Chapter 22 - Is Law Enforcement the Red–Headed Step Child of the Broadband Movement?

When Wireless Broadband was on everyone’s lips 8 years ago, we all thought we would be able to use our laptops everywhere. About the same time that Earthlink and Metro-Fi realized you can’t make “Free” pay off for their investors, 3G started moving in to fill the void. Then YouTube came along, pushed 3G to the ground and said, “I spit in the face of your puny bandwidth (insert Austrian Accent Here).” 3G then said, “Oh yea, my big brother, 4G, is coming and he will take care of you. You will be sorry.” YouTube said, “BTW, meet my cousins, Hulu and NetFlix”. 4G took one look at these guys and said, “I’ll fight you guys but you have to have one hand tied behind your back, both legs tied together, and we are only going to fight for 10 minutes. After that I win and you have to go home”.

In the meantime, the Big Land Barons who wanted to expand their holdings went to the Lords of the FCC and whispered in their ears, “Our lands aren’t big enough and we have rocks and trees in our way. If you kick out the squatters that are on some of your prime land, we will buy it from you and enrich your coffers.” So it was that the Lords of the FCC created The Great Plan. They took The Great Plan to the Council of Kings and said, “We need you to pass a law to kick out the old squatters. We will tell them they are doing the right thing for the country and then resell their land for a fat purse. We will then give some of the land to new squatters for free who will also develop the land and make our Kingdom better.”

When the Sheriffs heard of The Great Plan, they said unto the Lords of the FCC, “We have worked our lands to death and need new lands. The Bandits are smarter, faster, and meaner. We need new lands all across the Kingdom and in every village so Sheriffs are closer and can work together to stop the bandits.” In the Great Plan, the Lords of the FCC decided to appease the Council of Kings and not ask them to use the coin from the Great Sale to pay for the Huts and Barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle. Oh no, they were more clever than that. The thought they could fool the Big Land Barons into paying for the not only the land, but for the huts and barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle (I’m a huge Arlo Guthrie fan). The Lords of the FCC said unto the Sheriffs, “we will grant you new lands in order for you to protect the peasants from the bandits.” Thus, the Lords of the FCC were happy with their new plan and went forth to preach it. And so it was written, and so it was done.

To the peasants, the Lords of the FCC preached, “We are confiscating ill-gotten lands given away by the former Lords of the FCC in order to give you better services and enhance your cities and huts”. Prosperity will grow across thy land and all will be connected to the Great Message.” And the peasants and other squatters did not object for it was not their land being confiscated.

The FCC executed The Great Plan. They confiscated the lands and sold them off to the new Land Barons. The new Land Barons offered the Lords of the FCC a great amount of coin, thus ensuring that the Lesser Land Barons weren’t going to be able to buy the new prime land. At the same time, the FCC told the Sheriff’s, “We have decided that your land is too valuable to just give to you so we are going to sell it to the Big Land Barons. However, we are going to make the Big Land Barons build you houses and barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle.”

When the Land Barons read the scrolls written by the Lords of the FCC on how to use the new lands designated for the Sheriffs, they went to the Lords of the FCC and said, “We do not want that land. It is too costly and cumbersome to build the houses and barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle.” They then paid the Lords of the FCC a great amount of coin for the land they had already bought. The Lords of the FCC quickly left the Great Hall so as to not have to explain to the Sheriffs why their plan had failed and the Sheriffs still had no new land.

After that, many Sheriffs sent many riders to the Lords of the FCC requesting the new land. The Lords of the FCC spent long seasons pontificating on what to do about the land they confiscated for the Sheriffs. After a very long time, they came up with The Little Plan. The Lords of the FCC decided in the Little Plan that they would grant the land directly to the Sheriffs. They said, “We will give you the lands, but we will tell you what you may build on the land. You may only build huts and barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle as to our specification.” The Sheriffs said, “We have no coin to build huts and barns and lookout towers with 360 degree coverage and an 8” spyglass mounted in the middle. Where is the coin from the Land Barons for sale of the other Land?” The Lords of the FCC said, “It has been confiscated by the Council of Kings and redistributed to friends of the Great Messiah and the Council of Kings. There is no coin for you. You have to find your coin from somewhere else to follow the Llittle Plan.” And that my dear friend, brings us to today.

