Charles Arthur On Technology

Broadband gains ground

The announcement by BT a couple of weeks ago that it would stop waiting for local people to express their interest before it upgraded exchanges to broadband was a relief. By summer next year, virtually all its systems should be broadband-ready.

The announcement by BT a couple of weeks ago that it would stop waiting for local people to express their interest before it upgraded exchanges to broadband was a relief. By summer next year, virtually all its systems should be broadband-ready.

There's sense in BT's move: its more recent financial results show that broadband contributed to its profits, because its availability makes existing customers stick with BT, and it produces money for the company even if people go to a rival broadband provider (as long as it's not cable), because BT provides that broadband connection wholesale.

But the move was hugely frustrating to many people who had campaigned, leafleted and held meetings in rural areas, where the prospect of broadband seemed tantalisingly close if only they could persuade enough people to go to BT's website and register their interest. Now, there are no "trigger levels" at the BT broadband site (, only lists of exchanges to be upgraded.

In the absence of upgraded exchanges, quite a few local communities had set up deals with wireless providers who would hook up to a leased line and then provide wireless links, using "WiFi" (aka 802.11b, which runs at up to 11 megabits per second, but usually rather less than that), to connect to the homes and businesses of people who had signed up.

For those wireless providers it has been a tough time, because they have to both find the people who want broadband (who BT knows about, but won't tell the providers) and then to persuade them to sign up with a small company rather than a big comforting publicly-quoted telecoms company. (But at least you could expect that your phone calls to the helpline would be answered.)

But BT has also been surprisingly quiet about a next-generation broadband technology that it is working to roll out. Partly that's because it is a couple of years away, but quite probably it's also because this technology, called WiMax, has the potential to disrupt all sorts of well-laid plans. It's a broadband technology that can reach 30 miles (50km) from a single distribution point. It's wireless. And it's a lot faster than the better-known WiFi (aka 802.11b, now built in to so many new laptops).

Now, there are two sides to this as far as BT's business goes. Let's look at the potential benefits. WiMax solves the "last mile" problem of a lot of broadband installation. The problem arises because the data signals in broadband are sent at high frequencies - beyond hearing - down the phone line; over distance, the level of the signal falls off. This isn't a problem for voice frequencies (around 300Hz), but it is for those in the multi-kilohertz range. Presently the limit is about three miles of copper before the data signal becomes too degraded, although BT is working on technologies to raise this to 10 miles. Even so, plenty of people in rural areas live further than that distance from their exchange.

Enter WiMax. With this, you could serve loads of people with above-broadband speeds (up to seven megabits per second) because it is what's known as a "point to multipoint" system. In other words, it's like a mobile-phone mast - lots of people can use it at once. So, once the exchange is upgraded, there's potentially no need to worry about that copper and its old-fashioned obedience to the laws of physics.

Even better, some of the companies in the WiMax Forum - which, besides BT, includes names such as Intel, Fujitsu, France Telecom and the American operators AAT&T and Qwest - have visions of WiMax providing a mobile service, rather like WiFi hotspots now. And it's rumoured that Intel would like to get WiMax compatibility built into future laptops, because it will be a global standard, just as WiFi has been for the past five years or so.

So what's wrong with this picture for BT? A few things. First, WiMax isn't yet a standard; there's some work needed to get it to the stage where everyone agrees about precisely how it gets the data from one point to another, and manufacturers can know exactly what technical specifications to build to. Officially, WiMax is presently the IEEE standard 802.16a; but it could shift to 802.16d or 802.16e in the next couple of years.

Second, WiMax will be expensive to build for a couple of years at least. Remember how expensive WiFi gear was, back when it wasn't called WiFi? The price of that kit has probably halved since 2000. WiMax is at an even earlier stage in its development. So BT, which has accountants querying every capital spending proposal, will want to hold off putting in WiMax until the price has begun to fall.

Next, the mobile potential of WiMax, while sounding great in principle, could actually upset lots of people inside and outside BT. The company already has a busy WiFi hotspot program (though I think the prices are ludicrously high; essentially they treat would-be WiFi users as forced buyers rather than potential long-term buyers who should be encouraged).

Fast-forward to 2006 or 2007, by which time you might have "mobile WiMax" equipment available from vendors, and BT will face a quandary: should it annoy all those WiFi users by moving over to WiMax, or should it spend the money putting up parallel WiMax and WiFi systems, or what?

There's more. Assume that it does decide to use WiMax as a simple way to reach its rural customers. Now there's the problem of how to connect those customers to the WiMax signal. Rather than the nice simple in-house modem installation that its engineers have been used to, BT would have to train them to install satellite-style dishes or aerials on the outside of houses, and to align them to pick up signals transmitted perhaps from the horizon. That's going to require navigational and technical skills that haven't so far been necessary for your average wire-wrangler.

So you can see that, while WiMax is technically and technologically the complete answer to your and BT's problems of getting broadband to the furthest reaches of these islands, there are a few practical obstacles that don't yield as easily as one might hope. I'm optimistic that BT will find a way through. I have to be, though: I live more than three miles from the exchange. And that exchange hasn't even been upgraded yet. And you know what? I'd really like to have broadband at home, BT.

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