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Market Description


Local Multipoint Distribution Systems (LMDS) and Local Multipoint Communications Systems (LMCS) refer to broadband wireless systems operating in the 25 - 32 GHz band. The US designation is LMDS, whereas Canada uses the LMCS designation. These systems are point-to-multipoint, and "cellular" in nature, using millimeterwave signals to transmit signals within multiple contiguous, or overlapping cells 3-10 miles in diameter.

LMDS is presently being promoted for a variety of applications, including voice, video, data, multi-media, and high speed internet access. LMDS has advantages over other wireless services for broadband data due to the available bandwidth (up to 1.15 GHz), and the ability to have a relatively high data rate on the upstream channel. The majority of LMDS revenue is likely to be generated by providing low-cost, high-speed access services to small businesses. In contrast, large businesses have shown a preference for (and an ability to pay for) fiber optic-based systems. The penetration of LMDS into the U.S. residential market will likely be limited by the inability of mmw signals to pass through obstructions such as trees that often surround residential areas.

The FCC completed its auction of LMDS licenses in the U.S. on March 25, 1998. The $578,663,029 in revenues raised was much lower than some analysts had predicted. Bidding for A and B licenses in each of 493 basic trading areas was slow, with 181 of the 986 available licenses won with a single bid. 109 licenses covering about a tenth of the U.S. receivied no bids at all. The FCC is likely to hold a reauction of those licenses in 1999.

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this page last updated: 1 October 1999