Basically State and Municipal Law Enforcement sort of got left out in the cold when it came to the new 700MHz frequencies. It’s not that they didn’t eventually get the bandwidth they needed; they were told that they must deploy the most expensive technology available to actually use it. Instead of using the money from the auction to build out this infrastructure, each municipality must fund their own infrastructure. Of course, considering that 3 different agencies in the Justice Department haven’t been able to build a simple radio together after wasting hundreds of millions of dollars with no end or product in sight, it’s probably too much to ask them to build a nationwide wireless system. This edict was also given at a time when government budgets are getting hammered from top to bottom. Since public safety has no money to deploy even two tin cans and a kite string, I don’t think we will be seeing high-speed bandwidth for mobile public safety in the near future in most major cities.

We started discussing a project last month where I needed to move 1Gbps or more of bandwidth 20 miles for a county wide system. There is new wideband equipment being released as we speak and I haven’t finished my homework so I’m going to table that phase of the project for a while. Since the project has several components, I thought we might jump over to the third tier, the last mile, since it directly ties into public safety.

As many of you live in areas where your vegetation grows over 8’ and doesn’t make you look like a porcupine when you bump into it, I thought tackling a project like that would be a good idea. Living in the desert has made me oblivious to the fact that there are cities across the country where houses are surrounded by trees that could double as space elevators and should have lights on top to warn airplanes away. Throw in vegetation that comes with its own zip codes, and there are places where the term Non-Line-of-Sight (NLOS) takes on a whole new meaning. Every cell tower that I saw in the area was so tall I figured I was coming down with magic beans if I ever had to climb one. I also learned that approaching someone getting out of a truck that came with a factory gun rack was probably not the best idea.

However, as high as all the cellular towers were around the county, there is no chance that 80% of the houses are ever going to see one from their front window. That means we are left to figure out how to get through the trees. In Chapter 17, we talked about how 900MHz can punch through vegetation, houses, and really mean neighbors. Since that article was written, some of the data I’m reading on current 900MHz deployments is pretty promising. However, deploying 900MHz can be kind of like trying to give a cat a bath, you get a trip to the emergency room and the cat just gets really ticked.

A quick review of 902-928MHz band means that we only have 26MHz of bandwidth to work with. By comparison, 5.8GHz has about 100MHz of spectrum to work with and 2.4GHz has approximately 60MHz. In practical application, a 5.8GHz system can deploy 4-5 APs with non-overlapping 20Mhz channels and a 2.4GHz tower can have 3 non-overlapping 20MHz channels. The 902-928MHz band is a little tighter so we only have room for one channel if we are using a standard 20MHz wide channel.

That means we need a different strategy. Assume that our coverage area is 360 degrees. Most wireless products in 902-928MHz band use down-converted WiFi chipsets. That means the throughput will be the same as 802.11a and 802.11g radios with the same channel widths. Motorola uses an FSK scheme instead of an OFDM modulation scheme that trades off a lower throughput for a better s/n ratio.

Both systems have a bandwidth rate in Mbps that is numerically about ½ the spectrum size. For example, Motorola uses an 8MHz channel and has a maximum capacity of 3.3Mbps total aggregate. WiFi down-converted systems with a 10MHz wide channel will have an aggregate throughput of about 5Mbps. Some Wifi systems have a little higher throughput but all of this assumes a connection at the highest level modulation rate. The other side of this equation is the whereas Motorola will work with a s/n ratio of 3dB, a WiFi system needs a minimum of 10dB.

802.11N 2x2 MIMO has a different formula. Not only is the efficiency of the protocol better than 802.11a/g, the processors are typically faster, more efficient, and have better sensitivity ratings than older a/g chipsets. From there, throw in the fact you are transmitting two signals in the frequency spectrum. The end result is such that the rule of thumb of throughput is approximately quadruple the channel frequency width. A 10MHz channel width should have a theoretical throughput of about 40Mbps.

