Boston Internet service Starry, aiming to take on its bigger rivals, raises $100 million
Starry Inc., the Boston-based wireless Internet service, is bulking up with a $100 million funding round, which the upstart company will use to expand nationally in the high-stakes race to deploy super-fast broadband services across the United States.
Starry uses a type of extremely high-frequency radio technology to deliver broadband Internet service at speeds rivaling those from landline broadband companies such as Comcast Corp. and Verizon Communications. It recently was launched in Los Angeles and Washington, D.C., and has begun building networks in 14 other cities, including New York, Chicago, Seattle, Cleveland, and Indianapolis.
The technology requires only a small exterior antenna that is wired into a building’s communications equipment. In Boston, Starry has targeted apartment buildings and says its service can reach 300,000 households here. It charges $50 per month for a connection with speeds of up to 200 megabits per second.
The surge of new cash will support the company’s network buildout. With the additional capital, Starry has raised a total of $163 million from venture firms, including KKR, Firstmark Capital , and Tiger Global.
Starry is also facing off against the nation’s leading cellular companies — Verizon, AT&T, Sprint, and T-Mobile — all of which have committed to deploying ultra-fast 5G wireless networks that will deliver data at much faster rates than today’s services. The 5G systems will offer broadband connections to fixed locations, as well as to cellphones and other mobile devices. As a result, they could spur fresh competition in the home broadband market and drive down prices for consumers.
Only recently have the cellphone companies agreed to an important technical standard for 5G networks. Starry uses an entirely different technique that’s based on Wi-Fi, although chief executive Chet Kanojia has said his company might eventually migrate to 5G if it can be done at a reasonable cost.
Verizon is deploying a 5G network in Sacramento and Los Angeles, while AT&T is targeting 12 US cities for service this year, with T-Mobile and Sprint expecting to follow sometime in 2019. However, it will take time for 5G services to catch on, because current wireless devices do not work on those new networks. Consumers and businesses will have to buy new smartphones or new wireless receivers with 5G technology.
Kanojia has proven that he doesn’t mind challenging big rivals. His previous company, Aereo, provided a service that beamed television shows over the Internet, without paying retransmission fees to the broadcast networks. That practice threatened the core business model of the broadcast networks, which sued to block Aereo. In 2014, the US Supreme Court ruled Aereo had violated the networks’ copyrights, a finding that drove Aereo out of business.
High-speed broadband service has become an issue in the global economic race between China and the United States.
China has made rapid deployment of 5G networks a key priority, while the Trump administration has declared that American leadership in 5G networks is a matter of national security.
In March, the administration blocked the Singapore-based chip company Broadcom from acquiring Qualcomm, a major maker of 5G chips that’s based in San Diego. And in January, the administration flirted with the idea of having the government build a single national 5G network. But that plan was abandoned almost immediately in the face of intense criticism from lawmakers and the Federal Communications Commission.