1 Watt per MHz of
bandwidth used.
Subscriber device, indoor (mobile
device, in FCC terminology): 1 Watt per
25MHz channel.
Certificationrequired
FCC certification ensures that base
stations and subscriber equipment
implement an approved contention
protocol.
Geographicavailability
All national territory with the exclusion of
areas surrounding about 100
grandfathered earth satellite stations
(150km radius) and the federal
governments radiolocation stations
(80km radius), unless satellite operatorsor the federal government give
permission to operators to deploy base
stations in the area. As a result, 3.65GHz
coverage is not allowed in many East and
West Coast urban areas.
Licensingrequirements
Operators need to obtain a nonexclusive,
nationwide license first. Each base
station deployed has to be registered in
the ULS database to facilitate cooperation
among operators active in the same area.
Table 2. Key licensing provisions for the 3.65GHz band
The listen-before-you-talk protocol used by Wi-
Fi is the most commonly cited example of an
unrestricted contention protocol. While a listen-
before-you-talk protocol can limit the impact of
interference, it carries significant overhead
requirements that can dramatically affect the
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spectral efficiency of the technology. For the end
user, the difference in performance between
interference and network congestion may be
difficult to see. As of September 2008, the FCC had
not yet certified any equipment that supports an
unrestricted contention protocol.
The FCC has reserved the upper half of the
spectrum (3.6753.700 GHz) for equipment using
only unrestricted contention protocols, to
encourage their development. The lower half of the
band (3.6503.675 GHz) is available to equipmentthat implements both types of contention
protocols.
The FCC has also taken into account the fact that
the band was already allocated to FSS licensees and
to radiolocation services ( ). As a result,
wireless operators are not allowed to operate in
areas surrounding grandfathered satellite earth
stations and radiolocation stations.
Figure 1. Grandfathered base stations in the 3.65GHz band. Source: FCC
The business case for 3.65GHzoperatorsThe US is becoming a sophisticated market for
broadband services, where subscribers expect a
reliable and robust connection that supports voice
and can be rapidly installed. This is true not only in
high-density urban areas where subscribers have
multiple broadband access choices, but also in
rural or underserved areas. At the same time,
competition is increasing for wireless operators, as
their previously underserved subscribers
increasingly have access to wireline access
Figure 1
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technologies (Digital Subscriber Line [DSL], cable,
and fiber) and/or to a competing wireless operator.
In this environment, wireless broadband operators
need to have access to the most advanced and
cost-effective technologies, and to suitablespectrum allocations. These are necessary if
operators are to provide the services subscribers
have come to expect at the right price point, while
still meeting operators profitability targets.
The 3.65GHz band gives a unique opportunity to
operators in the US to improve the economics and
performance of their networks, while giving them
the flexibility to adopt the business model best
suited to their requirements. In particular, the
3.65GHz band presents the following advantages:
More easily manageable interference. Onlywireless operators have access to the 3.65GHz
band. No consumer electronic devices or WLAN
hardware is allowed in the band, significantly
reducing the sources of interference. Because
they have to register the location of the base
stations, operators know in advance how
competitive a new market is and can work with
each other to limit interference. It is not clear
yet how effective such coordination will be in
practice, if operators are unwilling to cooperate
fully. In most markets, however, we do not
anticipate a high number of operators, as this
would quickly saturate the market and make it
difficult for the operators to become profitable. Good propagation. Many operators
accustomed to the higher spectrum frequency
and lower peak power allowances of the
5.8GHz band will find the better propagation of
the 3.65GHz band a main source of cost
savings (fewer base stations are needed to
cover the same area) and improved service
(more reliable connections and enhancedindoor coverage).
Well suited for data services based on InternetProtocol (IP). The FCC has left operators muchmore flexibility in the use of the spectrum than
in most licensed bands. Operators are free to
choose the channel bandwidth, and the
spectrum is not paired, thus allowing them to
use TDD, which is better suited to data
networks, while at the same time offering full
support for voice services.
Inexpensive spectrum. Operators can obtain a3.65GHz license very easily for a nominal price.
