From the NY Times:

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

By JOHN MARKOFF

CUPERTINO, 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.

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Wirt Atmar

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