The lack of channel bandwidth in the 900Mhz band is one reason that it never caught on very well. The other reason is that the noise floor is significantly higher in the 900MHz band than it is for other unlicensed bands. Because of the NLOS nature of the band, it’s heavily used for SCADA, baby monitors, cordless phones, ham operators, and many other things. In any major city or suburb, you probably have noise levels in the 50-60dBi range which makes it very difficult for most WiFi based chipset radios to operate.

The third problem with the 900MHz band is that laying out a network design for a large area is significantly more difficult. In 5.8GHz, the antenna beam patterns are pretty well defined, the signal can’t penetrate lace curtains, and it has limited reflection characteristics compared to the 900MHz. For those reasons, it’s relatively easy to define optimal tower locations. 2.4GHz sort of falls in between but the noise figures for 2.4GHz will still be lower than 900MHz at ground level. At the tower locations, I can imagine it’s a toss-up as to which frequency band will have a higher noise level between 900MHz and 2.4GHz depending on the population density around the tower. 900MHz on the other hand, bounces around like a Superball in bathroom, needs a Fresnel zone the size of Delaware, and just feels a little tickle when busting through a brick wall.

Verizon is probably about halfway to deploying their 700MHz LTE system across the country. The difference between them and us is years of experience in 800MHz and software that costs more than my last car. In addition, the antennas they use can be remotely adjusted on the fly in micro increments to fine-tune coverage zones. Since I haven’t heard anything about WISP operators learning to levitate, that means lifts or tower climbs, both of which are significantly more difficult and time consuming than moving a mouse.

With these issues, why would anyone want to use 900MHz band? Well, that is because we really don’t have much of an option. It’s our only option through Sherwood Forest and we need to figure out how to make that work. Let’s first define the environment as being rural which reduces the variables and takes the noise figure off the table. Then let’s assume we are covering about 2 miles in every direction and we have trees all around. Throw in the decision to limit users to a maximum download speed of 4Mbps and upload of 1Mbps for Round 1 and the system design gets a little easier.

The first issue is the AP configuration. Since 802.11n 2x2 MIMO is pretty much standard in the WiFi industry today, the use of it in 900MHz is unique. The Ubiquiti Rocket M900 with a dual-polarity 13dBi 120 degree sector antenna makes an attractive option. Assuming a 20MHz wide channel, the AP should be able to support a theoretical maximum of 60-100+Mbps of aggregate bandwidth. However, we have to put 3 of them on the tower to cover 360 degrees and I guarantee we aren’t the only squatter on that land. That means that we are going to have to limit the channel size to 5Mbps to avoid overlapping channels and minimize interference. It also means that the maximum theoretical throughput is about 20Mbps and from my testing, I would assume 10Mbps per AP.

If we use the 10-1 client/bandwidth formula, then we should be able to support 20 users per AP with a 4Mbps down and 1Mbps up scheme. That’s also 60Mbps of total capacity per tower. Those aren’t bad numbers if you are charging $40 per month per client. If you are using Water Tanks for example, where you can isolate the antennas from each other, you may have the option of using 10MHz channels. There are also antenna shields from sales@rfarmor.net that promise that you can use 10MHz channels and radios on the same tower and they won’t interfere with each other. However, this could also be accomplished with GPS synchronization with close to similar results if the Rockets every support this feature. I’m a fan of as much isolation as possible with multiple APs on the same tower regardless of synchronization so they are in my budget list.

This is where we tie all this together. 900MHz in rural areas is also a great poor man’s Public Safety System. With the right RF engineering and other design features, the same system could deploy 2-10Mbps or more to a police vehicle. Fast handoff hasn’t been resolved yet but I’m working on a couple solutions as I’ve mentioned in other articles. A system like this should cost about 1/20^th to 1/100^th the cost of an equivalent LTE system. I’m not suggesting that this type of system be deployed in any cities or suburban areas that have high noise issues in that band or that plan on deploying a 900MHz smart grid system, but since over 90% of this country is still rural, this capability can be added for at a cost of under $3000 per AP with each AP covering 4-36 sq miles. The cost for the cars is less than $400 without fast handoff or redundancy. Compare that with a typical LTE or WiMax deployment that the police clearly have no money for, and it’s a pretty good alternative for small towns and rural counties.

