Local Multipoint Distribution Service (LMDS) is a two-way millimeter microwave technology that operates in the 27- to 31-GHz range. This broadband service allows communications providers to offer a variety of high-bandwidth services to homes and businesses, including broadband Internet access.

LMDS offers greater bandwidth capabilities than a predecessor technology called “Multichannel Multipoint Distribution Service” (MMDS) but has a maximum range of only 7.5 miles from the carrier’s hub to the customer premises. This range can be extended, however, through the use of optical fiber links.

LMDS provides enormous bandwidth—enough to support 16,000 voice conversations plus 200 channels of television programming. Figure L-2 contrasts LMDS with the bandwidth available over other wireless services. Competitive Local Exchange Carriers (CLECs) can deploy LMDS to completely bypass the local loops of the Incumbent Local Exchange Carriers (ILECs), eliminating access charges and avoiding service-provisioning delays.

Since the service entails setting up equipment between the provider’s hub location and customer buildings for the microwave link, LMDS costs far less to deploy than installing new fiber. This allows CLECs to very economically bring customer traffic onto their existing metropolitan fiber networks and, from there, to a national backbone network. The strategy among many CLECs is to offer LMDS to owners of multitenant office buildings and then install cable to each tenant who subscribes to the service.

The cabling goes to an on-premises switch, which is run to the antenna on the building’s roof. That antenna is aimed at the service provider’s antenna at its hub location. The line-of-sight wireless link between the two antennas offers a broadband “pipe” for multiple voice, data, and video applications. Subscribers can use LMDS for a variety of high-bandwidth applications, including television broadcast, videoconferencing, LAN interconnection, broadband Internet access, and telemedicine.

LMDS operation requires a clear line of sight between the carrier’s hub station antenna and the antenna at each customer location. The maximum range between the two is 7.5 miles. However, LMDS is also capable of operating without having a direct line-of-sight with the receiver. This feature, highly desirable in built-up urban areas, may be achieved by bouncing signals off buildings so that they get around obstructions.

At the receiving location, the data packets arriving at different times are held in queue for resequencing before they are passed to the application. This scheme does not work well for voice, however, because the delay resulting from queuing and resequencing disrupts two-way conversation. At the carrier’s hub location there is a roof-mounted multisectored antenna.

Each sector of the antenna receives/transmits signals between itself and a specific customer location. This antenna is very small, some measuring only 12 inches in diameter. The hub antenna brings the multiplexed traffic down to an indoor switch that processes the data into 53-byte Asynchronous Transfer Mode (ATM) “cells” for transmission over the carrier’s fiber network.

These individually addressed cells are converted back to their native format before going off the carrier’s network to their proper destinations—the Internet, Public Switched Telephone Network (PSTN), or customer’s remote location. At each customer’s location, there is a rooftop antenna that sends/receives multiplexed traffic.

This traffic passes through an indoor network interface unit (NIU) that provides the gateway between the RF (radio frequency) components and the in-building equipment, such as a LAN hub, Private Branch Exchange (PBX), or videoconferencing system. The NIU includes an up/down converter that changes the frequency of the microwave signals to a lower intermediate frequency (IF) that the electronics in the office equipment can manipulate more easily (and inexpensively).

In May 1999, the FCC held the last auction for LMDS spectrum. Over 100 companies qualified for the auctions, bidding against each other for licenses in select basic trading areas (BTAs). The FCC auctioned two types of licenses in each market: An “A-block” license permits the holder to provision 1150 MHz of spectrum for distribution among its customers, while a “B-block” license permits the holder to provision 150 MHz.

Most of the A-block licenses in the largest BTAs were won by major CLECs, while the B-block licenses were taken by smaller companies, Internet service providers (ISPs), universities, and government agencies. The licenses are granted for a 10-year period, after which the FCC can take them back if the holder does not have service up and running.

Development History

Bernard Bossard is generally recognized as the inventor of LMDS. Bossard, who had worked with microwaves for the military, believed that he could make point-to-multipoint video work in the 28-GHz band. Not interested in sending high-powered, low-frequency signals over long distances, Bossard focused instead on sending low-powered, high-frequency signals over a short distance. The result was LMDS.

