[Updated, 10:10am. See below] When it comes to buying home broadband service, there hasn’t been an abundance of choices. If you have at least two decent options—say, Comcast and Verizon—you’re in the lucky half of the population. One-quarter of U.S. households have no choice at all.
But that’s all starting to change, and the cable giants aren’t the only companies battling to provide more options to consumers. One Boston startup, Starry Internet, is gambling that it can win big by bypassing the existing wired infrastructure and charging less for wireless Internet access—making the business so unprofitable that the larger players walk away. And the startup is doing that by deploying an array of advanced wireless technologies.
It’s a startling vision, given that the big Internet service providers like Verizon, Comcast, and AT&T have long charged consumers $70 per month or more—much more, sometimes—for fast Internet, often in combination with TV and phone service. Those big carriers “have gobs and gobs of money,” says Starry’s CEO, Chet Kanojia. “But their business model requirements are such that they’re not interested in deflating the market from a price perspective. And that’s our stated charter: to make broadband as ubiquitous and as low-cost as possible.”
Starry has built a team of 110 employees in Boston and 25 in New York to pursue that vision. And investors such as FirstMark Capital, KKR, Tiger Global, Fidelity, IAC, Quantum Strategic Funds, and HLVP have put lots of cash behind it: $63 million to date, with another $55 million in Series C funding about to arrive.
Kanojia has a history of raising big sums to take aim at entrenched powers—with mixed results. At New York-based Aereo, he built a service that let users watch over-the-air TV programs on Internet-connected devices. Aereo raised $97 million and signed up tens of thousands of users. But it had to shut down after broadcast networks won a copyright infringement suit in the U.S. Supreme Court in 2014.
Starry Internet’s service—which is available only in Boston so far (more on that below)—costs $50 per month for 200 megabits per second, with no caps on data consumption. For comparison, Netblazr offers a minimum of 100 to 500 megabits per second, depending on the quality of a building’s wiring, for $60 per month. Comcast’s Xfinity brand offers a variety of Internet-only packages, starting at $40 per month for 25 megabits per second and $60 per month for 75 megabits per second, all the way up to $225 per month for 2 gigabits per second. (Most people get their Internet service in bundled form, making it difficult to price the Internet portion alone.) [Comcast sentence updated with high-end plan—Eds.]
The story of how Starry plans to outflank competing ISPs is all about the choices embodied in the company’s technology infrastructure. And it’s one that hasn’t been told fully in the mainstream press. I met with Kanojia last month at the company’s downtown Boston headquarters, and he explained why Starry went with a complex and finicky method of wireless communication over simpler alternatives; why the service comes with its own proprietary home Wi-Fi router, the “Starry Station” (pictured above); and other intricacies that don’t make it into the company’s usual press pitch.
It’s a story that hinges on geeky terms like “active phased array,” MU-MIMO, and OFDM. But it’s worth unpacking, because it shows how risky technical choices can be worthwhile if they’re driven by economic logic. In the end, Kanojia says, “It’s all about getting your cost down.”
First, a bit of history. For most Americans, getting a home broadband connection was long an all-or-nothing proposition. You could get online as part of an expensive voice-TV-Internet bundle from whichever cable or phone company had a monopoly in your neighborhood, or you could basically go without. The alternatives—dialup, DSL, satellite, microwave line-of-sight—were either slow or expensive, or both.
Around 2005, things started to change, at least for the lucky residents of a few chosen cities. Verizon, AT&T, Google, and others began building fiber optic connections to individual residences. More widely, they and other providers like Comcast, under pressure from consumers, began to unbundle Internet service from video subscriptions. [This sentence updated to reflect consumer pressure—Eds.]
That allowed a generation of users to become “cord cutters” or “cord nevers” who eschewed cable subscriptions in favor of Netflix and other forms of Internet-delivered TV. But most cord cutters were still getting their Internet-only service from one of the big telecom or cable companies.
Then came something even newer: wireless Internet service providers or “WISPs” who let consumers sidestep the telecom giants entirely and get very fast service—100 megabits per second or more—via point-to-point radio connections. Service from WISPs such as Webpass and Netblazr came first to residents of large buildings in big, wealthy cities like San Francisco and Boston. (Full disclosure: I’ve been a happy customer of both Webpass and Netblazr. Webpass is now part of Google Fiber.)
Starry is something different still. The first generation of WISPs, including Webpass and Netblazr, extended their range by operating as mesh networks. Each antenna in the mesh acts as a relay, capturing some data for the subscribers at that point and passing along other data to subscribers at points farther along the path. The more hops, the less bandwidth is left for the subscribers at each point—which puts a limit on the capacity of a point-to-point network.