While this may have the effect to encourage
increased competition in the market, it also
gives the opportunity to any operator, small or
large, with or without previous experience in
wireless services to enter the market.
Nationwide license, but regionally targetedservice. Once an operator obtains a license, ithas the option to deploy when it chooses and
where it chooses. The FCC views the license as
an opportunity, not a commitment to roll out a
service. Operators can choose to rapidly deploy
large networks to take advantage of animmediate market opportunity, or to deploy
base stations gradually in response to growth
in subscriber demand.
WiMAX-based solutions for the3.65GHz bandOne of the key advantages of the 3.65GHz band isthat it finally gives independent, smaller operators
the opportunity to deploy WiMAX in the US in a
licensed-exempt (or light-licensed) environment1
in an affordable way.
The attractiveness of WiMAX solutions is evident:
as of September 2008, all the FCC certified
products in the 3.65GHz band are WiMAX-based.
Redline Communications was the first vendor to
receive FCC certification in 2007. The main
advantages that WiMAX brings are the following:
Carrier-grade equipment with QoS support.WiMAX was designed to offer carrier-grade
1WiMAX-based gear can also be deployed in the license-exempt
5.8GHz band, but interference may become a concern.
Interference and less favorable propagation drive operators to
prefer PTP technologies in the 5.8GHz band or to limit the use
PMP technologies to residential services.
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performance in licensed bands, with full
support for QoS. It makes it possible for
operators to manage traffic on a per-
subscriber, per-application, per-flow basis. In
turn, this gives operators the ability to offer
SLA-based contracts to business users and tofully support voice services.
High capacity. Each sector can support 13Mbps with LOS and NLOS and 18 Mbps with
LOS in a 7MHz channel. This is a substantial
improvement over previous PMP proprietary
technologies, which translates in the ability of
the operator to support more subscribers per
sector and/or to provide higher bandwidth per
connection. Some operators may limit the
number of subscribers per sector to 5 or 10 to
provide enterprise-level services. Operatorstargeting the residential market may support
up to 500 subscribers within the same sector.
NLOS propagation. WiMAX allows operators toreach customers even if they are not located
along a Line-of-Sight (LOS) path from the base
station. As a result, operators can deploy fewer
base stations to get the same level of
coverageor obtain better coverage with the
same number of base stations. It also gives the
operator more flexibility in positioning both
base stations and Customer Premises
Equipment (CPE).
Indoor and outdoor CPE. With WiMAX,operators can choose whether to use indoor or
outdoor CPE. While many operators still prefer
the higher performance of outdoor CPE, they
find the lower costs associated with a desktop
CPE, which does not require professional
installation, attractive. However, the FCC
mandates a substantially lower peak power
limit (1 Watt for 25MHz channel) for desktop
modems than for outdoor CPE or base stations,
on the grounds that these are mobile stations,which have the potential to cause harmful
interference. This will severely limit the
adoption of indoor CPE in the 3.65GHz band.
Lower equipment costs. WiMAX supports wide-channel, multisector base stations, which use
advanced Orthogonal Frequency Division
Multiplexing (OFDM) and Orthogonal
Frequency Division Multiple Access (OFDMA)
modulation techniques to reach high
throughput and spectral efficiency. WiMAX
effectively delivers a lower cost per bit than
other wireless technologies (and, in particular,
cellular technologies that operate in narrowerchannels). In addition, operators may expect to
take advantage of more competitive WiMAX
equipment prices compared to proprietary
solutions, which do not enjoy the same
economies of scale.
IP-based core network. WiMAX can be moreeasily integrated with other IP-based
technologies than non-IP cellular technologies.
It accelerates the development of more
advanced services, as well as customer
provisioning and support.Although wireless operators in the 3.65GHz band
can avail themselves of all the capabilities
supported by WiMAX technologies, they cannot use
WiMAX Forum CertifiedTM products targeted at the
international market. The equipment that can be
used in the US has to meet FCC power restrictions
that are tighter than those prevalent in other
countries, and vendors need to make small
adjustments to their products to receive FCC
certification. While the underlying technology,
performance levels, reliability, and features are the
same as those for certified products sold by the
same vendor in the international market, operators
have to be careful to choose those vendors that
have developed a specific solution to address the
US market.
