The Wall Street Journal-20080205-Enterprise- Some Firms Try WiMax to Boost Their Internet Hookups- Speed Is a Plus- But Mobility Might Be Limited

Return to: The_Wall_Street_Journal-20080205

Enterprise: Some Firms Try WiMax to Boost Their Internet Hookups; Speed Is a Plus, But Mobility Might Be Limited

Full Text (927  words)

Some small companies are exploring WiMax to improve their office Internet connections.

Providers of WiMax, the technology for wireless broadband connections, are seeing increasing demand from small businesses with unique Internet-traffic demands -- including firms that need a second Internet source or a backup in case the primary line goes out, as well as companies in areas with spotty coverage and those that simply want to switch from traditional service providers.

The appeal? WiMax offers faster uploads and downloads than other broadband connections like DSL and cable. It has more reliable connections in areas that tend to have spotty broadband coverage. And the technology ideally promises to wirelessly connect people anywhere across as many as 10 miles, compared with several yards with a Wi-Fi connection. Such features could be especially useful for small companies that do much of their business through the Web or need to link employees in various locations.

But industry watchers say limitations still exist that may keep many small firms from going the WiMax route. For one thing, the promises of vast mobility have yet to come to fruition, due, in part, to the limited number of WiMax towers up so far. The bulk of the current WiMax offerings still require a wired connection between the satellite dish on the roof and computers in an office to get a signal. The dish itself is wirelessly connected to the nearest WiMax tower. What's more, experts say many small firms still have concerns about the cost of a WiMax connection and its reliability during inclement weather.

While providers are working on products to enhance WiMax, wider coverage and true mobility won't be realized until the larger players -- Sprint Nextel Corp. and Clearwire Corp. -- build out their networks. Both have plans to blanket much of the U.S. with WiMax towers and connections.

Despite the current limitations, WiMax is proving to be useful for Burns & Levinson LLP. The law firm suffered from a slow network connection between its Boston headquarters and Providence, R.I., satellite office, due to increased traffic from employees. Despite requesting more capacity from the firm's Internet service provider, there would constantly be problems, says Chief Information Officer Henry Chace.

So Mr. Chace turned to a WiMax connection from Towerstream Corp. WiMax is now the primary Internet source at the Providence office and is used as a backup system in Boston.

The law firm pays $500 a month for each of two dishes -- one for each office -- which Mr. Chace says costs less than what it would cost to get enough bandwidth from traditional providers to ensure a smoother operation.

A second connection also has become important to businesses that need to be online all the time. The telephone voice services that IfByPhone Inc. provides to other businesses are conducted solely online, so the privately held company needs a constant Internet connection, says Chief Executive Irv Shapiro. Customers also insist on communicating via email, increasing the need to be online.

Before, all data went through a high-capacity Internet line, "which went to a telephone pole behind our building," he says. "If a truck hits that pole or it goes down, we lose our connection."

So, in July IfByPhone got a WiMax connection from Business Only Broadband to use as a backup. The Skokie, Ill., firm now distributes its online traffic equally between the two sources. Mr. Shapiro says the costs for WiMax are roughly equivalent to its other high-speed Internet service, although WiMax requires more upfront costs.

Some small companies end up cutting the cord altogether. When Lou Weisenbacher, who manages IT for Silver Star Motors, called up its Internet provider to get service outages fixed, he was told that he was out of luck. The Long Island City, N.Y., Mercedes-Benz dealership was located near an area notorious for problems.

Silver Star used an Internet connection from Broadview Networks Inc., but the underlying network was owned by Verizon Communications Inc., meaning Broadview had little control over the quality of service.

Last August, Silver Star switched over to a wireless WiMax service from Towerstream. "We've never gone down since," Mr. Weisenbacher says. Silver Star pays less than $400 a month for its WiMax connection, compared with $800 a month for the traditional Internet provider.

Verizon spokeswoman Heather Wilner says there had been service issues in the area as a result of flooding and construction workers accidentally cutting its cable. But the service issues have been resolved, she adds.

Towerstream says 65% of its 900 customers are in the small- and midsize-business category. Business Only says roughly two-thirds of its 300 customers are small and midsize operations.

Some industry observers are cautious about WiMax's prospects in the small-business market, however. They say many firms remain uncomfortable with the idea of a long-range wireless connection due to concerns over its reliability during bad weather. Towerstream and Business Only both say weather doesn't affect connectivity. Some firms also are unwilling or unable to afford WiMax as a backup connection.

What all sides do agree on is that a pickup in WiMax will occur once Sprint and Clearwire build out their networks, put up more towers -- and increase mobility.

Clearwire plans its first commercial WiMax launch in select cities later this year. It is testing the service in several markets. While Clearwire will serve small-business customers, it sees a bigger opportunity with consumers, according to spokeswoman Helen Chung.

Sprint has already turned on its WiMax network in limited launches in Chicago, Baltimore, and Washington D.C., and plans to expand into other cities this year.