900MHz is both magical and a pain to work with. It opens up new opportunities in rural areas where wired fears to tread for financial reasons. At the same time, it’s also a little more expensive than traditional 5.8GHz PTP systems but a lot less expensive than most street level 2.4GHz muni systems. However, when compared to 3G speeds, 5GB caps, spotty coverage, or even worse, no coverage, it’s still a far better option. The application of 802.11n 2x2 MIMO technology now makes it a more viable technology for rural areas.

Chapter 17 - Who needs White Space?

It’s time to step up our game. There is no problem generating massive bandwidth from an AP location. We have proven that fact. What we haven’t figured out yet is how to leap tall trees in a single bound or walk through brick walls. If you are willing to add in another 20Mhz of super-powerful, wall-penetrating, obstruction busting, tree smashing signal, then we have solved the problem.

You are thinking I’m going to jump on the White Space bandwagon. I’m sure I will someday but there’s a lot of work that has to happen before that option is available. However, the infrastructure we have designed is pretty flexible and inexpensive. When White Space becomes feasible and cheap (my favorite word), we can add it. In the meantime, we have two other options. I think I will save the best for last though.

White Space is touted for 2 reasons, extended range and building penetration. It also has one big disadvantage. In major cities, there may not be a lot of channels available according to Spectrum Bridge, for White Space to operate. In addition, limited power output from clients is still going to limit high-bandwidth range back to the AP. I also see the 6MHz channels being an issue with bonding being the same problem as trying to run 40MHz outdoors.

Before we jump into this though, let me make note that Ubiquiti just released a stack of new products that are game changers in WiFi, indoor and outdoor, Video Surveillance, and cellular service. These technologies cover everything from Beam-Forming to GPS sync to dual-polarity omni’s. I’ve had to hold back due to NDA’s but we will now start covering how these technologies can be integrated into our Guerilla WiFi design to take the systems to a whole new level. Most of these products are several weeks away from shipping so we have time to develop our system. I do a have a pair of the 900MHz M series 802.11N 2x2 MIMO AP’s in my hands and that is the topic of this article.

Option one is 900MHz. Yes, it’s crowded, noisy, and seriously overused. So is a Japanese subway but people still use it because it’s the best option. Until now though, the best WISPs systems limited users to about 3Mbps under ideal conditions with APs limited to about 7Mbps. There really wasn’t a lot of development in that frequency band due to the interference and reduced band size as compared to all the other unlicensed options.

900MHz has close to the broadcast properties as White Space except for the vastly higher interference. In a municipal system with 16 AP’s per square mile, AP’s are within 600’ so range of everybody. Unfortunately, 2.4GHz can’t penetrate obstructions very well. Brick or Stucco buildings that will suck the life out of 2.4GHz are merely a few dB of loss to a 900MHz signal. At that range, trees effectively disappear. Junior’s frequency hopping baby monitor and the SCADA transmitter hanging on your water meter is now more of a problem than obstructions. In 900Mhz, with 802.11N 2x2 MIMO now being applied, bandwidth isn’t the issue any longer. The biggest problem is interference.

Everything has a threshold though and you just have to find it. With parents, it’s how low your grades can go before you become the prisoner of the bedroom Alcatraz and your friends start filing missing person’s reports. With RF, it’s the difference between the signal and the noise and how efficiently we use the bandwidth. Now toss in a very narrow band, 26MHz, and the total bandwidth throughput from any AP is going to be limited. Oh, yea, did I mention that we only have to go 600 feet?

