TowerStream: First With 802.16e in the US?

Enterprise broadband operator Towerstream Corp. (Nasdaq: TWER) may beat Sprint Nextel Corp. (NYSE: S) to the punch by becoming the first service provider to commercially deploy mobile WiMax technology in the U.S. next month -- although TowerStream's CEO says the company has no plans to actually offer cellular-like services using the 802.16e network. [Ed note: That's some twist!]

The Federal Communications Commission (FCC) has just approved Alvarion Ltd. (Nasdaq: ALVR)'s 802.16e BreezeMAX basestation for use in the 3.65 GHz band, which TowerStream uses to run its existing network in the U.S. The operator is already testing five networks using the Alvarion base stations in Rhode Island.

TowerStream CEO Jeff Thompson tells Unstrung that the operator is ready to go commercial with the new technology very soon in an as-yet unnamed market. "We're under construction now, it'll probably go live next month," he says.

If TowerStream hits this schedule that means it will likely go commercial with 802.16e mobile WiMax technology before the much-ballyhooed Sprint Nextel Xohm launch, which has been delayed and will miss its original April kick-off date. (See XOHM May Launch This Summer.)

Ironically, however, Thompson says TowerStream, which has networks deployed in New York, Boston, Chicago, San Francisco, and other major markets in the U.S., has no intention of using 802.16e for mobile services. Instead, the company believes it can improve its existing fixed wireless broadband services using the new technology.

"We get much better line-of-sight coverage with 802.16e than we did with fixed WiMax, and it's a much bigger market," explains Thompson.

He says that, over time, the operator hopes to see cheaper equipment and other "economies of scale" from moving to 802.16e gear, and anticipates migrating to the new technology quickly once the trials are complete.

Thompson doesn't entirely rule out some experimentation with mobile services using 802.16e. He says the company could potentially look at "more nomadic" or WiFi hotspot-like services with WiMax, or may even lease out some connectivity.

"If some other operator wanted to rent on our network, we'd be open to looking at that, but it is not currently on the business plan," he says.

And, as Thompson says, 3.65 GHz isn't well suited to fully mobile services. It's hard to do "70-miles-per-hour hand-offs" using the spectrum, unlike the 2.5 GHz band used by Sprint or the 700 MHz radiowaves that will help to power 4G networks.

— Dan Jones, Site Editor, Unstrung