Despite the growing interest for LMDS systems there have been only a few commercial implementations until now especially outside of the U.S.A. The use of hierarchical structure through two-layer networking has been even rarer. In many cases LMDS systems have strong advantages against their competitors to cover the last mile. In this article, we review and analyze the standards currently available and describe the European two-layer trial system developed in 1996-2000. We show why further development towards IP based LMDS is useful in the future. Most of our recommendations are based on results derived from the European Union supported research project CABSINET. It had the aim of demonstrating the viability of a 40 GHz cellular digital television system with a return channel to offer interactive services. Two systems were tested: a line of sight link using QPSK, and a non-line of sight with COFDM modulation scheme. In the RF-subsystems, the greatest difficulty of any viable LMDS system is to obtain a moderately low price for the user receiver, while fulfilling the hard OFDM requirements in terms of phase noise, stability and spectrum restrictions. Several options have been studied in order to design the subsystems with the smallest cost. This paper will present the architectures of the transmitters, nomadic terminals, and the design of the IF/RF subsystems for both types of modulations. The discussion is focused on system engineering and selections required in order to build a full two-layer LMDS system.This work has been supported in part by European Commission through the ACTS programme (CABSINET project). PM is in part supported by the Academy of Finland (grant 50624). Authors wish to thank the CABSINET research consortium for enjoyable collaboration and useful suggestions
