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Vieques: Wireless Hot Spot In The Caribbean - Source: Forbes

Nikhil Hutheesing, Forbes Wireless Stock Watch, 04.11.05, 6:26 PM ET

NEW YORK - When you see the blue Caribbean water lapping up against the sparkling white beaches of Vieques, it's hard to imagine that for 60 years this beautiful island was a war zone and was off limits to travelers. Vieques is a tiny island just off the eastern coast of Puerto Rico. Since the 1940s, the U.S. military, which purchased 60% of the 52-square-mile island, used the waters as a training ground for bombs, missiles and other weapons. The Navy finally pulled out of the island in 2003 and gave the island community $40 million to help with the environmental clean up and develop infrastructure.

Given Vieques' miles of undeveloped Caribbean beachfront, it is no surprise that development is coming fast. Already Americans and Puerto Ricans from the main island are buying up land and resort hotels are beginning to crop up. But there is something else happening too. This sleepy island--long without adequate communication services--could very well leapfrog ahead of many places such as San Juan, and even U.S. cities, thanks to the implementation of wireless networks. Indeed, Vieques--a test bed for weapons for six decades--is now a test bed for wireless and will, I believe, show how wireless implementation can lead to rapid economic development.

I got a glimpse of it already, while I was in Vieques two weeks ago. I had the opportunity to meet with William Ben Tutt and Joe Najjar, the managers of Vieques' biggest employer, the Wyndham Martineau Bay Resort (nyse: WBR - news - people ). The 156-room resort opened its doors in January 2003 and is the first major development since the Navy left. A month ago, the Spanish plantation style resort added a Wi-Fi network that extends some 50,000 square feet, covering the main reception, the swimming pool area as well as the ocean front rooms. The network, based on 802.11g technology, is the largest and most powerful Wi-Fi network on the island and can transport data at speeds up to 54 MB per second. Before long, Tutt says the network will expand even further on the resort property.

Putting up Wi-Fi networks at remote resorts has become increasingly common. Ernesto Pena, owner of Vieques-based Island Hop Computer Network Solutions--the company that installed the Wi-Fi network at Wyndam--says that the combination of a remote island with a fast wireless network will help to boost tourism. "Lets face it," says Pena, "These days, even when people go on vacation, they take their work with them. They want to connect to the office in the morning and then go to the beach in the afternoon."

The wireless network at the Wyndham Martineau Bay Resort is not an isolated occurrence on this small island. Indeed Wi-Fi networks are sprouting up all over Vieques. Island Hop rents space on six cellular towers located in Vieques owned by major carriers such as Verizon Wireless (nyse: VZ - news - people ), Sprint (nasdaq: FON - news - people ) and Cingular. It then places transmitters and receivers on the towers and builds Wi-Fi networks. According to Pena, about 60% of the island is now served by high-speed Wi-Fi networks, and 90% will be covered by the end of this year. That says a lot. Two years ago, Vieques was ten years behind other U.S. cities in terms of wireless infrastructure. By the end of 2005 it will have surpassed some U.S. cities.

There are other contenders for wireless broadband access globally, but here Wi-Fi has an edge. Thanks to installations by the military, people who live on the north end of Vieques have access to DSL, through Puerto Rico Telephone. But the wait is about one month to get the technology installed. Wi-Fi can be up and running within three days. Also, in the southern part of Vieques, there is no DSL, so Wi-Fi is the only Internet access offering. The island is also very focused on developing tourism without harming the environment. With Wi-Fi there is no digging trenches or cutting down trees.

Part of the rapid growth in wireless in Vieques is the result of the Navy's presence. About a decade ago, the Navy installed oceanic fiber lines for a high-speed communications network. Those lines can now serve as a backbone for a wireless network though they have to be updated to accommodate Vieques' 10,000 residents and thousands of tourists.

It didn't always seem that Wi-Fi would be the wireless technology of choice. Back in the mid 1990s, Puerto Rico's governor at the time, Pedro Rosselló, initiated a strategy to link all of Puerto Rico's government facilities using high-speed cable. With those facilities linked, the next step was to expand the network for use by all Puerto Rican citizens. The organization heading the project, known as PRStar.net, realized that the most cost effective way to accomplish this was by using wireless technology. The organization turned to Proxim (nasdaq: PROX - news - people ), a Sunnyvale, Calif.-based wireless network equipment manufacturer, for its Lynx DS-3 spread spectrum technology to provide data, voice and video services.

The build-out was completed and now serves somewhere between 1,200 and 2,000 offices in 79 municipalities in Puerto Rico. But it fell short of the ultimate plan, which was to extend the network to over 4 million people in Culebra, an island neighboring Vieques and the main island of Puerto Rico. The island's inhabitants would have been able to get onto the Web, exchange e-mail, video and multimedia and make wireless calls. But the plan was abandoned just as the initial build-out of the network was completed because the government changed and the wireless networking was put on the back burner.

Now, as Wi-Fi spreads across the island, there are signs, that the original network could be revitalized. According to PDC Telecom, which helps to implement wireless networks in Puerto Rico, over the past two months, orders for wireless networking equipment are coming again from PRStar.net. That's very exciting news because if this network can expand from private, governmental use to serve the people of the region, it could do a great deal to further fuel development in Vieques.

With Wi-Fi networks already cropping up and the possibility of other wireless networks being deployed, this region will see big improvements in its economic condition. Consider this: The small islands of Vieques, as well as Culebra and the mountainous town of Castaner, have always been limited in the services that they receive because of their remote physical and geographic locations. Put in a wireless network and you could have a way to reduce the so-called "digital divide" in Puerto Rico's most remote communities. With a broadband wireless network, Vieques' residents would have an opportunity to improve their educational system, levels of employment as well as provide increased public service and security.

You can jump in a jeep (many of the roads are still unpaved) and drive through Vieques today, and you will see new buildings, bars and restaurants. You have to look more closely to see the two-foot Wi-Fi antennas hidden in the bushes. No doubt such high-speed wireless networks will continue to attract businesses and tourists, ultimately enhancing the quality of life for the island's 10,000 residents. The wireless invasion going on in Vieques could serve as a perfect testing ground for the marriage of technology and nature. Vieques is on the verge of leapfrogging into the future just as many Asian nations' with poor landline communications systems have. The real test will be whether Puerto Rican government officials can manage this much-needed economic progress while preserving the natural beauty of this relatively undiscovered Caribbean gem.