Similarly, the guarantee of interoperability across
multiple vendors that the WiMAX Forum
certification program provides should not be
assumed to necessarily extend to 3.65GHz
equipment. In many cases, vendors with
interoperable products in the 3.5GHz band willindeed have interoperable products in the 3.65GHz
band but operators need to verify with the vendors
that that is what they are getting. Some vendors
have invested in IOT with others within the WiMAX
ecosystem to further ensure operators can benefit
from a range of applications and devices.
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The operators viewOperators agree that the 3.65GHz band improves
their business case and their ability to successfully
serve their customers. However, there aresubstantial differences among operators as to what
these goals mean and how they plan to achieve
them.
In this paper we present the experience of two
operators that have different business models,
operate in different areas, target different
segments, and have different performance
requirements.
Other deployment models are also possible and
indeed are being used by other operators,
providing evidence of the flexibility of the solutions
in the 3.65GHz band.
Initially, the 3.65GHz band was presented as a way
for small, independent, rural operators to have
easy access to affordable licensed spectrum and to
offer broadband connectivity to bridge the digital
divide in underserved areas. Many 3.65GHz
operators, however, have their sights set on urban
and suburban markets, where they face
competition from wireline operators and, in somecases, wireless operators (e.g., Pipeline Wireless).
Residential and small business users are typically
considered the ideal market segment for 3.65GHz
operators. Operators like Rapid Link, however, are
targeting exclusively business users, although the
band is clearly not ideal to serve large businesses,
which often need a Point-To-Point (PTP)
connection.
Regional operators like Nex-Tech or Le-Ru
Telephone Company were initially considered to bethe ideal candidates for the band. However,
operators such as NextPhase, Nth Air, and Rapid
Link have US-wide ambitions, and even though
they do not plan to cover the entire country, they
are expanding to multiple urban centers across the
USand in some cases, they cover or plan to cover
the same cities.
In most cases, operators use different wireless
solutions in different bands. They also often offer
wireline services, and the 3.65GHz deployment is
used strategically to address a specific market
segment, rather than being the core service offered
(as it is, for instance, the 2.5GHz band forClearwire in the US). The network rollout approach,
however, varies considerably across operators. In
some cases, such as Nex-Tech or Rapid Link,
3.65GHz deployments are organic and driven by
subscriber demand and the need to increase
capacity in specific areas. Other operators, such as
Nth Air or NextPhase, are using the 3.65GHz band
to expand their coverage to new areas and
markets.
We do not expect any of these models to become
prevalent, but rather the success of each is tied tohow well it fits the overall targets and requirements
of the operator.
Case study: Nex-TechNex-Tech in many ways fits the model of the
operator targeted by the 3.65GHz regulation. It has
a very clear regional focus in Northwest Kansas,where it serves a mix of residential and small
business users with multiple wireline and wireless
technologies. Nex-Tech coverage areas include
Hays (pop. 20,000) and many other cities in the
region, including Salina (46,100), Great Bend
(15,500), Russell (4,700), Phillipsburg (2,700), and
WaKeeney (1,900). Smaller centers such as Lenora
(306) are also covered.
Nex-Tech is a subsidiary of Rural Telephone, the
local phone operator that has been serving the
area since 1951. In addition to wireless Internetaccess, Rural Telephone offers local and long
distance voice services, cellular voice, cable TV,
and broadband connectivity through DSL and fiber.
Core market and services offeredNex-Tech has carved a niche for itself as the
trusted, local service provider that has competitive
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service offerings, but is not necessarily the lowest-
cost one. Its focus is on the quality and reliability
of service and on being able to provide services to
its customers regardless of location.
In this context, wireless broadband technologiesallow Nex-Tech to provide coverage in areas where
DSL and fiber are not available. Of its 15,000
broadband subscribers, 6,000 use wireless
broadband access. These customers are served by
a mix of equipment from different vendors and
operating in various frequencies (700MHz,
900MHz, 5.xGHz), with the 3.65GHz base stations
being the latest addition to the mix.
