Chet Kanojia, the man behind Aereo, is back with another industry play. He has founded Starry, a company that promises to deliver very fast internet speeds – up to a gigabit – wirelessly. Where his last play took on cable TV competition, he is now going after broadband providers.
Starry intends to tackle this by combining multiple frequencies to provide a direct link between a customer and a tower. It’s a really intriguing idea, but I can think of a number of challenges the company has to overcome:
- This is going to require a complicated antenna array capable of receiving a bunch of different frequencies. But so did Aereo, although this is lot more complicated.
- The company says it will be using ‘millimeter’ frequencies and short frequencies don’t travel very far. The company says they will need to have towers that are no more than a kilometer apart, and to support this kind of bandwidth those towers will need to be fiber fed. That sounds like a challenge in a world where people fight against new towers. But this might work well in a downtown with plenty of highrises to use as transmitter locations. Starry says they are shooting to cover 20% of the public and that infers only bringing service to major metropolitan areas.
- Those kinds of frequencies and bandwidth don’t travel well through walls or much of anything else. The Starry website shows their receiver will sit in a window. These kinds of frequencies will require a direct line-of-sight and in an urban area that can get problematic since it’s easy for a building to be in a radio ‘shadow’ if there is another building between it and the tower. Starry is going to rely on customer self-installation and I foresee a number of customers who go through the process only to find out that they can’t see the transmitter. Rooftop outdoor antennas would enable a lot more customers to get service, but would also require a fleet of technicians.
- Distance really matters with very high frequencies and a customer close to a tower will be able to get much faster speeds than one only a relatively short distance further away (like a quarter-mile).
This is obviously only an urban solution because the network needs multiple fiber-fed transmitters. The first market is going to be Boston. The company says that they will sell broadband for significantly less than the competition but has not yet announced the pricing. The company will require customers to buy a $350 proprietary router that enables the technology. Their only product for now is broadband so this is going to be aimed at those who want a lot of speed and aren’t dependent on the cable company bundle for cable TV. If they can make this work they ought to get a lot of interest.
I saw a few other articles about Starry that worried that their would be regulatory pushback from the cable companies. But as long as Starry uses frequencies in ways that the FCC has approved, then there doesn’t seem to be any potential way to push back against this. Their biggest regulatory hurdle will be getting cities to agree to the many needed towers, but there are no state or federal rules that I can think of that can be used to stop such a wireless deployment. The country is already full of WISPs and they are relatively free to deploy wherever they want.
The company has some significant financial backers including FirstMark Capital and Barry Diller’s IAC, Tiger Global, KKR, HLVP and Quantum Strategic Partners. So certainly they have convinced those investors that the technology works. The concerns I listed above are mostly about deployment and if the company can find a make this easy to use for enough customers then they might have something.
Certainly nobody is going to be upset (other than the cable companies) to see another broadband competitor in urban markets. It’s something the country badly needs. We have entered an era where the big ISPs are competing on speed but not on price. In fact, the introduction of data caps is threatening to jack up the prices a lot more for large data users. It would be good to see a low cost alternative as a way to bring some price competition into the market.