Wimax Report - Expanding the potential of wireless services in the US using the 3.65GHz band

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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White Paper Expanding the potential of wireless broadband services in the US using the 3.65GHz band

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

2008 Senza Fili Consulting www.senzafiliconsulting.com | 2 |


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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


$850

EnterpriseBasic

10 Mbps symmetrical

48 voice channels

10,000 minutes domestic LD

$1,275

EnterprisePremium

20 Mbps symmetrical

48 voice channels


$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.



13/14



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


14/14


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

[email protected] 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.


Documents

Wimax Report - Expanding the potential of wireless services in the US using the 3.65GHz band