In many instances, new subscribers do not even
know they will receive wireless connectivity. The
price, reliability, and quality of the service areexpected to be the same across technologies.
The main customer focus is on the residential
market, which accounts for 80% of subscriptions,
many of which include bundled services. Examples
of Nex-Tech Internet access services are shown in
Table 3. Because of the companys long-term
presence, reputation, and strong community links,
churn is very low. Nex-Tech does not even feel the
need to charge installation or early termination
fees to keep churn under control, despite the fact
that it operates in a market where it is competing
head-to-head with DSL and cable operators.
Subscribers are free to terminate the service when
they want.
Why the 3.65GHz band?Justin McClung, Internet Solutions Manager at Nex-
Tech, describes the companys 3.65GHz
deployment as the obvious choice. Nex-Tech has
learned a lot from previous wireless broadband
solutions it used, which suffered from interference,limited NLOS, insufficient throughput, and lack of
reliability and QoS support. The availability of
affordable 25MHz of clean spectrum with good
propagation characteristics, and of a next-
generation wireless broadband technology like
WiMAX, makes the 3.65GHz band a compelling
choice indeed.
Nex-Tech product offeringsfor residential subscribers
Bandwidth Internet only Internet and voice512kbps $19.95 $34.081.5 Mbps $29.95 $44.083 Mbps $39.95 $54.086 Mbps $49.95 $64.08Table 3. Nex-Tech product offerings for residential
subscribers
In particular, McClung notes the following key
advantages afforded by WiMAX-based equipment
in the 3.65GHz band:
Spectrum.So far, Nex-Tech has not faced anyinterference or competition in the 3.65GHz
band in its coverage area, and it does not
expect to see much in the future. The market is
already served by multiple wireline
technologies (including growing fiber coverage,
also driven by Nex-Tech). A second wireless
operator would face considerable challenges in
penetrating the market and achieving
profitability in areas with a low density of
households.
Performance. With a single-sector base station,Nex-Tech expects to support up to 200subscribers. A base station can cover a radius
of 2-3 miles in LOS, and 1-2 miles radius in
NLOS.
Propagation. WiMAX-based solutions allow formuch-improved NLOS capabilities that make it
easier for Nex-Tech to reach customers
outside the LOS path to the base station.
QoS and advanced traffic management. Theability to manage traffic and assign priority to
different applications or subscribers is crucialto Nex-Tech, as it enables it to monitor the
subscriber experience more closely.
Voice over Internet Protocol (VoIP) support.Although Nex-Tech offers copper-based local
and long-distance voice services, McClung
considers VoIP crucial to attract new
customers. Nex-Tech does not advertise VoIP
and, as a fixed and cellular operator, does not
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need VoIP to support voice services, but it is a
service the subscribers have come to expect.
Early resultsNex-Techs experience to date in the 3.65GHz
band has been very positive. The company hasinitially installed three base stations as an overlay
in areas where it needed additional capacity (
). The installation took only 6-8 weeks to
complete, and Nex-Tech expects the installation
time to be considerably shorter for future base
stations. Extensive engineering support from the
vendor was crucial to the fast rollout. Integration of
the 3.65GHz infrastructure within Nex-Techs
existing core network is something McClung feels
still needs more work. Feedback from subscribers
has been very positive, for both voice and data
services.
Figure
2
While indoor CPE would clearly lead to lower
installation costs and faster subscription activation,
Nex-Tech feels more comfortable with
professionally installed outdoor CPE. Indoor CPE in
the 3.65GHz band is subject to power limitations
too strict to be widely used and is simply too
much trouble, according to McClung. He cautions
other operators to be very skeptical about business
cases that rest on the assumption of a wide use of
indoor CPE.
The business modelThe Nex-Tech business model is very low impact
in terms of effort and funding required, and it
promises a steady increase in revenue that closely
matches the financial outlays. Being an established
service provider, Nex-Tech uses the 3.65GHz
network to improve service and increase capacity
in areas already served. It plans an organic,
demand-driven rollout that targets areas where
there is a known potential for revenue growth. In
some cases, it may deploy new base stations to
retain customers who need more bandwidth.
