Can Upstarts Still Succeed?

The financial crises of broadband wireless pioneers Advanced Radio Telecommunications, Winstar and Teligent have left this segment of the competitive service provider network with few champions.

A small six-city operation, which uses broadband wireless spectrum to offer 100-megabit-per-second access, is willing to step into that role. e-xpedient/CAVU makes up in brash determination what it lacks in size. The privately funded company, based in Orlando, Fla., has expanded market by market, acquiring spectrum where it was available and building out a mesh wireless network on a building-by-building basis.

The company offers an unusual service package: 100-Mbps data over the wireless link with no long-term contract or commitment from the customer. The bandwidth is available to everyone. Customers pay for what they use at rates ranging from $100 to $5,500.

"We charge more for 300 users than for three," says company president and founder Brian Andrew. "We don't have to get the customers to commit to a long-term contract. We give them a service they want and say that if they ever don't want the service, we'll simply turn it off."

Andrew says he doesn't have statistics on the company's service retention rates but maintains that very few disconnects occur.

The service, also called e-xpedient, is available only in Salt Lake City, Cleveland, Oklahoma City, Orlando, Jacksonville and Miami. The company's unusual footprint was based on spectrum availability and market compatibility, says Andrew. In its first five cities, that meant utilizing 38-gigahertz spectrum widely used in existing broadband networks. In Miami, the company uses 60-GHz spectrum and it also plans to use freespace optics — the wireless laser technology just now coming onto the market.

The company builds wherever demand is not being met, and so far has avoided creating hype around its product offerings.

"We talk about things we have done," Andrew says. "We have satisfied customers."

The Quick and Cheap Method

The network approach is simple: e-xpedient uses licensed or unlicensed spectrum that it has bought at auction or from other owners to connect buildings in a point-to-consecutive-point network that ultimately becomes a mesh network with fail over points for all services. Most recently, it has added the use of freespace optics, says Andrew. Among its announced and publicly happy customers, e-xpedient includes real estate company Jones, Lang and Lasalle, Cleveland-based Ohio Savings Bank, Grubb & Ellis Utah Realty in downtown Salt Lake City and the Salt Lake City branch of Capital Suisse.

"Our customers don't see us as a wireless service provider," he insists. "We are using wireless technology the way MCI used microwave."

As most relative newcomers to the industry have forgotten, the first serious long-distance competitor to AT&T was a company named Microwave Communications Inc., or MCI. It used microwaves to provide long-distance networks because that's what it could get up and running most rapidly. Later, as it built a customer portfolio, MCI had the time and money to build out wired facilities.

e-xpedient connects to customers via existing Ethernet local area networks, connections which Andrew says are quick and cheap. "Ethernet cards cost less than dial-up modems," he says.

The company gets generally high marks from analysts, but they remain cautious as to whether any competitive carrier can succeed in today's market.

Andrew is unfazed. e-xpedient will build out its wireless network in 15 to 20 cities in the next 18 months, focusing on buildings where business use of the Internet is strong. It's a strategy espoused by a number of competitive players — XO Communications and Yipes!, to name two — and it remains to be seen whether this brash young upstart can maintain its positive record in such company.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in The Net Economy.