802.11N isn’t just for 2.4GHz and 5.8GHz. It just hadn’t been applied before in the 900MHz band. Ubiquiti just released several new 900MHz products with 802.11N 2x2 MIMO protocol. Using a 5MHz channel will allow up to 4 APs to operate on one pole, which each one providing up to 20Mbps. However, using buildings and some shielding, might allow up to 4 channels of 10-20MHz in more remote areas to allow up to 300Mbps. I’m sort of guessing here but when I get one of the base station sector antennas in, I will do some testing to determine what would be needed for isolation.

Keep in mind through all of this that we are still dealing with an AP/sector antenna combination that cost less than $500. If budget is an issue and the city thinks that a several 4’ antennas on a pole aren’t their idea of aesthetically pleasing, then look at using 4 of the Nanostation M900 Loco’s. They are very small, and although rated at a 60 degree beam pattern, they can easily cover 90 degrees with a small drop off in antenna gain. In fact, the beam pattern for these radios is way over 90 degrees at 7.5dBi of gain.

The only problem here is that you need one of these radios in or on the house since there is no portable device that can support 900MHz. That starts getting expensive at $200 for the radio and another $50-$150 for an indoor WiFi device for wireless coverage. However, the problem of building penetration is completely solved.

If I haven’t mentioned it before, we only have to go 600’ from an AP location if we have 16 poles per square mile. Realistically though, if we have 16 APs per square mile, I would probably only use a maximum of 4 AP locations with the 900MHz radios for budget reasons. That means we might have to go 1300’. Of course, we are using a proprietary polling scheme and a dual-polarity signal to go that far. If the noise floor starts at -65, the signal level needs to be at -55 or better. At 1300’, even with obstructions, our signal level should easily exceed that.

Trilliant and other Smart Grid companies are releasing MOAB (Mother of All Bombs) 900MHz radios that are up to 1W for residential installations. If you think that a few towers can cause interference, try fighting tens of thousands of radios dropped into the middle of your coverage zones. Motorola 900MHz WISPS from here to Canada are getting hammered and there isn’t a lot they could do about it. There are going to be cities where running 900MHz WiFi may not be feasible. Don’t panic yet, we will take our 2.4GHz game up a notch also.

There are two advantages to the Ubiquiti 900MHz radios to fight interference. One is the dual-polarity MIMO design. In the city though, most radios are using antennas with such low gain, polarity isn’t going to make a lot of difference. However, the M900 product line came out simultaneously with the ability to frequency hop. That means you have 4, 5MHz channels to jump around with at 300ms rates to avoid noise try and punch a signal through. If the Smart Grid density is too high, then even that isn’t going to matter but right now it’s the best option available.

The second advantage is AirMax. AirMax will simply ignore other packets in the band and also eliminate the hidden node problem. Although interference is interference, AirMax AP’s won’t slow down acknowledging other APs in the band.

Ahh, but what works for city folk works even better for country folk. The dreaded trees of death for 2.4GHz and 5.8GHz are merely pin pricks to 900MHz. Toss in the dual-polarity 2x2 MIMO design and now signal will punch through the forests like Ray Lewis through an NFL helmet. Expand out the channel to 10 or even 20MHz, and throughput for a single AP could go as high as 80Mbps.

On the muni-wireless issue, we can assume that designating 4 AP sites per square mile will add about $1000 or about $4000 per square mile. It also adds 320Mbps of total capacity per square mile. Add in the CPE Capex of $200 per client, assume 25 clients need this radio to avoid a truck roll, and you have an additional $5000. If you truck roll, add another $3750 in the Capex column for those of you keeping track.

Based on those numbers with a $30 per month fee and a free install, it will take 17 months to recoup the Capex. Of course, we want to charge $100-$200 for an install to offset some of those costs. In areas where municipal staff thinks antennas are cool and interference is minimal, we could even use four 900MHz dual-polarity sector antennas with 13dBi of gain. That will provide over 6 times the coverage area which might reduce the AP locations from 4 to 2 but it will more than double the cost per AP, which is a wash. There will be scenarios where either option will be more appropriate.

