A Calabasas company, Malibu Networks, is making a strong move to enter the fixed wireless broadband access equipment space with the help of $30 million in second-round financing.
The round was led by CVC Capital Partners, in collaboration with Second Avenue Partners, and also included Fremont Communications, TL Ventures, NextCom Ventures, Dow Chemical Co., Enertech Capital Partners, and GATX Capital Corp. First round co-lead investors, ARCH Venture Partners and Polaris Venture Partners, also participated in the second-round financing.
Fixed wireless broadband has been around for a decade and many companies have eyed it carefully as a way to bypass the stranglehold that traditional telephone companies have on the customer. But the technology has not been deployed quickly because of a host of technical problems. It required strict line of sight, which can be obstructed by objects as seemingly innocent and permeable as tree foliage.
The software typically employed had been developed for other purposes like local area or backbone networks that were less than satisfactory for wireless systems.
Malibu Networks has been working for several years to overcome these problems.
“We’ve approached the technology in two ways. We addressed the physical transmission to develop resilient signals that will penetrate to customers reliably, and we created efficient software protocols that are specific to fixed broadband wireless,” said Douglas Hill, vice president of marketing for Malibu Networks.
According to Hill, the company has filed 21 patent applications with 305 separate claims since 1998.
“It’s about 1,200 pages of patent applications on what we are doing. But that’s not what’s important. People get hung up on it and think the value of the company is in patent applications. But we think it is in building strong technology and shipping it to customers,” Hill said.
The customers for Malibu Networks’ products include the range of communication service providers – incumbent and competitive local telephone companies and inter-exchange long distance carriers in the U.S. and national telephone carriers (PTTs) and competitive access providers internationally. All these providers will resell the wireless bandwidth to both residential and business markets, particularly small to medium-sized companies.
The product marketing plan is global because the construction of fixed broadband wireless systems is on the increase, particularly in Europe and Asia.
Malibu Networks will produce equipment that will reduce transmission problems. Below 11 GHz, many of the problems of wireless systems go away and these signals at lower frequencies can penetrate rain, fog, and trees. At 2.5 GHz, the signals may even penetrate buildings.
Hill says it’s a whole new generation of fixed wireless broadband equipment.
“The existing stuff is slow, expensive and it has a hard time penetrating through to the subscribers. Notice that Sprint rolled out its trial in Phoenix, as opposed to Boston, Portland or Seattle. My theory is that they rolled it out there because the area is flat and there aren’t many trees,” he speculates.
In the U-NII band, Malibu Network’s system delivers 168 Mbps shared bandwidth from each base station. For the typical suburban customer mix, an $80,000 base station will support about 500 business and residential users with high-speed Internet access at various levels of capacity. The system will carry all manner of digital traffic as well, including telephone conversations, file transfers, and video.
Tech trial locations will be selected in February.
Protecting Fort Knox
Westlake Village-based FirstUse.com has formed a strategic alliance with Fort Knox Escrow Services Inc. FirstUse.com will provide a digital audit system, including a digital notary center, to the online escrow company. When Fort Knox takes in files over a computer network, FirstUse.com documents the time and date they were received, verifies the file that was received and that it has not been corrupted or changed while in the possession of Fort Knox.
FirstUse.com was one of many Los Angeles companies featuring their products at the Comdex show in Las Vegas last week.
Making IPO Connections
Conexant Systems’ subsidiary, Conexant Spinco Inc., has filed a registration statement with the Securities and Exchange Commission for an initial public offering of Class A common stock. The parent system is the world’s largest independent company focused on providing semiconductor solutions for communications electronics, with revenues of $2.1 billion in fiscal 2000. The company’s customers include Cisco, Lucent and Alcatel.
The entity being spun off as a new public company is the network access division of Conexant’s Internet infrastructure business operations. Credit Suisse First Boston and Morgan Stanley Dean Witter are joint managers for the offering.
According to spokesman Scott Allen, the IPO is targeted for January. The company has filed an initial draft of its S-1, and is waiting for SEC comment. The S-1 is available under Conexant Spinco at www.freeedgar.com.
Big Brother
Now everybody can watch just about everybody else.
Irvine-based RemoteVideo.com averages more than 21,000 hits per day 600,000 hits per month from people checking their video monitoring cameras and dealers showing potential buyers of the system how it works. The company specializes in remote video security products, an increasingly popular way for management to get an instant look at what’s going on in other locations and departments.
Recent technology advances have resulted in equipment that will handle many more feeds. For example, RemoteVideo.com’s server can take in 256 video inputs, combine them, store them, and forward them to the Web, where authorized managers can take a look-see wherever there’s a camera. The software also offers remote pan, tilt and zoom capabilities, and the video is streamed in real time.
Microsoft Corp. placed cameras all around a new campus it is building in the Southeast to let managers watch construction progress. Execs can sit at their desks and watch the people nailing the nails in real time as the buildings go up.
Contributing columnist Joan Van Tassel has covered technology since 1990. Her book, “Digital TV Over Broadband: Harvesting Bandwidth,” will be published in December by Focal Press.