Starry doesn’t work this way. Kanojia explains that its network is a point-to-multipoint system, meaning each base station communicates directly with many end points—typically, antennas atop multiple-dwelling structures such as condominium buildings.
Point-to-multipoint systems don’t suffer from the bandwidth dropoff problem, the way mesh networks do. But there is a real limitation on their range: the strength of the central signal. Many of Starry’s technical decisions, Kanojia says, have been aimed at addressing that problem.
“The core technological things that we have solved are how to do point-to-multipoint at relatively long range in a high-frequency spectrum,” he says.
Let’s examine those things one at a time.
The first part of the solution was to use active phased array technology for Starry’s base stations. A single antenna emits radio signals along repeating wavefronts that expand spherically. But when a row or a grid—in other words, an array—of antennas emits the same signal, the wavefronts combine to create a plane wave—in effect, a beam that’s much stronger (and propagates farther) than any single wavefront. By using a computer to subtly shift the timing or phase of the signal from adjacent antennas—that’s the “active” part—that beam can be steered in any direction, or in a series of directions. In this way, a single base station can aim a strong signal at multiple end points.
“The lay analogy you could make is if you look at an incandescent bulb, it’s just radiating energy in all dimensions,” Kanojia says. “As you walk away, it attenuates. But if you make the source coherent like a laser, it will go miles and miles longer. That’s the way we get range. And if you’re doing an electrically steered phased array, which is what we do, you can basically steer those beams that you’re forming in a sub-microsecond time frame, and that allows you to paint the entire landscape with the energy, one dot at a time.”
But it’s not that simple, of course. Starry’s second tactic is to use a method called MU-MIMO, which stands for multiuser multiple-input, multiple-output. If both the transmitters and the receivers have multiple antennas, MU-MIMO allows data to be sent to multiple devices simultaneously (up to eight, currently) on the same frequency.
MU-MIMO is already used on most home Wi-Fi routers, and Starry decided to use it for long-range communications too. “In radio-frequency communications there is probably one free lunch, and that is MIMO,” Kanojia says. “Essentially what you’re doing is taking the same frequency and spatially reusing it, meaning if you have sufficient separation between those two spatial streams, you can have essentially a new pipe being created.”
Finally, there’s the question of how the data is modulated: how many bits-per-second to try to cram into the frequency ranges available for outdoor wireless networking. That’s where orthogonal frequency division multiplexing, or OFDM, comes in. It’s a way of dividing up amplitude-modulated digital data by broadcasting signals at different angles to the direction of travel, to reduce cross-talk and errors. Or to put it more simply, it’s a way to jam more streams of data into the same channel.
Combine eight spatial streams through MU-MIMO with high modulation rates through OFDM, and you can suddenly deliver tens of gigabits per second to a particular location, Kanojia explains. Add active phased arrays, and you can deliver such speeds to many locations, and to relatively distant locations.
It’s a lot of trouble to go to—which is why it hasn’t been done before. Kanojia says Starry’s engineers weren’t even sure, at the beginning, whether they could build receivers that would convert the densely packed OFDM waveforms at the frequencies used outdoors (around 40 Gigahertz) down to home Wi-Fi frequencies (around 5 Gigahertz) without destroying the data.
But once they’d solved that problem and started filing patents, Starry’s team knew it would have a strong economic case. Long range means that there are more potential customers within the coverage area of each base station. “That reduces your initial capital expense and your operating costs,” Kanojia explains. “And your total expectation of how many customers you need to turn that thing into a cash-flow-positive installation goes down.”
Using OFDM and MU-MIMO, meanwhile, means that Starry’s network has enough capacity to absorb lots of growth. Kanojia calls it “future-proofing” the network. Even if data consumption doubled every year for the next four years, the network would still be only 50 percent utilized, he says. “It’s all about making sure you have sufficient capacity so that, God forbid, if you’re successful, you can actually serve your customers,” he says.
Only time will tell how future-proof Starry’s network really is. “It’s an ambitious promise, given the sort of growth we see in data consumption in broadband,” says Mark Lowenstein, a Boston-based wireless industry analyst. “Certainly a wireless carrier in the traditional LTE bands would never say that.” (LTE frequencies are those used for mobile broadband service, which is almost always data-capped.)
There’s one more ingredient to Starry’s recipe: the Starry Station. It’s a funny-looking triangular device with a screen that displays the speed of the network connection and the health of the router’s connections with each Wi-Fi device in the household. It comes with a Starry subscription, but costs $349 if you want to buy it separately.
