Why WiMax Has Maxed Out

I'll admit it; I fell for the hype.

You'd think as one of those former hard-bitten, nihilistic reporter-types, I would have asked tougher questions about all the WiMax window dressing popping up over the past year. Last August, when I wrote about the new technology in the wake of significant backing by Intel, I heralded it as a hopeful competitor to DSL and cable broadband. (I also plugged into power-line broadband, but that's another story.)

Now it's time to fess up--this tech is nowhere near ready for primetime consumer solutions. Its business applications are limited and its long-term ability to provide mobility is questionable.

WiMax, short for "worldwide interoperability for microwave access," is essentially radio technology that uses fixed antennas to provide two-way broadband connections (up to 75 MBps) to users up to a 30-mile distance (though half that is optimal).

It's got some killer advantages. First, it's actually here; providers have been popping up in several metro areas. Second is price--for about $500 a month, one of the early WiMax providers, TowerStream, offers a 1.54 Mbps connection. That's nearly half the price of a standard T-1 line. And WiMax providers can do this because they don't have to lease lines from big telcos. Any customers within a 15-mile radius of a WiMax antenna can pick up the signal, even using it to power WiFi hotspots within their premises.

Though there's a narrow but profitable market for this technology with small businesses, it's hard to see how it can break out of that niche.

Big companies need security and reliability. Though WiMax providers can offer QoS guarantees and encrypted service, they can't match secure landlines and backup power supplies of T-1 service providers. That makes WiMax little more than a backup.

And WiMax may never attain widespread home use. Installing a receiving antenna can cost hundreds of dollars. Meanwhile, DSL and cable broadband providers have been upping speeds and lowering prices.

There are also larger issues holding back WiMax that combine to serve as an illustration of the bugaboos that can derail a promising technology.


The litany runs a familiar gamut. WiMax signals use public airwaves rather than licensed spectrum, so interference can result, particularly if multiple players saturate a market. Patents and legal issues could at least delay rollouts, and the ever-present standards issue remains a pressing concern.

Last June, the IEEE approved the 802.16-2004 standard, promising equipment interoperability as tested by the industry group WiMax Forum. But some reports indicate developers looking at the standard are reeling from its complexity, which could bode further delays from ongoing modifications.

Additionally, a Yankee Group report projects WiMax CPE (consumer premises equipment) costs will drop from the current $250-$600 range, but not until 2006.

The report goes on to anticipate the most significant impact on WiMax will come from new silicon embedded in laptops and other mobile devices after 2007, based on the 802.16e standard, eliminating CPE. Intel's support will be critical. The company has announced it will release chips for WiMax elements, such as relay stations and towers, in the coming months, and add WiMax support to its notebook PC processors by next year. But skeptics say 2006 or 2007 is a far too optimistic timeline in which to have effective equipment.

The mobility cloud remains the gloomiest on the WiMax horizon. Users want to take their broadband with them, and with notebook adoption expected to double in the next few years and cell phone use exploding, there are too many competing technologies that promise broadband-on-the-go. Cell phone companies are building third-generation (3G) networks, but several, including Nextel, have announced they will not opt for WiMax.

The WiMax 802.20 mobile wireless standard is still a pipe dream in the works, say critics, who estimate it may be four or five years before true deployment. Meanwhile, other wireless solutions on tap, such as Flash OFDM and UMTS TDD, offer mobility and could deliver on their promise earlier.

Why did WiMax get so hot last year, only to fizzle?

This is largely a product of its primary backer, Intel, overstating its case to overcompensate for previous misfires in the broadband arena.

If you go back to recent, but dim, history, Intel backed its favorite wireless standard, HomeRF, over WiFi, only to get steamrollered by the latter. Now it's getting hammered for its WiMax braggadocio.

The chipmaker behemoth has been productive in promoting municipal wireless, calling on state and local officials to spurn lobbying by phone and cable broadband providers seeking to block municipalities and other public agencies from setting up public networks.

For this effort, Intel merits kudos.

But turning its PR gang loose to wax on WiMax deserves opprobrium.

While all the hoopla dust settles, small businesses can turn to WiMax as a low-price alternative, or backup, to T-1 service. Larger broadband providers are also looking at WiMax as an effective last-mile backhaul solution. And there are plenty of rural areas that could use WiMax by putting the antennas on transmission towers.

But none of that restores the glitter to WiMax as a near-term solution for providing ubiquitous, mobile, low-cost broadband.

In the future I'll try to save my waxing for something more productive--perhaps a snowboard or skis while it's still winter.

You can reach Will at wworkman@aol.com.