Our second option is the new beam-forming radios. I’ll cover that in more detail in the future. Since the 2.4GHz versions of these units won’t be out for another 4 months or so, there is no hurry. However, they add another 4-6dBi of gain over a sector antenna and 8-9dB of antenna gain over any other beam-forming AP other than Vivato. Add in dual-polarity, which my field testing shows to be worth up to 3dBi more useable gain, and a 16 degree beam pattern to reduce noise (I’m extrapolating from the 5.8GHz beam-forming unit that was announced. The final specs may vary.) and that that’s enough gain to penetrate an extra wall or almost quadruple the coverage distance to a client. I’ll go into the difference between between all the beam-forming units on the market in our next article.

Now we have even more tools to play with for Guerilla WiFi. Theoretically, it wouldn’t be hard to build a 1Gbps AP to work across multiple frequencies with beam-forming and GPs for less than $4000. Taking this concept even further, it also wouldn’t be hard to create a load-balanced, business quality, multi-frequency design that could bond these frequencies together for very high-capacity throughput. There are other variations of this for backhaul, redundancy, and uptime. It’s possible, with a little networking work, to create a mission critical design capable of delivering tens or hundreds of MB’s to a CPE for less than $400 on the CPE side. This type of system could easily deliver 99.999% uptime using unlicensed frequencies, even with scheduled maintenance. And don’t get me started on 900MHz mobile options. The hits just keep on coming.

Chapter 14 - Money Talks

I have gotten calls from many people that want to start a WISP company, whether using a mesh/muni model or a PTMP system. Although I believe there is no better time than now, that doesn’t mean it’s easy but I hope to prove that it’s financially feasible everywhere. Competing against satellite or cellular services like EVDO, WiMax, or even LTE is a no-brainer in areas that have no wireline services. I’ll cover the new Sprint/Clearwire LTE service just announced for Phoenix in another article. I can build small, profitable financial models all day that can provide superior services even at subscriber/bandwidth models of 10-1. There are also other services like VoIP that can be provided but for the beginning of this analysis, we are going to focus on Internet services only. However, let’s take this into the professional corporate/investor level and see what happens.

Breaking this down into 3 areas and 2 types of design models to cover areas. These areas are a gross oversimplification because each area has different RF models that also have to be considered based on how RF friendly they are. However, for the sake of argument, let’s use these numbers:

1. 
   
   Rural – 20 or less potential subscribers per square mile
2. 
   
   Suburb – 600 potential subscribers per square mile (2700 people per square mile in Phoenix)
3. 
   
   City – 3,000 plus potential subscribers per square mile (Boston 12000 people per square mile)

The 2 basic types of models are PTMP and WiFi. So, let’s look at how each of these models can be deployed profitably. We covered inexpensive WiFi systems early on and I still stand by that model, but let’s analyze it a little more critically and see where it fits in the big picture. More important than anything, is it possible to build a system that has the financial strength to be a growing and profitable company versus Joe Technical’s weekend hobby?

As many WISPs have successfully demonstrated, clearly it’s possible to be profitable if you market in some rural areas. Assuming a starting company of 4 people, the revenue generated has to be around $40,000 per month to be profitable at the low end. I’m just summarizing some of the spreadsheets that I have used so you will have to take my word on the cost structure. With an average monthly rate of $30 per month per client, we calculate that it will take 1333 clients to make that type of revenue each month. By all accounts, that’s a pretty impressive size to jump right into. Keep in mind this doesn’t include your original Capex and how much investment you need to get to 1333 clients. It’s not going to be cheap.

If you are a hot-spot provider, you get revenue from hourly, daily, and weekly rates. Those markets are also shrinking in the U.S. for the most part but some new ideas for phone users are coming forth. In this discussion, we are going to focus on the monthly subscribers. There are also other revenue sources such as installation revenue, business rates that are higher than personal subscriber rates, and other normal ISP types of services. Additional services might require additional staff with more expertise, thus raising the associated monthly costs.

Rural markets are easy. Set up a PTMP system on whatever inexpensive vertical assets you can get access to. If there is not a lot of vegetation, these systems can handle36 square miles easily per tower and up to 300+ users per tower. This assumes you don’t already have competition in the area and there is no interference. You just need 7 towers with 200 users on each tower cover your monthly expenses and be profitable. If there are any of these areas left in the U.S., let me know but I’m not going to hold my breath.

