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[802SEC] FW: Article: 2 Tinkerers Say They've Found a Cheap Way to Broadband

Angela asked that I forward this to the reflector.


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Sent: Tuesday, June 11, 2002 6:21 AM
Subject: Article: 2 Tinkerers Say They've Found a Cheap Way to

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

June 10, 2002

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

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

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

"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

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

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

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.

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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