Quiet, low-key events often can have a big impact. Two weeks ago, TDS Telecom announced new WiMAX-based Internet high-speed data and voice services to 65,000 customers in Madison, Wis.

A big deal? You bet!

First, TDS Telecom is not a wireless carrier. TDS is a wired telephone company, part of Telephone & Data Systems, the 10^th largest U.S. local exchange carrier. Second, TDS is the first local exchange carrier to utilize WiMAX for high-speed Internet access and voice connections over the air. Third, TDS is the first local exchange carrier in the U.S. to roll out true WiMAX (IEEE 802.16e 4Motion™ ) in the licensed 2.5 GHz band. Finally, TDS claims it “invested millions” for six base stations and associated landline facilities it’s using to reach targeted customers in Madison. Having studied infrastructure costs for years, I’ll bet that TDS spent considerably less capex for WiMAX than if it had deployed DSL equipment to the same customers.

Up to now, the buzz on WiMAX has tied it to wireless carriers. In the U.S., the FCC has allocated spectrum for high-speed Internet access services, ostensibly to close the ‘digital divide’ between urban and rural areas, in licensed 2.5, 2.3, 1.7, 2.1 GHz, and 700 MHz, and unlicensed 5.8 GHz frequency bands. With standards now in place, WiMAX is the technology of choice in these bands.

Sprint owns the biggest chunk of 2.5 GHz spectrum, and will use WiMAX for its nationwide 4G network to its existing CDMA and iDEN networks. WiMAX specialist, Clearwire, is building its own network where it owns 2.5 GHz spectrum in select Tier 2/3 markets across the country. Clearwire’s early deployments used Motorola’s pre-WiMAX product, but its new installations will comply with WiMAX. Sprint proposed a partnership with Clearwire to share network builds and to serve each other’s customers that roam into the other’s territory. When the deal fell through, cynics were quick to proclaim WiMAX’s demise. Bad call! The deal was about strategic marketing, not WiMAX. Sprint and Clearwire are talking again. Other carriers, such as TDS, are rolling out WiMAX.

When AT&T acquired BellSouth, it acquired a block of 2.3 GHz licenses that it must build out by 2010. In this case, AT&T Local (formerly BellSouth), not AT&T Mobility, will offer Internet access on 2.3 GHz WiMAX in the southeast where its wired plant comes up short. Furthermore, AT&T just paid Aloha Partners over $2 billion for the largest block of 700 MHz spectrum in the U.S. with the same objective in mind.

Look at the bid winner lists of recent spectrum auctions - Advanced Wireless Services 1.7/2.1 GHz in 2006, and the current 700 MHz auction – and you find an eclectic mix of wireless and wired carriers, cable MSOs, ISPs, various consortiums and investor groups. Granted, the biggest bidders are the national wireless carriers, but there are dozens of smaller, non-wireless players that with one objective in mind – sell Internet access - with WiMAX the vehicle of choice.

In this light, WiMAX is not so much a wireless, as it is an access, technology. WiMAX is not 4^th generation CDMA or GSM. It’s a wireless alternative to DSLs and cable modems. In fact, WiMAX addresses an important and unserved niche where wired plant cannot support high-speed data over long copper loops.

Wired and wireless services are now highly competitive. The new mantra is, “he who owns the most access, wins.” This truth comes home with telcos losing access lines at –7-8% a year. Controlling access to the customer is the key to every service provider’s future revenues. Wireless access is an important enabler.

Little TDS has taken a giant step for the industry. Expect more of its kind to follow.

John Celentano is President of Skyline Marketing.