Vonage, wireless carrier to sell together

SAN FRANCISCO - A provider of high-speed wireless service to businesses in several U.S. cities is now selling Vonage Holdings Corp. VOIP (voice over Internet Protocol) service along with its data connections.

A deal announced Tuesday between fixed-wireless provider TowerStream Corp. and Vonage Marketing, a unit of Vonage Holdings, is intended to make it easier for businesses to completely bypass traditional carriers for both data and phone service.

The partnership represents an alliance of upstarts against the incumbent telecommunications carriers, which traditionally have brought in a lot of their revenue and profit from voice services and T-1 lines sold to businesses. VOIP services such as Vonage are now making steady inroads against the traditional carriers through low prices and new features. Wireless broadband, which has been mostly a proprietary niche technology, may become less expensive and more common following standardization around the WiMax specifications starting later this year.

Middletown, Rhode Island-based TowerStream has fixed wireless networks in parts of New York, Los Angeles, Chicago, San Francisco, Boston and the Providence, Rhode Island, area. Its customers can get anything from 500K bps (bits per second) to hundreds of megabits per second of bandwidth, said Jeff Thompson, founder, president and chief operating officer. Equipment at the customer's location communicates with a base station five miles (8 kilometers) to 10 miles away, he said. Because it doesn't require wires, TowerStream doesn't have to lay fiber or lease capacity on a carrier's local "last-mile" network in order to reach subscribers.

TowerStream's service is priced starting at US$350 per month; the company offers a 1.5M bps service for $500 per month as an alternative to carrier T-1 lines. There is also a $500 setup fee. TowerStream owns the customer premises equipment.

TowerStream customers have already been able to use Vonage over their fixed-wireless data connections, but now they can buy the two services as a package. A typical subscriber to the 1.5M bps service could get four VOIP lines for $100 per month, Thompson said. TowerStream will install and test an ATA (analog terminal adapter) that Vonage will sell to the customer.

In its networks, TowerStream uses a pre-standard version of WiMax technology. The Aperto Networks Inc. equipment it uses allows TowerStream to give VOIP packets priority on the "last mile" from the base station to the customer's site, ensuring high-quality calls, Thompson said. The company also is using pre-standard WiMax gear from Alvarion Ltd. alongside the Aperto equipment and is studying its quality-of-service features. Following interoperability tests by the WiMax Forum industry group, certified WiMax products should all have the same quality-of-service capabilities, Thompson said.