The Best (and Worst) ISPs

Fixed Wireless Fills the Broadband Gaps

Until recently, people in many rural and suburban areas had no choice for Internet access other than dial-up. Worse, outlying dial-up links are often less reliable than urban lines because data has to travel farther, reducing throughput to as low as 21 kilobits per second. This can cause Web-page downloads and e-mail links to time out as the host server gives up.

Take to the Air

Residents in many such communities now have a new broadband alternative: fixed-wireless Internet service (in which the wireless antenna is in a fixed location). These areas aren't all located on the plains of North Dakota or the deserts of Nevada, however. Loudoun County, Virginia, lies just about an hour's drive from Washington, D.C., yet much of it is still rural, and it lacks both DSL and cable Internet service in some parts. Many professionals who want to work from home move there, only to find that they can't get high-speed Internet access. In response, Marty Dougherty formed Roadstar Internet in Leesburg, Virginia. The wireless ISP serves about 1000 customers who pay $59 and up per month (plus a $250 setup fee) for download and upload speeds of 1 megabit per second or faster.

For example, Doug Schmude moved a few years ago from suburban Washington, which had both DSL and cable service, to eastern Loudoun County, which has neither. To get broadband access for his IT consultancy, Schmude set up an office in Leesburg, where he could get a T1 line. But at his home, Roadstar's wireless Internet service allows him to do his work without having to drive all the way into Leesburg. Schmude says the wireless network's performance and stability are at least as good as that of his previous cable and DSL service. Plus, Roadstar's support is much better than what he got from his previous ISPs.

Subsidizing Broadband

In some cases government subsidies make wireless Internet service practical in areas with too few people for a provider to recoup the cost of setting up and running a network. For example, a low-interest federal loan helped Minnesota-based wireless ISP StoneBridge expand its service to 31 rural towns near Minneapolis and St. Paul. StoneBridge charges residents $59 per month for its 1-mbps (upload and download) service, as well as an $850 setup fee. The loan lets the company serve its rural customers, but StoneBridge makes its money providing commercial Internet service to small businesses, hospitals, and schools. Even though wireless costs less to deploy than wired connections, demand for broadband in rural areas is rarely sufficient to be profitable, says Tim Johnson, StoneBridge's director of strategic alliances.

The cost inefficiency in covering large areas may be why wireless ISPs tend to serve hundreds or at most a few thousand clients. Broadband Wireless Exchange magazine notes that the ten largest wireless ISPs together had 31,355 customers in 2004. Roadstar's Dougherty worries that a major telephone or cable company will enter the market, offering bundled TV, phone, and Internet service at $90 to $100 per month. With that kind of bundling, rural customers such as the users Roadstar serves would become cost-effective for bigger companies.

Galen Gruman