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Wide-area WiFi Networks Gazumped? 17 July 2002 Edition
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An email from Aardvark reader Robert Rozee proposes an interesting solution to the problems of dealing with a large telco for your Internet, or even voice communications.

Robert moots the prospect of building community wireless IP networks to replace or supplement the existing telephone network -- and it's an idea that has been suggested by a number of others.

In this column last month I suggested that WiFi was Telecom's Nemesis -- and it is becoming increasingly clear that many others are waking up to this reality.

The real economic impact goes far beyond simply providing an alternative broadband Internet service -- it cuts right to the heart of a telco's core business -- voice and toll services.

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How long before we see enterprising companies popping up who will offer small (or large) communities the opportunity to slash their voice, toll and internet costs through the use of WiFi technology?

How could they do this?

Well take the example of subdivision containing say 100 homes.

At present, each of those homes would require a hardwired phone line (or two) which would come with a hefty rental of around $35/month. However, when you analyse the phone usage patterns of those living in this subdivision you'll probably find that at any given time, only a small percentage of those phone lines will actually be in use.

Obviously the existing system is very inefficient -- although it ensures the telco plenty of steady monthly revenue.

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    Wouldn't it make much more sense just to have a pool of say 50 lines and run something similar to the PABX so that access to them is doled out on demand? Well that's exactly what most telco's do of course -- but there's nothing to stop anyone else from doing the same, at a lower price if they can.

    Now the sticky part is that in areas where the copper is already in the ground, third-parties were pretty much stuffed if they were to try use this type of tactic. Telecom owns that existing copper and the price of ripping up footpaths and roads to lay their own (new) cable puts it well out of the reach of most small companies.

    Enter wireless IP!

    Thanks to this new technology, and the ability to layer high quality voice services over the top of IP, independent operators can now offer a real alternative to Telecom's service.

    Of course there are many hurdles to overcome before the theory becomes a practical, commercial service.

    First up there's the hardware cost. A WiFi board won't work on its own so there's going to be several hundred dollars worth of electronics required at each and every house that uses the service. The cost of this hardware would have to be built into the price of the service in most cases.

    Secondly there's the problem of designing, implementing and rolling out a reliable configuration that will provide the service levels telephone users have come to expect.

    Thirdly, there's the cost of connecting these little networks to Telecom's own network. After all, they won't be much use if you can't ring or answer calls from anyone else who might have a phone but not be on the WiFi network.

    But hang on a minute -- such services already exist and are in widespread use today -- they're called cellphones!

    Why would anyone want to go to all the trouble of building a network of wireless internet nodes in order to deliver voice and data services when companies such as Telecom and Vodafone have already done this? What's more, their services allow you to use very convenient hand-held phones that don't tie you to a power point.

    Yes, it sounds as if the modern digital cellular service has already gazumped the WiFi network idea.

    There's only one problem though -- price!

    Telecom want to charge you up to $8 per MB to send data over its wireless CDMA digital network.

    Hmm... I guess it's back to the drawing board.

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