November 2, 1999 Web posted at: 8:37 a.m. EST (1337 GMT) by Sharon Gaudin

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(IDG) -- If you looked at the amount of money being poured into the development of broadband wireless networks, you'd think it was the most popular technology on the planet. But if you looked at actual deployments, you'd wonder what all the hype was about.

So where does broadband wireless stand today?

Vendors are accelerating their investments in broadband wireless networks as a way to bypass incumbent regional Bell operating companies and offer high-speed voice, data and video without having to lay new fiber.

But broadband wireless remains hamstrung by physical limitations, such as the need for a clear line of sight between antennas, and technological limitations, such as incompatibility with other networks, which threaten to preclude widespread adoption.

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Analysts say progress is being made to address the technological and marketing problems that have kept broadband wireless from becoming a widely used service. But it will be at least a year or two before broadband wireless picks up real speed, they add.

"When is this going to take off? Well, that's the question of a lifetime," says Veronica Williams, managing director of ACT, a consulting and analyst firm in South Orange, N.J. "Everybody has been saying next year, next year -- for years now."

She adds that when companies do decide to give broadband wireless a try, they won't jump in all at once. "It's less expensive to start out with one piece of the pipe at a time, and I think most companies will start out with voice and then move to data. It will come piece by piece."

None of this has slowed investment in broadband wireless. In fact, Forrester Research points out that about $6 billion worth of investments have been made in the market in the first half of 1999 alone.

Lockheed Martin Global Telecommunications Group, for instance, joined forces with Telespazio in Italy and TRW to create Astrolink, a $3.6 billion global wireless broadband service venture. The company is expected to begin offering service in 2003.

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Cisco and Motorola recently announced a joint venture to buy Bosch Telecom, a local-to-multipoint vendor, renaming it SpectraPoint Wireless. And telecom giants such as Sprint and MCI WorldCom are buying fixed wireless companies so they can offer customers end-to-end service that bypasses the RBOCs.

Williams adds that broadband wireless has the potential to significantly lower a company's telecom costs. "A lot of companies are looking at it because they're spending a lot of money just on telecommunications," she says. "This would not only drop the cost they're paying to phone companies, but it also gives them more control because they have their own dedicated circuit that they're not sharing with other people."

"We went live with broadband wireless about a month ago for our Internet access," says Lynn Broadway, vice president of administration for StarTemps, a temporary employee service in San Jose. "I have some high-end users who needed speed.... Compare this to getting them a T-1 line, and [broadband wireless] is a lot cheaper and faster. I have a happy group of people here."

"Look at the bottleneck in the last mile," adds Jeannette Noyes, research manager for International Data Corp. in Framingham, Mass. "If companies can bypass, they sure the hell will. It only makes financial sense."

But that bottleneck isn't always so easy to break up. Something as simple as a stand of trees, an office building or even a rainy season can wreak havoc on broadband wireless transmissions.

Henry Hirsch, chairman and CEO of ART Corp., a top-tier provider in Bellevue, Wash., concedes that one of the major drawbacks of broadband wireless is the fact that the microwaves can be easily waylaid.

"You need a clear line of sight between the antennas at the customer's building and the base station," Hirsch says. "But once you have line of sight, the only problem you'll have is a storm. If you're in Miami, which gets a lot of storms, you limit the range between antennas to about .7 miles so it can power through the very densest of storms. But if you're in Phoenix, you can extend that to 1.2 or 1.5 miles."

And that short distance between antennas means that broadband wireless isn't coming to the Oklahoma prairies or the Maine mountains soon. Analysts and vendors agree that it's still best suited to urban areas where a single base station could pick up signals from multiple antennas within a 1- to 2-mile radius.

But broadband wireless still is a ways out even for most businesses in metropolitan areas. Most providers are trying out their services in test areas. ART, for instance, has just opened Internet-only service in the San Jose area. Teligent reports having 3,500 customers and expects to grow that to 10,000 by year-end.

John Gilbert, executive vice president of Rudin Management, a New York-based real estate company, did just that. Gilbert, who works with broadband wireless providers Teligent and WinStar, uses broadband wireless for voice communications for his company, as well as for his more than 3,000 tenant apartments.

"We want multiple carrier choice for our tenants," Gilbert says. "And this gives us redundancy. The backhoe in the street digging up fiber isn't going to disrupt us. We don't have to worry about street-level problem."