- SANTA CLARA, Calif.
- Microwaves, best known for their use in the kitchen, are poised to become
the latest wireless technology for beaming Internet and phone service into
homes and small businesses.
- In a briefing for reporters yesterday, Cisco Systems
Inc. of San Jose outlined what it says will be the next generation in Internet
and phone access, which it will debut next year.
- Using low-frequency microwaves, Cisco executives say
their equipment can deliver high-speed Internet connection, teleconferencing,
or telephone service -- without wires or cables. All that is needed by
the user is a special antenna and a box the size of a large notebook with
multiple jacks to plug in computers and phones. The services would be
transmitted via base stations installed throughout a city or neighborhood.
- Such access offers several advantages over current options,
such as cable modems, telephone dial-up access, or digital subscriber lines,
or DSL, analysts say. It moves consumers away from cumbersome wires, and
it's less expensive to install than cable or fiber.
- "It's cheap, and it's fast," said Howard Anderson,
chairman of the Yankee Group in Boston. "I don't have to dig up your
street to lay down cables. All I need are a couple of transmission towers.
That's why this technology is being used."
- In addition, wireless broadband access has two to 10
times the range of DSL, which can only be installed within three or so
miles of a central station. With wireless broadband frequencies, service
can be provided as far as away as 30 miles if the line of sight between
the user's antenna and the base station is unobstructed.
- If obstructed by objects such as trees or buildings,
the range drops to six miles, according to Greg Raleigh, a director of
engineering at Cisco, and the scientist who helped develop the technology
through a company called Clarity Wireless of Belmont, Calif. Cisco purchased
Clarity in 1998 for $157 million.
- Because of its reach, broadband wireless technology can
beam high-speed connections via microwave bands to places where wires would
be difficult or uneconomical to install, such as across rivers or canyons.
That potentially opens the Internet gates to millions of new users, said
Donald Listwin, executive vice president of Cisco.
- As of July, 37.4 percent of the US population had Internet
access, according to Nielsen Net Ratings, leaving more than 160 million
Americans who have yet to sign up for Internet access. Of those who have
Internet access, few have high-speed "live" connections that
are always on, like telephone dial tones. That leaves the vast majority
of Americans as potential subscribers to Cisco's nimbler wireless alternative.
- "Wireless is hot this year," said Chris Stix,
managing director of SG Cowen Securities Corp. in Boston.
- Cisco, generally known as an supplier of Internet equipment,
will not be in the business of selling Internet or phone access. Instead,
starting next week, Cisco will sell the technology to companies that want
to provide the service, from large telecommunications firms to niche entrepreneurs.
- Because the use of these microwave bands does not currently
require licenses from the Federal Communications Commission, small companies
can more easily jump into the business of providing Internet access by
simply purchasing and installing Cisco equipment, which starts at $150,000
for a base unit that can support up to 3,000 simultaneous, active Net users.
- Though it has yet to receive orders for its new product,
Cisco is predicting it will sell more than $3 billion in wireless equipment
next year. Though that amount is just a fraction of Cisco's annual revenue
of $12.2 billion in fiscal 1999, sales of its broadband wireless equipment
are expected to grow rapidly, topping $7 billion in 2003, said Steve Smith,
a director of marketing for Cisco.
- Consumers, however, will probably not see broadband wireless
access until late next year, after service providers have had a chance
to purchase, deploy, and market the new technology, said Listwin.
- In the meantime, Cisco has built an alliance of companies
to support its new wireless technology, including Motorola, Samsung, Texas
Instruments, EDS, Toshiba, Broadcom, and Bechtel, among others.
- Toshiba, Motorola and Samsung, for example, are developing
the notebook-size boxes that would go into homes. Broadcom and Texas Instruments
are making the microprocessors that run the boxes. And EDS, Motorola,
and Bechtel are forming a partnership to help service providers install
- Broadband wireless technology is one of many new areas
for Cisco, which is known primarly as a seller of Internet switches and
routers. In Massachusetts and elsewhere, Cisco has been on a buying spree.
It has purchased eight Bay State companies since July 1997, adding software
businesses to its portfolio.
- Its most recent purchase, WebLine in Burlington, allows
two users in different locations to synchronize their Web browsers. Lands'
End, for example, uses the technology to let two shoppers sitting miles
apart to jointly shop on its Web site.
- In Massachusetts, Cisco employs about 1,500 people in
Burlington, Chelmsford, Lowell, and Lexington. That could change as Cisco
makes more purchases, which it intends to do at a rate of 25 firms nationwide
next year. Listwin yesterday projected Cisco could employ 5,000 people
in Massachusetts in five years.
- "Cisco is so dominant in routers, they need new
worlds to conquer," Anderson said. The company controls 85 percent
of the global market for routers and switches, according to Hoover's Inc.
"You can say that the goal of Cisco is world domination," he
added, only half in jest.
- Cisco's stock rose 2 yesterday, to 917/16, in Nasdaq
trading. Since the beginning of the year, the stock has gained 92 percent.
- This story ran on page C01 of the Boston Globe on 12/02/99.
- © Copyright 1999 Globe Newspaper Company.
- Forwarded with no endorsement implied-- for education,
research and discussion.
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