In this context, McClung does not expect funding
to become an issue for Nex-Tech, as funding
requirements are contained, and matched against a
clear forecast of expected revenues.
One of the central issues for all wireless
operatorsespecially if targeting the residentialFigure 2. Redline Communications base
station and CPE in the Nex-Tech network
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marketis the cost of new connections, including
CPE and truck roll costs. Nex-Tech estimates that
the installation cost is about $500 per connection,
which translates into 14-17 months for payback
(based on Internet connectivity revenues alone
i.e., excluding revenues from the same subscriberfor voice or cable TV). McClung does not expect
the price to come down to DSL modem levels over
the next few years, either, simply because the
volume for outdoor CPE will remain lower than for
that for DSL.
With its low churn levels, Nex-Tech does not
appear to be overly concerned about the
installation costs, as it views them as part of the
requirement to provide a wide array of reliable
services (data, voice, TV) to its customers. If Nex-
Tech cannot provide Internet access, customersmay decide to move all their bundled services to a
competitor that does provide them.
Case study: Rapid LinkRapid Link follows a very different market
approach than Nex-Tech. It exclusively targets
business subscribers in selected metropolitan
areas across the country (Atlanta, Dallas, LosAngeles, Omaha, St. Louis, and Washington, DC),
and it has adopted 3.65GHz equipment to reach a
very specific marketsmall to mid-size business
sitesthat are not cost effective to serve with PTP
links.
The wireless broadband operations were added to
Rapid Link through the acquisition of One Ring
Networks, an alternative access carrier based in
Atlanta, in March 2008.
Core market and services offeredAs a vertically integrated service provider, Rapid
Link provides extensive voice and data services to
business subscribers through its own facilities-
based IP network to business users, enterprises,
and carriers. Rapid Link subscribers rely on a
network that is physically independent from the
wireline one and that therefore can provide true
redundancy to subscribers. Vertical integration also
allows Rapid Link to offer a wide array of carrier-
grade voice and data services.
Rapid Links approach to date has been to target
business users with high bandwidth requirements(over 5 Mbps) and to provide service with fiber or
PTP connections, depending on availability and
customer preferences. Subscriber ARPU is $1,266
per month, with an average bandwidth of 10 Mbps
(see Table 4 for more information on product
offerings). This includes both wireless and fiber
subscribers, with 80% of subscribers using wireless
links and accounting for 60% of revenues. Because
of the high revenues per subscriber, it is easy for
Rapid Link to justify the cost of a PTP link for each
subscriber.
Rapid Link product offeringPlan Description Pricesfrom
Pro Starter1.5 Mbps symmetrical (1 T1)
4 voice channels
1500 minutes domestic Long
Distance (LD)
$385
Pro Basic 3 Mbps symmetrical (2 T1s)12 voice channels
3000 minutes domestic LD
$590
Pro Premium5 Mbps symmetrical (3+ T1s)
24 voice channels
5000 minutes domestic LD
$850
EnterpriseBasic
10 Mbps symmetrical
48 voice channels
10,000 minutes domestic LD
$1,275
EnterprisePremium
20 Mbps symmetrical
48 voice channels
20000 minutes domestic LD
$1,925
Table 4. Rapid Link product offerings
Why the 3.65GHz band?The PTP model breaks down entirely when trying to
reach a new market segment that includes smaller
businesses that need only a 25 Mbps connection.
Even with the low churns levels that are typical of
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Rapid Link customers, the cost of a PTP link for
each customer becomes difficult to justify.
Compared to existing Rapid Link customers, 2-5
Mbps customers generate lower revenues and
margins, but they are an attractive market becausethe number of medium-size enterprises is high.
Furthermore, a cost-effective service for this
segment allows Rapid Link to offer connectivity to
branch offices of existing customers.
The 3.65GHz band is a safe choice that finally
allows the operator to address this market,
according to Matt Liotta, Rapid Links Chief
Technology Officer. Liotta had considered using
the 5.8GHz band, which the operator uses
extensively for PTP links, but decided against it.