Why throw in an expensive router that makes it harder to break even on each customer? Because half of all customer-support calls to ISPs are actually about Wi-Fi, Kanojia says.
“The goal in this was to extend our control all the way from the cloud to your home,” he says. “So if you’ve got a Roku, Apple TV, Xbox, once a minute we monitor the quality of the connection to these devices, and we can say, ‘Hey, we noticed your Roku is first-gen, so you may want to consider swapping that, in particular if you want to watch HD quality. Because otherwise, if we don’t do it, we get blamed for the [slow] buffering.”
Providing custom hardware is all in the service of “redefining what the experience should be,” Kanojia says, “so that we know exactly what’s going on and the customers are going to be happy.”
The company makes other devices too, including a variety of “Starry Point” receivers that residents of single-family homes or small buildings, like brownstones or triple-deckers, can mount on their rooftops or outside their windows. The Starry Points feed data to the Starry Stations in individual units via a building’s internal telephone or Ethernet wiring.
For now, the company is still focused on reaching large apartment and condominium buildings, where it can install a larger, more powerful Starry Point on the roof to serve the whole building. Kanojia says the plan is to make a big push to sign up customers in smaller residences starting in late 2018.
[This paragraph updated to clarify reason for the data rate—Eds.] Already, Starry’s 1-gigabit-per-second wireless signal is reaching buildings that house a collective 240,000 households, Kanojia says. (While the company could, in theory, offer that full gigabit per second to customers, Starry currently rate-limits its plan to 200 megabits per second.) The company doesn’t say how many of those households are actual customers. But it announced last week that it’s ready to push beyond its Boston beachhead, offering beta service in Washington, DC, and Los Angeles this month and 14 more cities by the end of the year.
Lowenstein notes that Starry’s expansion plans are swinging into motion a bit later than expected.
“If you go back and look at what they’ve said publicly, they’re taking quite a while to get to market in a meaningful way,” he says. “They are around a year behind where they said they would be. I would imagine that’s because they’re still tweaking the technology—they are pioneers doing this in the high-gigahertz band. And once they’ve solved the technology piece, what is the installation going to be like? That is the thing, from a cost perspective, that has been difficult for other companies in the same business.”
One new element of Starry’s strategy may help free it from the challenge of signing up new customers on its own. The startup announced today that it plans to license its technologies to other companies that might use it to build and deploy their own broadband networks. Together with California-based chipmaker Marvell, Starry said it would release the reference design for its transceivers (which incorporate Marvell’s Wi-Fi chipsets) to “fixed wireless providers of all sizes…making ubiquitous broadband access closer to reality.”
In effect, the company is trying to position itself at the center of a new ecosystem in which a range of other providers offer point-to-multipoint wireless Internet access, with Starry’s technology under the hood. “This will allow you to basically have a completely different form of ISP,” Kanojia says.
It’s already a time of tumult and transition in telecom markets, as faster 5G wireless technology looms on the horizon and Washington sends mixed signals on telecom regulation. (The Trump administration is simultaneously dismantling net-neutrality provisions and aiming to block the proposed AT&T-Time Warner merger.)
But perhaps that makes it a natural time for a visionary entrepreneur like Kanojia to speak out about his vision. After the Federal Communications Commission voted in December to remove Obama-era rules that forced Internet providers to treat all data equally, regardless of where it came from or where it was going, Kanojia published a statement on Starry’s blog saying that the company supports a free and open Internet and treats all traffic equally.
But Kanojia says he thinks the fuss over the prospect of data throttling or premium Internet “fast lanes” misses a more fundamental point: most ISPs already impose data caps.
“Even an ISP who’s opposing net neutrality won’t throttle your speeds,” Kanojia says. “It’s not in their interest. What they will let you do is run up to a cap and then raise your rate, which is in their interest. This whole throttling racket—red herring. The real challenge is caps.”
Starry’s boldest pledge, perhaps, is that it will never impose data caps—a promise Kanojia says the company can keep because of its huge technology investment. As unrestricted competition makes the Internet-access marketplace even more bewildering, he’s betting that the simplicity of Starry’s message will shine brighter for many customers.
The end of net neutrality “absolutely creates a better environment for us,” Kanojia told me. “My view is it’s fundamentally important to society that consumers have unrestricted access at a reasonable price. It’s just sort of a gut feel we have, that low price, clean, transparent care, and quality equipment and quality service will win.”
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