Wireless Microwave
Internet Access Coming Soon
By Alex Pham
Boston Globe Staff

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 the networks.
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.
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