In 1986, he received funding and formed CellularVision with his financial backers. CellularVision then spun off the technical rights to the technology into a separate subsidiary, CT&T, that licenses it to other companies. CellularVision was awarded a pioneer’s preference license by the FCC for its role in developing LMDS. CellularVision began operating a commercial LMDS in metropolitan New York, providing video programming to subscribers in the Brighton Beach area.

In 1998, CellularVision changed its name to SPEEDUS.COM. The company has a network operations center and recently has been expanding the number of operating cells in the New York area and now claims more than 12,000 residential and business subscribers. SPEED service is delivered via 14 fully functional Internet broadcast stations in operation under SPEEDUS.COM’s FCC license covering metropolitan New York.

SPEED subscribers are able to browse the Web using the company’s SPEED modem capable of downstream speeds of up to 48 Mbps, which is 31 times faster than a full T1 line. In the SPEEDUS.COM system, cable programming is downlinked from satellites to the company’s head-end facility, where local broadcast transmissions are also received. At the company’s master control room, the programming signals are then amplified, sequenced, scrambled, and up-converted to 28 GHz.

The SPEED.COM transmitters and repeaters then broadcast a polarized FM signal in the 28-GHz band over a radius of up to 3 miles to subscribers and to adjacent cells for transmission. A6-inch-square, highly directional, flat-plate, window- , roof- , or wall-mounted antenna receives the scrambled signal and delivers it to the addressable settop converter, which decodes the signals. The subscriber receives 49 channels of high-quality video and audio programming, including pay-per-view and premium channels.

Over 100 companies own licenses for LMDS. XO Communications (formerly known as Nextlink) is one of the largest single holders of LMDS licenses in the United States, having invested over $800 million in such systems, largely through the acquisition of other companies that held LMDS licenses. XO is a CLEC and is using LMDS to feed traffic to its fiber networks. Its approach to building out a city is to install fiber. In areas where that will take too long or where permits are too hard to come by, XO will use, in this order, LMDS, Digital Subscriber Line (DSL), and ILEC facilities.

Potential Problems

A potential problem for LMDS users is that the signals can be disrupted by heavy rainfall and dense fog—even foliage can block a signal. In metropolitan areas where new construction is a fact of life, a line-of-sight transmission path can disappear virtually overnight. For these reasons, many information technology (IT) executives are leery of trusting mission-critical applications to this wireless technology.

Service providers downplay this situation by claiming that LMDS is just one local access option and that fiber links are the way to go for mission-critical applications. In fact, some LMDS providers offer fiber as a backup in case the microwave links experience interference. There is controversy in the industry about the economics of the point-to-multipoint architecture of LMDS, with some experts claiming that the business model of going after lowusage customers is fundamentally flawed and will never justify the service provider’s cost of equipment, installation, and provisioning.

With an overabundance of fiber in the ground and metropolitan area Gigabit Ethernet services coming online at a competitive price, the time for LMDS may have come and gone. In addition, newer wireless technologies like free-air laser hold a significant speed advantage over LMDS, as does submillimeter transmission in the 60- and 95-GHz bands. Another problem that has beset LMDS is that the major license holders have gotten caught up in financial problems, some declaring Chapter 11 bankruptcy.

These carriers built their networks quickly, incurring massive debt, without lining up customers fast enough. This strategy worked well as long as the capital markets were willing to continue funding these companies. But once the capital markets dried up in 2000, so did the wireless providers’ coffers and their immediate prospects. The uncertain future of these financially strapped carriers has discouraged many companies from even trying LMDS.

Fiberoptics is the primary transmission medium for broadband connectivity today. However, of the estimated 4.6 million commercial buildings in the United States, 99 percent are not served by fiber. Businesses are at a competitive disadvantage in today’s information-intensive world unless they have access to broadband access services, including highspeed Internet access.

These businesses, including many data-intensive high-technology companies, can be served adequately with LMDS. Despite the financial problems of LMDS providers, the technology has the potential to become a significant portion of the global access market, which will include a mix of many technologies, including DSL, cable modems, broadband satellite, and fiberoptic systems.