Wireless internet service providers (WISPs) have hit a breaking point. With fiber players gaining steam and both public and private funding fueling overbuilds of their territories, the heads of several fixed wireless providers told Fierce they don’t expect WISPs to survive beyond the next five to 10 years – at least not in their current form, anyway. Though a few WISPs are determined to hold on to the bitter end, many are evolving to a fiber-first business model as a survival tactic, they said.
In a series of interviews, top executives from Texas-based AW Broadband, Brazos Wi-Fi and TekWav, as well as Michigan-based Cherry Capital Connection painted a picture of a complex environment in which WISPs are facing pressure from all sides. Among other things, they said WISPs are up against rising construction costs, staffing struggles, spectrum questions and the impending retirement of long-time CEOs. But all said a tidal wave of private and government broadband funding is the primary factor forcing their hand, pushing many to begin overbuilding their networks with fiber.
To understand why government money for broadband would be a bad thing for a broadband provider, it’s important to know what kind of deployments officials are willing to fund. By and large, officials have zeroed in on fiber the technology of choice.
In Michigan, Cherry Capital CEO Tim Maylone said that has resulted in money being funneled to electric cooperatives to run fiber to consumers as they upgrade their grid infrastructure. He noted not one but two co-ops which overlap its territory got funding – one from the U.S. Department of Agriculture and the other from the Federal Communications Commission’s Rural Digital Opportunity fund.
According to Maylone, Cherry Capital had started looking into fiber as an option for the future before the co-ops received funding. It was in the process of deciding whether it was worth it to rebuild its wireless network for a fifth and sixth time or just pump that money into fiber. The co-op funding was the tipping point in fiber’s favor.
“It forced us into fiber to survive because where they’re overbuilding us would have caused us to close our doors if we didn’t move to a new market and start building fiber,” Maylone said. He added it is now focused on running fiber in towns where another co-op has said it has no interest in getting into the broadband game. It is looking to hit between 1,200 and 1,500 homes passed by the end of 2023 and is targeting an 80% adoption rate.
“Not every WISP is capable of doing it,” he noted. “I’m willing to go in debt personally…Not everybody is willing to take that leap of faith, 'cause it is a tough leap.”
Beyond the question of what technology is getting funding, there’s also the question of what areas are receiving money. Though WISPs have received federal dollars in the past for broadband buildouts, the National Telecommunications and Information Administration (NTIA) recently decided areas covered by WISPs with unlicensed spectrum will count as “unserved” for the purposes of the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program. That means competitors are poised to get government money to overbuild territory WISPs made the effort to cover when no one else would.
Jim Bouse, owner of Brazos Wi-Fi, called that ruling “bullsh*t.”
“That is not a fair assessment of the situation,” he said. “If you wanted to classify it as underserved, ok, I’ll agree with that. There is an opportunity for improvement. But unserved it is not.”
Matthew Carpenter, co-owner of AW Broadband, told Fierce it has been scrambling to get radios which use licensed CBRS spectrum on its towers in order to buy itself some time. AW is also currently working with Adtran to overbuild its network with fiber in order to further discourage third-party overbuilders.
He noted it is initially targeting low- to medium- density areas that aren’t yet on the radar of larger companies like AT&T, Vexus Fiber, Windstream and Altice USA.
“Our time window to deploy is pretty small,” he said, noting that these operators will likely turn to lower-density areas once larger metros are covered. “That gives us as a WISP a little bit time to make sure we can get every customer we have converted to fiber off the wireless system and happy with us and ignoring the literature that comes in from the new company when they do deploy.”
While some WISPs plan to hang on as long as they can with wireless, Carpenter said most larger WISPs will evolve into fiber-first internet service providers, or FFISPs, over the coming years.
Charlie Vogt, CEO of telecom vendor DZS, similarly told Fierce it is seeing “a lot of WISPs transition their business plan to fiber.” He added it already has some “pretty significant” new business from WISPs in the U.S.
Indeed, like Cherry Capital and AW, Bouse said Brazos is working to overbuild its network with fiber in some areas and deploy greenfield infrastructure in others. He noted it is focusing on historically unserved areas first, since “these people are really happy to see you.” Already its in-house construction crew has built around 110 miles of fiber.
“Most of these little towns are 1,000 population or less and they may have a DSL service in there that is doing 2 to 5 megabits [per second]…and we go in those towns and get everybody hooked up,” he said. It is able to achieve anywhere from 40% to 80% market share, depending on the demographics of the area, he added.
In the next five to 10 years, Bouse predicted traditional WISPs will only remain as providers for a niche market. “They will still be serving pockets. But you won’t have giant WISPs out there doing millions or hundreds of thousands of customers,” he said. “The people that are going to be successful as a small ISP – because that’s where I live, my space – are the ones that have transitioned to fiber and use wireless as a fill-in mechanism or for reach.”
Joseph McGrath, owner of TekWav, told Fierce he believes there will always be a play for fixed wireless access. But it likely will no longer be WISPs primary source of revenue. He said there are a number of use cases for using FWA alongside fiber in a hybrid network. Like Bouse, McGrath said it might be used to extend the edge of the network further to get customers connected until fiber arrives. It could also be used to offer a redundant connection to either ensure reliability or provide dual connectivity to a single home. McGrath said in the territory he serves in Texas he’s received a number of requests from parents looking for a completely different connection for their children.
Whether WISPs are eventually looking to sell down the line or not, Carpenter noted a shift to fiber will make them more valuable companies. That’s because in five to 10 years, everyone will want fiber.
As they make the shift, Adtran's head of strategic solutions marketing Kurt Raaflaub told Fierce it’s important for vendors to offer simple, end-to-end solutions. That’s in part due to both a lack of experience and lack of manpower.
Carpenter agreed. “I’ve talked to three WISPs today that are taking pictures on the screens for what a splitter looks like for fiber. They are at the very early stages of they’re just now putting conduit in the ground. They’re not even sure how to get the fiber through that conduit the right way. They need lots and lots of help,” he concluded.