The role of fixed wireless access networks in the deployment of broadband services and competition in local telecommunications markets: An engineering, economic, and public policy analysis

Through the use of an engineering-economic model, this work analyzes the cost structure of broadband fixed wireless access (BFWA) networks and examines their economic viability to provide voice over IP and broadband Internet access services as compared to Digital Subscriber Line (DSL) and cable modem networks.; On average, costs of BFWA networks are higher than costs of DSL and cable modem networks. Until BFWA electronics become significantly cheaper, it is unlikely that BFWA will be a third option for broadband services in urban areas where both DSL and cable modem services are available. However, in rural areas, BFWA is the only viable choice to provide voice over IP and broadband Internet access services as DSL and cable modem networks are more costly due to longer loop lengths and greater physical plant investment required.; If more spectrum become available, it can be used to lower costs of urban wireless networks. However, in rural areas where systems are coverage, not capacity limited, more spectrum will not reduce network costs. What does help in rural areas is getting spectrum in the right band. Our results show that the use of 700 MHz UHF spectrum instead of 2.6 GHz MMDS spectrum further lowers costs especially in rural areas, because of the longer reach possible at 700 MHz.; To foster the development of BFWA in rural areas, we recommend at least 36 MHz of the upcoming 700 MHz spectrum be licensed in small geographic areas. This would offer an opportunity for providers interested in implementing BFWA networks in rural areas to outbid mobile providers focused on urban areas.; BFWA is the most cost effective technology to provide voice over IP and broadband Internet access services in rural areas, and therefore when and if broadband Internet is included in the definition of universal service, BFWA networks should be qualified to receive universal service subsidies and used as a basis to determine the amount of funding required.