Mobile Data Beamed Across City Skylines
By C.J. Kennedy, Thu Nov 22 00:00:00 GMT 2001

Lasers that transmit data at over 1 gigabyte per second may be coming to your neighborhood.

FSO stands for free space optics. They sound like something from Star Wars, but the machines look more like a large, twentieth century hair dryer.

At the Terabeam offices, on the thirtieth floor in 825 36th Avenue in Manhattan, the head of the hair dryer is angled upwards, pointing out a window. It is communicating with a similar machine six stories up and a couple of blocks away.

A large flat-screen television hangs from the ceiling nearby, on which four DVD movies are playing at once. On a larger screen a high-definition movie is projected. On another large screen a live feed of downtown Seattle plays, and on a third large screen there is instantaneous video conferencing with a Terabeam employee in Seattle.

All the information is coming through the laser feed, through carrier hotels in the city, and then along a long distance AT&T fiber line from Seattle. A television directly over the Laser machine shows a read-out of 46 - that is the amount of megabytes that are being used by sending this amount of data.

Easier and cheaper

Merrill Lynch estimates that FSOs currently only account for 5% of last-mile connections for buildings, so although Telecommunication Magazine named Free Standing Optics as one of the ten hottest technologies of 2001, this is a technology which people are only starting to hear about.

That will change. With costs that are roughly half of a fixed wireless solution - a 500 meter point-to-point FSO link costs about $18,000, while a fixed wireless solution costs $30,000, and laying new fiber under the street could be as much as 30 times more - FSO is a solution which will see large growth in demand.

Even with the sharp decrease in the cost of fiber optic cables, FSO make obvious sense. Baksheesh Ghuman, Chief Marketing Officer at LightPointe, a San Diego-based company, says that the majority of the cost of fiber cable is not the actual fiber. "The cost of laying fiber is not going to go down," he says. "85% of the cost of fiber is the labor, and the price of labor is not going down."

FSO also offers the simplest method of installation. No streets are ripped up, no building rights or roof rights are needed. The FSO laser in Terabeam's office sat next to the window.

Gordan Davis, Director of Media Relations for fSona Communications, a Richmond, British Columbia based company that has been around since 1997, explains that their lasers can be set up instantaneously. "One of the great advantages is that you can survey a sight and do the installation in about an hour, without a license," he says. With these advantages, Merrill Lynch predicts that the FSO market will grow from $100 million in 2000 to $2bn by 2005.

Line-of-sight technology has obstacles before it

Although FSO technology does offer advantages in terms of price and speed of deployment, FSO technology has some visible problems.

FSO technology uses low-powered lasers and a telescope to transmit single or multiple wavelengths of light that carry between 155mbs and 2.5 gigs of data. On a clear day the FSO laser can reach 5 kilometers, but the longest distance recommend between lasers is 1.5 kilometers by FSO companies. Line-of-sight technology has drawbacks - fog being its greatest problem, as the small moisture drops act like mirrors, which diffract the beam.

Terabeam, a Seattle-based FSO company founded in 1997, sees the fog problem as surmountable. In times of dense fog, shades lift from the laser and increase intensity of the beam. At the present, Terabeam's largest network is in Seattle.

At the Terabeam's offices in Manhattan Lou Gelles, Terabeam's spokesperson uses a large plastic disk, the shape of a large platter, to obstruct the laser. The movies continue as he flashes the disk through the invisible beam. This is to show that the message will not be interrupted if a bird flies through the beam. Only when the disk covers the entire beam does the movie stop. When the disk is removed the movies start up again. "When data is interrupted the message continues from where it stopped, so none of it is lost," Lou Gelles explains.

One other problem with the technology is "building sway." Buildings sway in high winds, to the extent that the lasers may not connect. Terabeam offers tracking technology and the wide beam to counter this problem. Companies like LightPointe and fSona Communications use four separate beams to make sure at least one beam is communicating the data.

FSOs - the clear alternative?

Heavy snowstorms also seem to pose a problem, although Lou Gelles says that snow will not cover the entire laser. But he adds that window washers have been known to interrupt data. For some corporations this may be acceptable, but for a company like Merrill Lynch, that has recently set up a 3gig ring between their New York City offices, trades need to be instantaneous. Lasers may eventually be part of a diverse high-speed network for such companies, but it's not likely that they'll completely replace fiber.

In cities as built up as Manhattan, line-of-sight does not include every building. As I looked out of the window I could only see up to a wall of offices a couple of blocks away. An intense network would have to be built for every building to be available - and this would mean an intense marketing team as well as roof rights on some buildings.

Smaller cities would have similar problems as buildings are not tall enough to be in the line-of-sight of other small buildings - think of Paris where all the tall buildings have been zoned to the outside of the city. This also increases the difficulty of offering high-speed data to every building.

Raise the estimates

Still, the estimate by Merrill Lynch of a $2 billion FSO market by 2005 appears a little low.

Companies involved in their market include Terabeam, LightPointe, fSona Communications, as well as Optical Access, AirFiber and Rockefeller Telecommunications Services, with Lucent, Cisco, Corning and Nortel testing the potential of lasers through stakes in Terabeam, LightPointe and AirFiber. These companies are looking to exploit the fiber market in ways that can increase their revenues geometrically.

The first way is by targeting smaller companies and smaller office buildings. Due to the cost of laying fiber under streets and through buildings, traditional fiber companies only stand to make a profit by wiring class "A" buildings with a million square feet or more. These class "A" buildings only account for 5% of all office buildings, by LightPointe's estimates. 95% of office buildings are not even in the market for optic fiber connections - but prime customers for FSOs.

The second way FSOs can increase the market is through reselling their technology through major carriers. On October 3rd, Utfors Bredband AB of Sweden announced that they would be Terabeam's first reseller of its Fiberless Optics equipment. fSona uses General Dynamics for their technology installations globally, and they are preparing to make major announcements of deals with carriers in Europe and the U.S.

On September 13th Qwest became the first major carrier to install FSO equipment, using LightPointe's lasers.

For the past couple of years FSO have been quietly looking for an opening. With increasing press and carrier attention FSO is on the brink of growth that would make it a rival to optic fiber and allow it a larger share of the market than wireless LANs.

C.J. Kennedy is currently the senior staff writer for, and has covered the mobile industry for M-Business Magazine, The Wireless Developer Network, Wireless Business & Technology, Wireless Related, and The Industry Standard.