While interference can be managed effectively withPTP links, it becomes more difficult to do so in PMP
networks. Liotta thought that the risk of damaging
the operators reputation with unreliable
connections was too high, and he preferred to wait
for the 3.65GHz band to become available.
Interference in the 3.65GHz band comes only from
other operators, and this makes it much more
manageable. Liotta does not expect to see much
direct competition in the market in the long term.
There may be multiple operators initially, but there
will eventually be consolidation.
In addition to reduced impact of interference, the
3.65GHz band allows Rapid Link to use WiMAX-
based technology, with its full support for QoS
which is crucial for VoIP services. Good NLOS
capabilities are also highly valuable in areas like
Atlanta, where tall trees make radio planning more
challenging.
Early resultsThe 3.65GHz-based service was launchedcommercially in June 2008, and as of September
2008, seven base stations had been installed in
Atlanta. Rapid Link plans to expand the service to
other cities in the future. The operator has been
very impressed with the performance of the new
gear. Most customers that have been moved from
a PTP link to a 3.65GHz one have not noticed any
difference in service level. This is quite impressive,
as a PTP link provides a dedicated data channel,
while the 3.65GHz link is contended.
As voice support is essential to Rapid Link, Liotta
has adopted an aggressive approach to ensure the
availability of network capacity for voice calls. Ineach sector, Rapid Link dynamically allocates
capacity for 48 voice lines (3.8 Mbps, or about 40%
of the available capacity). Effectively, this
establishes a dedicated channel for voice calls
which, however, becomes available for data traffic
if otherwise unused.
The business modelDespite the different market approaches, the
deployment models followed by both Nex-Tech
and Rapid Link are similar. In both cases, the3.65GHz infrastructure is deployed as an overlay to
the existing network, thus leveraging the existing
backhaul links and core network infrastructure,
doing so in response to demand from subscribers
or to the need to provide additional capacity.
In the case of Rapid Link, the dependency on
subscriber demand is even more direct, as the
3.65GHz gear is used to address a new market
segment. When a new subscriber requests a
connection, Rapid Link decides whether to
provision it with a PTP link or with a 3.65GHz PMP
base station. If a 3.65GHz base station is used,
Rapid Link markets the new service in the area
directly and through its sales partners.
This growth approach minimizes the capital
required for the buildout and directs it to areas
with proven demand. It allows Rapid Link to avoid
an expensive and ambitious rollout plan, and to
start collecting revenues on each new base station
right away.
The downside of this approach is that installing a
new base station (in addition to the CPE at the
customer site) extends the time needed to connect
the first subscriber. However, the time required is
not going to be significantly longer than installing
a PTP link, and the delay affects only the first
customer on a base station. (Rapid Link expects to
have 5 to 12 subscribers per sector and to use
three-sector base stations.)
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Within this model, Rapid Link expects to reach a
breakeven point for all capex within about nine
months for both PTP and PMP subscribers. The
ability of the operator to do so depends crucially
on the ability to leverage existing backhaul and
core network assets and to combine the newservices with the existing ones.
ConclusionsThe availability of the 3.65GHz band on a
nonexclusive licensed basis greatly expands the
market opportunity for wireless broadband
services in the US. It will widen the availability of
broadband in digital-divide, underserved areas,and it will provide more choice to broadband
subscribers in competitive markets.
It is still unclear whether the contention protocol
and frequency coordination mandated by the FCC
will be effective in controlling the impact of
interference. The new licensing scheme adopted
for the 3.65GHz band may prove effective and
usher in further innovation in licensing frameworks
in the US and abroad. If its effectiveness is limited,
operators will still benefit from affordable access to
the 3.65GHz band and from the ability to finally
deploy WiMAX-based solutions in the US, even if
they do not have access to the much more
expensive and difficult-to-obtain 2.5GHz
spectrum.
All types of fixed wireless operators in the US can
benefit from the availability of the 3.65GHz
spectrumalthough, realistically, in each market
the number of operators that will be able to
successfully operate side by side within the band
will be limited. This may have the positive effect ofcontaining interference within manageable levels.
New operators have the opportunity to deploy and
launch service in urban, suburban, or rural areas,
and will have the ability to expand their network as
desired with time, provided they avoid the areas
where grandfathered stations are located.
