NY Times - 2 Tinkerers Say They've Found a Cheap W

http://www.nytimes.com/2002/06/10/technology/10WIRE.html?todaysheadlines

2 Tinkerers Say They've Found a Cheap Way to Broadband
By JOHN MARKOFF

UPERTINO, Calif., June 7 — Anyone looking for the next big thing in Silicon Valley should stop here at Layne Holt's garage.

Mr. Holt and his business partner, John Furrier, both software engineers, have started a company with a shoestring budget and an ambitious target: the cable and phone companies that currently hold a near-monopoly on high-speed access for the "last mile" between the Internet and the home.

At the core of their plan is the inexpensive wireless data standard known as Wi-Fi or 802.11b, which is already shaking up the communications industry, threatening to undermine the business plans of cellular phone companies by offering a much cheaper method for mobile access to the Internet.

The pair's company, known as Etherlinx, has taken the 802.11b standard and used it to build a system that can transmit Internet data up to 20 miles at high speeds — enough to blanket entire urban regions and make cable or D.S.L. connections obsolete.

Their secret weapon is a technology known as a "software-designed radio," which has permitted them to create an inexpensive repeater antenna that can be attached to the outside of a customer's home. The device, which the Etherlinx executives said they believe can be built in quantity for less than $150 each, would communicate with a central antenna and then convert the signals into the industry-standard Wi-Fi, or wireless fidelity, signal for reception inside the home.

Because of the staggering costs of wiring the nation's homes for high-speed networking, only 7 percent, or 7.5 million homes, now have high-speed Internet access, according to a February report from the Federal Communications Commission.

The two Etherlinx executives say they have a religious fervor to change that by making broadband available widely and cheaply.

"We're bandwidth junkies, and I can't imagine a world in which people don't have broadband," Mr. Furrier said. "That's our mission."

Without venture capital backing, in a garage just six blocks from the garage where Steven P. Jobs and Stephen Wozniak launched Apple Computer 26 years ago, Mr. Holt is making his clever and inexpensive radio repeater by modifying inexpensive Wi-Fi cards, the circuitry that sends and receives the signals.

Although he has partially broken with the Wi-Fi standard, he argues he is doing just what the unlicensed radio spectrum was originally set aside to encourage — innovative wireless network designs.

Mr. Holt, a 54-year-old software designer and engineer who began his career at the Lockheed Corporation in Sunnyvale, Calif., replaces the software that supports the Wi-Fi 802.11b standard with his own code, thereby dramatically extending the range of the cheap, mass-produced hardware. Each repeater contains two cards — one that Mr. Holt has enhanced and another that is able to speak the 802.11b standard to a home computer.

Today, while most of the Wi-Fi industry is working on a more complex technology known as "mesh routing," which involves lashing together hundreds or even thousands of short-range transceivers, the Etherlinx developers believe they have found a crude, cost-effective approach that is capable of leapfrogging the last-mile problem.

"A French engineer would say this isn't the most elegant solution," Mr. Furrier said, "but we didn't care about that. We took advantage of these cheap commodity chips and we just wanted to make it work."

In doing so, they say they believe they not only will be able to skate around the cable and phone companies but dodge the growing industry fears of congestion in the unlicensed Wi-Fi radio band, which is also supporting competing uses such as Bluetooth, an alternative, short-range wireless standard, as well as some wireless telephones.

"The Wi-Fi industry is heading for a train wreck," Mr. Furrier said.

The Etherlinx technology has been operating in a small for-pay trial in Oakland, Calif., for a year. The company began trials here last month using an antenna atop a high-rise building in neighboring Campbell, Calif., where the company has its corporate offices.

Etherlinx is already beginning to attract serious attention from both government officials who are interested in last-mile solutions and corporate executives who believe the lack of high-speed Internet connections is the biggest obstacle to growth in the computer industry.

"We have a huge incentive to see the last mile open up," said Graham Wallace, chief executive of Cable and Wireless P.L.C., one of the world's largest Internet backbone companies.

To attract industry attention, Etherlinx cobbled together a demonstration antenna on the back of a Jeep Cherokee and took it to an industry conference in Southern California last month. Parked in front of the conference hotel, the founders were able to show Intel's chief executive, Craig R. Barrett, that their technology was capable of offering Internet access to the entire hotel as well as to the homes on a ridge behind the conference center.

"I don't think there is a method that has emerged yet as a winner," said Leslie Vadasz, a veteran Intel executive who heads the company's venture arm, "but we are talking to these guys. What they have done is a very smart way of reusing engineering that has been done for other purposes."

Etherlinx began the for-pay trial in Oakland last year after the company failed to get venture capital in Silicon Valley. The company is now selling Internet service commercially to about a dozen customers.

"The V.C.'s are licking their wounds and they don't believe us," said Mr. Furrier, a 36-year-old networking engineer. "That's why we have taken a go-to-market approach."

So far, the company has been run on about $200,000 in private investment — far less than the tens of millions of dollars that have been poured into other Wi-Fi startups.

Etherlinx is not the only company taking new approaches to sending wireless data over longer distances in the unlicensed portion of the radio spectrum. The communications and computer industry is now at work on a second-generation standard known as 802.16, which is intended to address longer-distance communications challenges.

The latest efforts follow the collapse of an earlier attempt to establish a commercial wireless industry based on line-of-sight technology known as the Multipoint Microwave Distribution System, or M.M.D.S. Giant companies like A T & T, Sprint and WorldCom and startups like Winstar and Teligent all developed M.M.D.S. service, but they have either halted development on their systems or declared bankruptcy.

Industry experts said the M.M.D.S. technology failed in part because it required the receiver to be within sight of the transmitter, but also because it required expensive installation and a huge upfront investment to license the spectrum from the government.

"The cost of the license for the spectrum killed them," Mr. Holt said.

Etherlinx is by no means alone in its approach.

Several other companies are also beginning to explore alternatives not requiring line-of-sight that they believe will be more resistant to interference and will be easy for customers to install without expensive on-site help.

Nokia has a research group in Silicon Valley that has been trying to develop such technologies, and Iospan Wireless Inc. of San Jose, Calif., and Navini Networks in Richardson, Tex., are selling products that are along the lines of the Etherlinx approach.

However, Mr. Furrier said he hoped that speed would outweigh size or capital in determining the success of a business in the market. In addition to the company's Oakland trial, Etherlinx is planning to offer commercial service in Campbell, which is not currently served with D.S.L., and in wealthy surrounding suburbs such as Los Gatos and Saratoga.

He argues that the absence of venture funding has actually been an advantage for his company.

"What we've hit on is a low-cost design point and used our fast design to get to market first," he said.