Covad to Serve 'Pre-WiMax'

DSL provider Covad Communications Inc. (OTC: COVD) isn't waiting for official Wimax products to launch a broadband wireless service offering -- probably in the first quarter of 2006 -- that promises better than copper performance for its high-end customers.

If it sticks to that schedule, Covad will be one of the first established players to launch a fixed WiMax-like service. Sprint Corp. (NYSE: FON) recently said that it plans to launch WiMax services in 2007 (see Sprint Firms Up WiMax Plans). AT&T Corp. (NYSE: T) is plotting a large trial of the technology in the fourth quarter of this year (see AT&T Plots WiMax Trial ).

Covad has been actively testing so-called "pre-WiMax" OFDM products since the fall of 2004. The firm has been running a technical trial using four 5.8GHz base stations in San Jose and Oakland, Calif. Ron Marquardt, director of product development for the alternative access services group at Covad, says that firm has "close to 20 users" on the network right now.

"We're looking at the first quarter of next year" for a commercial launch, says Marquardt. He wouldn't go into details about where the firm plans to roll out services or what equipment vendor -- or vendors -- it plans to use.

But Marquardt does say that Covad won't wait for equipment that has the official seal of approval from the WiMax Forum to start offering its service. The first round of WiMax interoperability tests is due to start this month, and WiMax-branded product is expected on the market late in 2005 or early in 2006 -- right around when Covad actually hopes to launch its offering.

And Marquardt says that Covad is happy to use pre-WiMax kit for its fixed wireless service. "Frankly, the fixed services are not really a big focus of the WiMax Forum," he opines. "That's being driven by companies that are very interested in mobile." (See Mobile WiMax Faces Struggle and WiMax: A Spec Divided.)

Covad says it will use the broadband wireless kit to offer customers a high-speed alternative to DSL. The firm claims it consistently achieves links up to 5 miles from the wireless broadband base station at speeds as high as 5 Mbit/s. In contrast, DSL technologies are unable to make links at that distance, and at 2.5 miles or so from a central office, ADSL will be limited to speeds less than 1 Mbit/s.

"It is offering speeds that you can't do over copper," says Marquardt.

Covad's approach to WiMax-style services most closely mirrors that of startup TowerStream Corp., which has carved out a business for itself supplying business customers in markets like New York and San Francisco with high-speed wireless links (see TowerStream: Unwired in the City).

This model is quite different from the idea of using WiMax to offer broadband services in rural areas that are difficult to wire up. The rural broadband usage model has been touted by vendors like Cisco Systems Inc. (Nasdaq: CSCO) as well as many analysts (see WiMax: Town & Country).

It's probably too early to predict which will be the more profitable business model: High-speed urban wireless delivery or rural broadband deliverance.

Squeeeeeeeeeeeeeal!

— Dan "You Sure Are Purty" Jones, Site Editor, Unstrung