[Cu-wireless] FW: High-Speed Wireless Internet Network Is Planned

Chris Kaihatsu ckaihatsu at myrealbox.com
Sun Dec 8 01:06:40 CST 2002

From: steve zeltzer <lvpsf at igc.org>
Date: Sat, 07 Dec 2002 03:49:18 -0800
To: UPPNET <lvpsf at igc.org>
Subject: High-Speed Wireless Internet Network Is Planned


December 6, 2002

High-Speed Wireless Internet Network Is Planned


    SAN FRANCISCO, Dec. 5 — The wireless technology known as WiFi,
which allows users of personal and hand-held computers to connect to the

    Internet at high speed without cables, got a significant stamp of
approval today when AT&T, I.B.M. and Intel announced a new company to
create a
    nationwide network.

The unruly technology, which has largely been a playground for hackers,
hobbyists and high-technology start-ups, is already sprouting
mushroomlike in coffee
shops, bookstores, airports, hotels, homes, businesses and even a few

The new company, Cometa Networks, has set ambitious goals for itself: to
deploy more than 20,000 wireless access points by the end of 2004,
placing an
cable-less high-speed Internet connection within either a five-minute
walk in urban areas or a five-minute drive in suburban communities.

Executives from the technology companies and the two investment firms,
Apax Partners and 3i, that joined to create the network said they would
begin offering
their service through cellular and wired telephone companies, D.S.L. and
cable Internet service providers and other Internet retailers some time
in 2003.

The service is intended to let subscribers pop open their laptops and
have a seamless high-speed wireless extension of their personal or
corporate Internet
services — initially in the 50 largest metropolitan areas — without
having to give credit card numbers or enter additional information, as
is generally the case
now. Connections would generally be at least the speed of a typical home
broadband connection.

Cometa executives said that they expected the national availability of
the wireless network would combine with Intel's planned inclusion of
wireless Internet
capability in all its mobile microprocessors next year to spur a
fundamental shift in the way Americans will use the Internet.

"This is that big," said Dr. Lawrence B. Brilliant, chief executive of
Cometa Networks. "It's that exciting; it's that much of a distortion in
the computing field.
It's a change in the way people use technology."

Until now WiFi has been viewed by many technology analysts as an upstart
from-the-bottom technology that has the potential of upsetting other
capital-intensive technology deployments, like the expensive
next-generation data-oriented cellular networks known as 2.5G and 3G
that are being established
by companies like AT&T Wireless, Cingular, Nextel, T-Mobile, Sprint and

But Cometa executives said that because they had chosen a wholesale
business strategy, in which they will not sell Internet service directly
to consumers or
business, it is more likely that the two technologies would complement
each other. In addition, users of the wireless access points would
generally be stationary
while connecting to the Internet.

"WiFi has very high bandwidth and short range, while 2.5 and 3G cellular
are lower bandwidth services designed to support data services on the
fly," said
Theodore Schell, chairman of Cometa Networks and a general partner of
Apax Partners. "They will have different cost equations, and there is a
place for both
of these technologies."

Industry analysts have said they believe that growing WiFi use could
steal valuable subscribers from cellular companies that are hoping
consumers will begin
using their cellphones for data services like movie times, restaurant
reviews and shopping deals wherever they are traveling.

The Cometa executives said they were not certain how the new network
would be used but were convinced that the nation's 100 million Internet
users would
begin to use their portable computers in new ways once connections are
widely and easily available as they travel.

The executives and industry analysts acknowledged that creating a new
nationwide wireless network was something of an act of faith given the
economic and technological gloom in the telecommunications industry. It
is widely believed that the industry had overbuilt and had overinvested
in the Internet
boom of the last decade.

The new company would not disclose its planned prices or the equity
stakes of the five partners. Wireless industry analysts, however, have
said WiFi hot spots
can cost as much as $4,000 apiece to install in public places. If the
average cost is half that, the installation of 20,000 access points
would cost $40 million.

"One of the problems is that giant companies creating wireless ventures
often have not had tremendous success," said Alan Reiter, publisher of
Internet and Mobile Computing, an industry newsletter based in Chevy
Chase, Md. He pointed to ambitious and expensive undertakings like a
cellular data
initiative known as C.P.D.P. in the 1980's and early 1990's and the
wireless data service known as Metricom, which went bankrupt last year
with $800 million
of debts.

Other analysts questioned whether Cometa Networks would be able to make
headway in an already crowded WiFi marketplace that has had both early
and a host of smaller, aggressive start-ups.

"It's obvious that what is happening right now is a wireless land grab,"
said Andrew Seybold, editor of Outlook 4Mobility, a publishing and
consulting firm
based in Los Gatos, Calif. "The question is, How many places can they
lock up and how quickly?"

Cometa executives insisted, however, that they were in a different
position from their predecessors. The companies have a technological
advantage in that they
will not have to create customer equipment, relying on Intel's equipping
the nation's portable computers with wireless abilities.

They said Cometa was also in a particularly strong position with respect
to its competitors because it could use AT&T's existing data network, to
connect the
planned 20,000 wireless access points.

Leaving the relationship with individual customers to Internet service
providers "is smart from a business point of view," said Richard Miller,
a wireless data
industry consultant at Breo Ventures in Palo Alto, Calif. At the same
time, he noted, the venture will not succeed unless big corporate
customers demand the
service from Internet service providers.

"The demand will have to come from the enterprise to the carriers," he

To gain the confidence of corporate customers the new network will have
to meet stringent data security standards, and Dr. Brilliant said that
Cometa planned to
take advantage of industry standards like virtual private networks to
add security to the WiFi standard.

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