From the Empire State Building, TowerStream sees most of Manhattan: The article makes the business case for TowerStream: price, simplicity, speed of installation, reliability, competitive angle against incumbents, and large markets available from a very few fixed locations. However, it gets a lot of terminology and technology wrong.

Let's start with: With 700 customers in five cities, TowerStream is the most active player in an emerging industry that sells a technology known as WiMax, or worldwide interoperability for microwave access.

WiMax does not yet exist no matter how many reporters write that it does, no matter how many companies are advertising themselves. It's not critical that WiMax certification is in place: the technology's function and utility is what's important. But it's just plain incorrect to label anything WiMax yet. It's just point-to-point high-speed wireless. Not as nifty a way to say it, I know.

Unlike WiFi, the radio wave technology in airports and cafes that allows users to log on to the Internet from their laptop computers within 150 feet of an antenna, WiMax delivers broadband Internet connections through fixed antennas that send and receive signals across entire cities.

I'm not sure this makes it clear enough that Wi-Fi in cafes is sending signals in all directions. If you install Wi-Fi outdoors with a sectorized antenna, you might be able to get several hundred feet over 45 degrees. And you can run Wi-Fi in the same point-to-point fashion as pre-WiMax and non-WiMax equipment over dozens of miles.

The price is another advantage of the system. TowerStream charges $500 a month for a 1.54-megabits-a-second connection, about one-third to one-half less than the cost of service on comparable T1 lines that phone companies sell to businesses for data transmission. TowerStream can charge less because it does not have to rent connections from Verizon or another former Bell company that runs local switching stations.

I believe this 1/3 to 1/2 figure accounts just for the Internet service, not the local loop: my understanding is that in Manhattan, you could be spending four to eight times $500 for a T-1. More information welcome. In Seattle, you might spend as little as $650 per month for unlimited full T-1 service, and Speakeasy is trying out its competitive wireless broadband for about half that.

Still, there are limits to WiMax's expansion. Because it uses public airwaves rather than a licensed spectrum, signals are vulnerable to interference if providers overload a frequency in a market.

Lack of research here: in fact, what TowerStream is using is not WiMax, and this pointedly shows it. WiMax's formal introduction in Europe next year, most likely, will involved licensed frequencies. WiMax will encompass 2 to 60 GHz, and thus no two WiMax devices will necessarily have the same specifications for frequency or range. TowerStream's wireless service is using unlicensed spectrum. Some speculate that WiMax will be a tool for incumbent telcos to fill unlicensed spectrum and then turn to their own licenses when unlicensed becomes crowded.

TowerStream says that it has acquired the right to force latecomers who install antennas near theirs to move if interference is created. The company also says that its connections are encrypted and not vulnerable to eavesdroppers.

I'm sure the FCC would love to hear about this. TowerStream is operating under Part 15 rules, which state that you can't interfere and you must accept interference. These two competing principles serve unlicensed spectrum well. I'd like to know how TowerStream would force latecomers to do anything: they don't have the right, and the Empire State Building can't restrict tenants on their use of unlicensed frequencies. The building's owners might be able to have a lease for antenna space that says that a newer antenna can't interfere, but I would want to see the court case resulting from that. That's probably the case, and it doesn't make sense to try to interfere or stand one's ground in any case. (See Steve Stroh's remark in the comments for this post for more on this.)

Mobile phone companies, which are investing billions of dollars in third-generation cellular networks, may also increase the speeds of their data connections to compete with WiMax.

That's fascinating, but off base. WiMax's initial thrust and TowerStream's core business is to deliver non-mobile high-reliability service that won't be touched by 3G ever, or at least for some time. 3G won't be able to deliver five nines service level agreements to specific corporations with a symmetrical speed of 1.544 Mbps in any universe I'm aware of this decade.

WiMax technology is too expensive for residential use. The antennas on a customer's premises cost about $500 each, and phone companies and cable providers already sell cheap high-speed Internet connections for as little as $20 a month.

That should read TowerStream's technology. Pre-WiMax equipment and non-WiMax equipment is being widely used for home service, especially in areas where telcos and cable providers aren't offering service.

For now, TowerStream and other providers use proprietary equipment and can beam signals only to antennas on rooftops. The WiMax Forum, which helps set industry standards, has endorsed the technology to deliver broadband to fixed antennas, but there is still no consensus on a standard for users to receive WiMax links on laptops and other mobile devices.

No, the WiMax Forum hasn't. They are working towards a certification standard which will label devices conforming to its interpretation of the 802.16-2004 specification. Maybe endorsed implies that, but certification is the more important issue. I have my doubts that WiMax will materialize on laptops before 2007, if ever, especially if the cell companies continue their 3G deployment. Some view mobile WiMax and 3G as complementary, though, and that might play out that way.

Finally, I do hope the COO pictured in the lead photo in this article is a victim of depth of field and is not standing directly in the microwave beam produced by his company's equipment. It's not safe.