Sprint and Clearwire may grab most of the US WiMAX headlines, but there is growing uptake of the technology among smaller operators using the new lightly licensed 3.65GHz band, and this may support a more attractive business model than the last system for delivering disruptive open wireless services, metro Wi-Fi mesh.

Last week, a small municipal provider, Azulstar, announced that it has already rolled out WiMAX-based services in various towns in western Michigan and New Mexico, including its home base of Grand Haven, Michigan. Like some other early adopters of the 3.65GHz band, Azulstar has grasped the opportunity to enhance a model that originally depended on Wi-Fi - or more significantly, on unlicensed spectrum in 2.4GHz or 5GHz - by using a less crowded and higher quality band, and a more 'grown-up' technology.

The commercial aims will be similar to those of many Wi-Fi mesh users - to use a relatively low cost, all-IP technology to deliver affordable, widely available internet services, with various levels of service from basic cheap or free access, through VoIP and multimedia, up to business services and even mobile hand-off within the carrier's zone or roaming partnerships. This would provide a viable, and differentiated, alternative to carrier services, especially for underserved communities or small/medium enterprises looking for a more cost effective alternative to telco offerings.

All this appeared to make sense in Wi-Fi, and for a while telcos seemed deeply concerned about the competition, and price depressing tendencies, of open access alternatives. But despite some Wi-Fi success stories, often tied into public safety requirements, the use of license-free spectrum always carries the risks of interference and severe limitations on ensuring quality of service - plus virtually no barrier to entry for other competitors, leading to a constant price cutting spiral that also leads to deterioration of quality and to increased congestion.

Enter the 3.65GHz option, peculiar to the US - which, unlike most of the world, does not have the 3.5GHz band open as a licensed broadband wireless frequency. The 3.65GHz spectrum comes with a light license - 'good neighbor' obligations that are sufficient to prevent interference and to allow providers to sign service level agreements and ensure different levels of QoS for different customers. Yet it is very low cost spectrum, and sufficiently close to 3.5GHz that vendors say they are easily able to adapt their kit for that band - the most widely used in the world for WiMAX, and likely to remain that way for many years until 2.5GHz is in broad use. This means that, even though 3.65GHz is a single-country frequency, it will be able to take advantage of the economies of scale of the 3.5GHz WiMAX kit, reducing costs for carriers.

Azulstar, for instance, is being supplied by Alvarion, with its 802.16e BreezeMAX 3650 base stations and CPE, a variation on its existing BreezeMAX equipment for 3.5GHz. Other vendors that tend to target smaller carriers are also turning out systems, including Aperto. The provider has been testing its new service since February in the West Michigan area, and it is now formally launching in the communities of Grand Rapids, Grand Haven, Ferrysburg and Spring Lake, among other locations. In New Mexico, it is launching services in Rio Rancho and Albuquerque, and it has additional markets under construction.

These services will focus on internet and voice for businesses, homes and local government customers, with prices starting at under $275 for businesses, and phone and internet home bundles beginning at $40 per month. It promises symmetric data speeds of 100Mbps for business and speeds of up to 6Mbps for domestic users.

Some of the companies acquiring 3.65GHz licenses - now that we have seen the end of a lengthy debate over anti-inteference rules for the band, which threatened to exclude WiMAX at one time and delayed uptake - are traditional broadband wireless access providers, moving away from proprietary kit; some are new entrants or small wireline carriers; but many are trying to improve on a model that previously relied on Wi-Fi. Azulstar is one of these. It was an early mover in municipal Wi-Fi, having launched services in Grand Haven five years ago, but says - echoing many similar local operators - that WiMAX will offer better reliability, a wider range of grades of performance, and the ability to target specific user groups more easily. It will also, once 3.65GHz 802.16e gains a measure of volume, work out as cheap as Wi-Fi mesh to deploy and run - or even cheaper, especially when considering five-year cost of ownership, and systems that need to support VoIP and video as well as basic data. Azulstar was also early into WiMAX, working closely with Intel - for instance, in 2004 it rescued a project to roll out a metrozone in Rio Rancho, New Mexico, where Intel has several facilities, from the original contractor, and said at that point that it would improve the economics by using a hybrid WiMAX/Wi-Fi network.

Azulstar now plans to upgrade all its existing municipal Wi-Fi networks with WiMAX equipment from Alvarion, Airspan and Redline, rolling out new networks in 3.6GHz across 15 cities in the Midwest and Southwest. In these areas, it will overlay the existing Wi-Fi mesh, which will continue to operate, supporting visitors and residential customers as long as there is demand. Legacy Wi-Fi customers wanting to move to WiMAX will receive a discount toward their adapter. Azulstar now says it will only own and operate municipal systems where it can get spectrum and deploy WiMAX, and in markets where it cannot access 3.6GHz (or other future low cost licensed spectrum options) it will just take on a subcontractor role, using Wi-Fi but with no network ownership.

The company may prove a blueprint for many local providers, and possibly for a future roaming partnership across large swathes of the US, especially in rural areas. Clearwire itself became involved in the municipal market when it won a contract to build out Grand Rapids, also in Michigan, in preference to a Wi-Fi approach - with the primary decider being the ability to offer many levels of services. Other early users of 3.65GHz spectrum include NextPhase Wireless in California, which has gone live in Orange County, plus Towerstream and Pipeline Wireless. Towerstream is an example of a provider that has made a success of fixed WiMAX in the unlicensed 5GHz band, but wants to move to the volumes and mobile potential of 802.16e, which will not be widely available in that frequency.