Fixed Wireless Services on the Ropes

Fixed wireless, once embraced by carriers as a better alternative to DSL and cable data access, is quickly losing support from its primary providers.

AT&T Wireless Services Inc. last week shut down its fixed wireless business unit, once dubbed Project Angel. According to officials of the Redmond, Wash., company, the unit did not meet financial targets. AT&Ts fixed wireless service, which serves nearly 48,000 customers, will be phased out in the next several months, they said.

The move came one week after Sprint Corp. announced it will no longer accept new customers for its MMDS (Multipoint Multichannel Distribution Service). Sprint officials said the Westwood, Kan., company will wait for MMDS technology to improve before accepting new users.

As for AT&T, fixed wireless may have gotten lost in the shuffle when the company split into separate units last year. Project Angel was given to AT&T Wireless despite the fact that it serves a broadband Internet function more comparable to digital subscriber line than cellular service.

“It did work wirelessly in that it ran over a lot of the spectrum that we inherited from AT&T, so it sort of made sense to bring it into the wireless area,” said Ritch Blasi, a spokesman for AT&T Wireless. “But while we were looking at a business that was going toward mobility, fixed wireless was [more of] a residential offering.”

Other major carriers are showing less confidence in the technology as well. WorldCom Inc. continues to sell fixed wireless services, but the Clinton, Miss., company has no immediate plans to expand. A member of the sales team at WorldCom said the services will be limited for the foreseeable future because “our wireless budget is tight.”

But some members of the wireless industry speculate that carriers pulled the plug on fixed wireless to make room for other services that run on the same spectrum. Earlier this month, the Federal Communications Commission agreed to allow licensees in the 2500MHz-to-2690MHz band, including Sprint and WorldCom, to use the bandwidth for other mobile services. Sprints announcement to halt expansion of fixed wireless came soon after the FCC decision.

“Look at who owns those frequencies,” said Perry LaForge, executive director of the CDMA Development Group, in Costa Mesa, Calif. “The implications of that are gigantic. This was a coup for those guys.”