Towerstream announced today that it has partnered with Speakeasy, Inc. for "nationwide distribution of Wireless Broadband services". They're starting with Seattle, with Towerstream acquiring the assets of Speakeasy's ill-fated, high-profile, Intel-funded, "call-it-WiMAX-for-effect-but-it-isn't-really" Broadband Wireless deployment that used the world famous Seattle Space Needle as a base station in mid-2005. Sources have told me that Speakeasy's engineers simply weren't up to the task of learning the minutiae of Broadband Wireless Internet Access, and Speakeasy quietly discontinued the service after a few months.
Stealth announcement - I have posted the press release for this development on our newest Stroh Publications LLC site - Broadband Wireless Internet Access Press Releases.
Partnerships such as this between independent Broadband Wireless Internet Access and independent "wireline" Broadband Internet Access companies are the wave of things to come as "wireline" Internet Service Providers (ISPs) find themselves increasingly marginalized by incumbent telephone companies that are no longer required to equitably resell access to their wireline network into customer premises (and no chance whatsoever to resell fiber or cable broadband services). Companies such as Towerstream simply "leap over" the incumbent telephone company's wireline networks using a variety of Broadband Wireless Internet Access technologies that are capable of speeds up to 1 Gbps. Towerstream is notable for being one of the first (and still few) companies of credible scale to use license-exempt spectrum to provide Broadband Internet Access in urban areas, and offer business-grade service level agreements for such services.
In its previous markets, Towerstream has "gone it alone", and though that strategy is certainly viable, and Towerstream claims (verifiable, now that Towerstream is a public company as of last week), quite profitable, it is slow going. In previous discussions with CEO Jeff Thompson, and in talks Thompson has given at industry conferences, Thompson has repeatedly made the point that the primary limit to Towerstream expanding into new markets is not the wireless systems technology (they're certainly not "waiting for WiMAX"), capital, or even rooftop real estate - Towerstream has been able to "scale" those factors successfully. What Thompson says he hasn't been able to scale rapidly is a trained, capable, motivated sales force, and he would seem to have solved that problem in partnering with Speakeasy and their established nationwide marketing capabilities for (again, resold) wireline DSL and T-1 services.
There are a number of interesting wrinkles to the Towerstream/Speakeasy announcement:
- Towerstream targets only businesses (small ranging to large); Speakeasy targets both savvy consumers who chafe at restrictive terms of service and mediocre performance of DSL service directly from incumbent telephone companies. With Towerstream, Speakeasy now has a way to target larger businesses by offering higher bandwidth services, and Towerstream can move "downmarket" with Speakeasy's established sales channels.
- Both Towerstream and Speakeasy have an enlightened attitude towards Terms of Service, for example, "sharing" via Wi-Fi; both express the attitude that "the customer paid for the bandwidth; the customer can do pretty much whatever they want with that purchased bandwidth." In marked contrast to considerable hand-wringing by incumbent telephne companies and cable broadband providers, neither Towerstream nor Speakeasy has ever experessed any angst over their service being used as "backhaul" for Wi-Fi users.
- Speakeasy and Covad have had a close partnership for some time for both DSL and T-1 services, and it's interesting that Speakeasy chose to partner with Towerstream for Broadband Wireless Internet Access instead of Covad. Covad is increasingly embracing Broadband Wireless Internet Access as another connectivity option to their customers. A recent press release (PDF) mentions "Covad Wireless" instead of NextWeb Wireless, a Broadband Wireless Internet Access Service Provider that Covad acquired several years ago that offers similar scale and capability to Towerstream.
- I predict that Towerstream will find Seattle to be one of its most interesting and challenging markets. Being home to the former McCaw Cellular / AT&T Wireless, this area "knows" wireless... well... at least people around here are familiar with the idea of wireless. Cingular... er... "Wireless-related-parts-of-AT&T" still have considerable presence in the Seattle area, and wireless telephony companies T-Mobile and Alltel have a significant presence here. The Seattle area is one of the first markets for AT&T's "HSDPA" Broadband Wireless Internet Access service.
- Most significantly to Towerstream, Clearwire is headquartered in the Seattle suburb of Kirkland, and while only the lowest-end Towerstream customers would be potential Clearwire customers, Clearwire and Speakeasy appear to compete for the same customer base.
- Also in the Seattle area, Towerstream/Speakeasy will come up against Accelnet, an existing, scrappy Broadband Wireless Internet Service Provider offering much the same services, pricing, and technology. When contacted, an Accelnet executive offered no comment about Towerstream's entry into the Seattle market. Other regional Broadband Wireless Service providers similar to AccelNet worth watching are Freewire Broadband* headquartered in the Portland, OR area and apparently (see their map) "encroaching North", and MetroBridge Networks of Vancouver, BC who has now entered US markets (though no mention of the Seattle area).
* Disclaimer - I have consulted for a sister company of Freewire Broadband.
By Steve Stroh
This article is Copyright © 2007 by Steve Stroh.
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