Cellularvision USA Inc wants to muscle in, if not undermine completely, the anticipated hegemony of telecoms companies in providing the broadband motorways of the internet. The so-called superhighways may be no more than a nostalgic memory if the aggressive New Yorker has its way, offering its Local Multipoint Distribution Service System (LDMS) technology, four times faster than ISDN, as the standard internet technology of the future. In June, CVUS started marketing its internet service, CVDN 500, in Manhattan and Brooklyn, where the company offers its 49-channel subscription television service. CVUS owns and operates a multichannel broadband cellular television system, predominantly in New York, under a 1,000 MHz commercial license from the FCC. More interesting in terms of future internet developments, it pioneered LMDS, and technology analysts project a rapid rise in stock value as the cost-effective LDMS takes off in big way. Despite the positive reaction from financiers, and an initial public offering in 1996, it’s worth noting that CTUS has a long way to go. It has yet to register any profits. The net loss for the year to December 1995 was $11.3m, and for 1996, the loss rose to $11.6m. Revenue was $1.2m in 1995, rising to $2.2m in 1996. Notwithstanding gloomy financials, analysts maintain that the company is one to watch. The FCC authorizes CVUS to provide a variety of two-way broadband services, like wireless local loop telephone services, high-speed data transmission, including internet access, video teleconferencing, and interactive TV two- way services.
It is the combination of the internet with those other services that are difficult to implement cost effectively, that is raising eyebrows. CVUS is currently the only commercial operation of LMDS in the US, and charges around $250 for its cellular service, simply transmitting digital data at microwave frequencies, the same frequencies used by cellular phone companies. The key factor is that base stations transmit at the same frequencies as their immediate neighbors, enabling the cost-effective transmission of huge quantities of data. A two stage sending process avoids reception problems. Waves of signals are sent at two levels, above buildings and along streets, and signals are received by subscribers via small satellite dishes. Internet access is enabled via fast modems, providing 500Kbits per second downloads, and the company promises 40Megabits per second later this year. That is over 1,000 times faster than most current modems. The service offers the potential for serious internet use at affordable rates rather than the costs dictated by conventional telecoms suppliers. When the CVUS provides the ability to upload data via cellular links later this year, it will offer cost effective industrial strength internet capabilities unmatched by telecoms carriers. They must bear the high costs of upgrading the existing telecoms infrastructure to broad-band capabilities, but with clever cellular technology, internet operations need not grow on the back of expensive underground wires and cabling. The company announced recently that it has an agreement with Nynex Corp, enabling it to bundle local telephone service to consumers along with the high-speed internet access and subscription television service.