However, there are some rural markets that are underserved simply because of distance, vegetation, and costs of deployment. They may not have 1300 clients, but find a few of them with a couple hundred clients per area and the plan still works. Some of these areas were just not reasonable to do with 2.4GHz or 5.8GHz. They may have been a good 900MHz radio option but limits in equipment, the band, and interference mean that most of the 900MHz products either only delivered 1.5Mbps or the cost of deployment was too high. Newer 802.11N 2x2 MIMO equipment that is hitting the market now should allow for an improvement in throughput in these areas with client bandwidth similar to anything available in the 2.4 and 5.8GHz bands and cost far less. Depending on the design, it should be reasonably easy to promise 10Mbps to a client on the wireless link depending on back end bandwidth. 900Mhz isn’t an ideal band due to limited spectrum width and interference in city or even suburban deployments. However, it extends out the range of clients in dense vegetation areas. In most rural deployments without too much interference, I would expect bandwidth off a centralized tower to max out around 160Mbps with the right setup in 900MHz.

Let’s move into the suburbs now. Most suburbs are served by cable, DSL, or a combination of both. To be honest, DSL is simply not living up to the hype of the marketing division. In Phoenix, Qwest advertises speeds up to 20Mbps when they are lucky to hit 3Mbps, even within 1 mile of Sky Harbor Airport in the middle of the city. Move 300 feet and not only can they barely deliver 640Kbps, they can’t keep it running more than a month or two before it to crashes again. In my case, after I complained for the umpteenth time, they told me with one more complaint they would pull out of our business complex leaving me with no wireline high-speed bandwidth. I had to move my office just to get 3Mbps after several years of subpar service. Even if you are satisfied with your DSL service, it only takes one bad technician adding one more client in your area to cause it slow down or crash again. If this is the main provider of service in your area, I say let the best technology win. I will take WiFi based wireless over any area where DSL is the only technology available. That alone means that major cities still have opportunities.

Cable is another matter. Cable companies are promising huge amounts of bandwidth today and for the most part are very technically stable. In Phoenix, I have a 20Mbps circuit. However, I get around 11Mbps on Speedtest or Speakeasy most of the time. Other times I have seen it down to 1Mbps. Even though you may pay for a specific level of bandwidth, there is no SLA that you will be delivered that level as opposed to a business level SLA agreement. The reality is that the bandwidth advertised is the burst speed or web browsing speed. If you download or try to move large files such as video or a file transfer, that speed will be reduced significantly. However, other than fiber to my house which I doubt I will see in my lifetime, it’s the usually the fastest option.

In either case, this isn’t a market where 1Mbps is going to fly. Even Grandma and Grandpa are watching NetFlix. Google TV is no longer an urban legend either. Throw in every game machine out there downloading movies and unless you are willing to run with the big dogs, this is not a battle ground you want to enter. I’m talking about a wireless service where you plan in advance on delivering 5Mbps average to everyone with peaks up to 50Mbps or more and no more than an 8-1 bandwidth to user ration. 802.11 b/g/a won’t fly here. You have to be ready to invest in bringing a large bandwidth pipe in and the subsequent costs of deploying 1333 users. I have numbers on both PTMP and Muni-WiFi models but to simplify this model and since the area is generic, let’s assume a 50-50 model.

Since we are estimating 600 households per square mile (houses and multi-dwelling unit) and assuming we get 20% of that market, we need about 10 square miles to meet our $40,000 revenue total. That also means we need about 4 towers or building assets to ensure we have LOS to all the locations. Estimating a cost of $25K for the backhaul (assuming the entire system is wireless) gives you 2Gbps. However, it might make more sense for a local fiber, MPLS, or even cable backhaul although using a company for your backhaul that you plan on competing against may not be the best idea. Unless you consider bringing an anti-trust lawsuit against multiple telcom providers while they drive you out of business a fun time, you probably want to find other local carriers. In the end, we have determined that the tower installations will cost about $125,000.

