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This paper demonstrates the application of a high-order finite-difference time-domain (FDTD) technique to indoor microwave ultrawideband channel modeling with a two-fold purpose. First, the advantages of both serial and parallel versions of the technique compared to the conventional FDTD are pointed out. It is also shown that the results of this full-wave analysis can be translated from the electromagnetic field level to the system level, to produce simplified, physics-based, site-specific channel models. In particular, the parameters of well-established measurement-based models are determined for a specific indoor site, by means of our electromagnetic simulation. Moreover, the proposed technique is coupled with the Monte-Carlo method to characterize the capacity of a time-hopping pulse position modulation multiple access system. Hence, a connection between the field analysis of a channel and its system-level description is made, establishing the usefulness of this work for performance projections, optimization and compatibility studies of ultrawideband communication schemes and network architectures.