Established wireless broadband operators have
already started to deploy 3.65GHz equipment to
expand their reach to new market segments, to
offer new services, or to improve the performance
or capacity of their network.
The availability of WiMAX technology for the
3.65GHz band will give both new and established
operators the ability to roll out carrier-grade
networks with improved performance, NLOS
capabilities, and QoS support, which can support
voice and data services on the basis of a
compelling business case.
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ReferencesFurther information on the licensing requirements
for the 3.65GHz band can be found on the FCC
website (wireless.fcc.gov).
FCC (2005) Report and Order, FCC 05-56.
http://hraunfoss.fcc.gov/edocs_public/attachmatc
h/FCC-05-56A1.pdf
FCC (2007) Memorandum Opinion and Order, FCC
07-99.
http://hraunfoss.fcc.gov/edocs_public/attachmatc
h/FCC-07-99A1.pdf
Acronyms3G Third Generation
CPE Customer Premises Equipment
DSL Digital Subscriber Line
FCC Federal Communications Commission
FSS Fixed Satellite Service
IOT Interoperability Testing
IP Internet Protocol
LD Long Distance
LOS Line Of Sight
NLOS Non Line Of Sight
OFDM
Orthogonal Frequency Division
Multiplexing
OFDMAOrthogonal Frequency DivisionMultiplexing Access
PTP Point To Point
PMP Point to Multipoint
QoS Quality of Service
SLA Service Level Agreement
TDD Time Division Duplexing
ULS Universal Licensing System
VoIP Voice over Internet Protocol
WiMAX
Worldwide Interoperability for
Microwave Access
WLAN Wireless Local Area Network
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White Paper Expanding the potential of wireless broadband services in the US using the 3.65GHz band
About Redline CommunicationsRedline Communications (www.redlinecommunications.com) is the
leading provider of fixed and mobile standards-based wireless
broadband solutions. Redlines RedMAX WiMAX Forum Certified
system, RedMAX 4C Mobile WiMAX products, and its award-winning
RedCONNEX and RedACCESS families of broadband wireless
infrastructure products enable service providers and other network operators to cost-effectively deliver high-
bandwidth services, including voice, video and data communications. Redline is committed to maintaining its
wireless industry leadership with the continued development of WiMAX and other advanced wireless
broadband products. With more than 100,000 installations in 85 countries, and a global network of over 170
partners, Redline's experience and expertise helps service providers, enterprises and government
organizations roll out wireless broadband networks to support advanced communications.
About Senza Fili ConsultingAt Senza Fili we have in-depth expertise in financial modeling, market research, business
plan support, business development, RFP and vendor selection support, due diligence,
white paper preparation, and training. Our clients are international and span the entire
value chain: they include fixed and mobile operators, ISPs, greenfield operators, vendors,
solution providers, system integrators, investors, and industry associations.
At Senza Fili we have in-depth expertise in financial modeling, market research, business
plan support, business development, RFP and vendor selection support, due diligence, white paper
preparation, and training. Our clients are international and span the entire value chain: they include fixed and
mobile operators, ISPs, greenfield operators, vendors, solution providers, system integrators, investors, and
industry associations.
CONSULTING
SENZA
FILI
For more information, you can visit us at www.senzafiliconsulting.com, or you can contact us at
info@senzafiliconsulting.com or at +1 425 657 4991.
2008 Senza Fili Consulting LLC. All rights reserved. This white paper was prepared on behalf of Redline Communications. The views andstatements expressed in this document are those of Senza Fili Consulting LLC and they should not be inferred to reflect the position of RedlineCommunications. The document can be distributed only in its integral form and acknowledging the source. No selection of this material can becopied, photocopied, duplicated in any form or by any means, or redistributed without express written permission from Senza Fili ConsultingLLC. While the document is based upon information that we consider accurate and reliable, Senza Fili Consulting LLC makes no warranty,express or implied, as to the accuracy of the information in this document. Senza Fili Consulting assumes no liability for any damage or lossarising from reliance on this information. Trademarks mentioned in this document are property of their respective owners.
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