Since half the clients are WiFi, we are still going to have to install 16 APs or more per square mile. I’m going to use that number along with some numbers on designs I’m working on now to come up with $30,000K and 360Mbps per square mile. Each AP will deliver up to 100Mbps to start with and if you go back to previous articles, can deliver several hundred Mbps if needed. Since we have the vertical assets, backhaul to the street lights is taken care of. The problem here is that it still costs us $300,000K and is the largest part of the Capex. Additional revenue sources have to be found here to justify this but we will discuss this later.

Our numbers assume that half of the clients will require truck rolls. That will cost $195,000 to deploy. Considering that each technician can do about 4 installations a day, it will take 160 man days to install enough clients. Since there is only about 20 workdays per month, it will take 8 crews to get up to this number within a month. Most of us would have to outsource this unless you have several friends with days off who also happen to work as installers for Direct TV. The revenue on installations will range from $0 to $200 depending on the market. Assume $100 and the net cost of deployment is going to run about $60K.

The other 650 clients can be installed any time since they are WiFi based. Either they can connect directly or some type of CPE device can be made available. Let’s call that a no Capex cost since $50 will come pretty close to the actual cost.

To summarize, the Capex for this model costs $530,000 to deploy. Even if we net $10K per month which is reasonable, this isn’t going to fly financially with a 4.5-year ROI. This is also a maximum bandwidth system than can compete directly with Cable/DSL/LTE or anything else out there for the near future. Scaling it out further doesn’t improve the ROI but it sure increases the revenue stream. So, how can we make it more cost effective? There are two ways, reduce the cost or find more revenue.

Start with the idea that we only need 100Mbps per square mile in the beginning. This reduces tower costs down to $15K per square mile for a backhaul system that will support 720Mbps instead of 2Gbps. We just saved $75K. It also drops the per mile costs of the WiFi system to about $20K per square mile. That’s another $100K on the savings side.

There isn’t much that can be done on the truck rolls other than to consider the option of doing the installations in house. That saves about $50 per installation but it may take 3-6 months to get up to 650 installations. That’s also more reasonable in most models that I have developed. What I didn’t take into account is the advertising necessary for this speed of penetration but there are several cost-effective ways to do this. I’m leaving this number alone for that reason.

The cost is now down to $360K. The ROI is down to 3 years but is still not that reasonable except for this, cable companies are not reducing their rates. In fact, they keep going up along with the bandwidth. One of the reasons is that they are being squeezed on the TV side by content providers demanding more revenue per users. At the same time, it’s much more difficult to raise TV cable rates due to competition from satellite providers and local ordinances. People are also dropping land lines faster than a Bugatti Veyron because of cellular phones. As much as I complain about cruddy DSL service, the reality is that it has also taken many of the Internet clients from cable due to low cost, which helps to drive the prices down. You do get what you pay for however. Hey DSL companies, here is an idea. Instead of trying to bring fiber to the home which you clearly can’t cost justify, how about just bringing it down the street so my little modem doesn’t have to connect 3 miles away across some 20 year old wires. If anybody needed a wireless option, the DSL companies do and they have boxes on almost every street. Having those assets for a wireless design would be my wildest dreams but for some reason, they can’t get off the wired mentality.

There are other revenue sources for this that I have covered in previous articles. Think through some ideas with cell phones, hot spots, multi-dwelling buildings, backhaul, VoIP, other ISP and business services, and the ROI actually starts dropping to about 2 years or less. If you have an existing company that already has sales people, project managers, and office staff in place, then the costs of getting to this point is pretty reasonable. Peg that at about $50K. Starting this project from scratch probably means about $150K. That adds 6-18 months on the ROI. Scaling the system and deploying more slowly puts out the ROI but reduces the Capex as the system starts paying for itself in about a year. There are many ways to play with the numbers but the bottom line is this, it’s now possible to compete with wireline services in any market. I’m also basing my numbers on what equipment can be bought today. I am pretty sure tomorrow may bring many more surprises that will change the financial and technology foundation of WiFi and that tomorrow is far closer than we think.