Wireless Launches Pose Challenge For Wireline
By Fred Dawson, Contributing Editor
November 18, 1998 2:51 PM ET
Wireless advances on several fronts continue to raise the possibility that the technology could pose a serious threat to wireline carriers in the move to broadband.
Wireless is beginning to pose a challenge to wireline on the narrowband side, even before wireless broadband service becomes a major factor in the access equation. "We're rapidly approaching the point where the price per call over wireless will permit wireless to become the primary form of communications in the home and office," says Eric Summer Jr., ventures vice president in the switching and access solutions group at Lucent Technologies Inc. (www.lucent.com).
If wireless can more cost-effectively meet the rigorous performance standards set by fixed wireline telephony in the mass market, logic would suggest that it would be a more cost-effective platform on which to build other services as well -- assuming there's enough bandwidth to work with. Recent developments at both the high-frequency tiers where bandwidth is abundant and the lower tiers where it isn't suggest that solutions are at hand.
At the high-frequency end, Lucent has lent important new support to the claims of spectrum license holders that it's possible to overcome atmospheric interference and other impediments to achieve efficient propagation of two-way services from a single transmitter in point-to-multipoint networks. Late last month, Lucent announced that it will finance up to $2 billion worth of infrastructure for wireless broadband service provider WinStar Communications Inc.'s network buildouts in the U.S. and abroad over the next five years.
WinStar (www.winstar.com) and Teligent Inc. (www.teligentinc.com) now are racing to get point-to-multi-point broadband wireless networks into commercial operation. Teligent, with licenses nationwide at 24 gigahertz, announced late last month that it has launched two-way wireless broadband services in 12 U.S. markets, with three more to follow by year's end.
Teligent, which uses Northern Telecom Ltd. (www.nortel.com) as its primary supplier and systems integrator, is offering business customers flat-rate pricing at a 30 percent discount to whatever they are paying for any given package of wireline services.
"We take several representative bills for our customers' local phone service, domestic long-distance and Internet access; exclude taxes, surcharges and fees; calculate the average; and subtract 30 percent," says Richard Hamma, senior vice president for sales and marketing at Teligent.
Such pricing is a real-world reflection, even in start-up mode for an all-new technology, of the advantages wireless offers over wireline access, Teligent officials and other backers of the technology say. But it's clear they carry a huge burden of proof when it comes to demonstrating they can meet reliability requirements of the commercial services market.
While there are many vendors offering radio equipment designed to operate at these high frequencies, so far the only equipment being deployed commercially is from Nortel Networks, although contracts from Canadian wireless broadband providers soon will result in use of equipment from Newbridge Networks Corp. (www.newbridge.com). The Nortel Networks gear has passed atmospheric performance tests over WinStar and Teligent facilities with flying colors, officials at all three companies say.
But Doug Smith, chief operations officer for broadband wireless access at Nortel Networks, acknowledges other challenges wireless broadband providers must meet if they are to be an effective option for their target audience: small to midsized businesses in office buildings unconnected to fiber-optic networks.
One issue has to do with in-building wiring, which often is unsuited to providing the bandwidth-on-demand flexibility and capacity to each tenant that the Nortel Networks wireless system can deliver.
"We have a solution we're offering as part of the complete package," Smith says. He declines to go into specifics but acknowledges the in-building solution is twisted-pair-based using the modulation techniques Nortel Networks is applying in its 1-Meg Modem, a proprietary, high-speed access-over-copper product.
Another issue is the traffic control point at the interface between the roof-mounted wireless transceiver and the building wireline network, which becomes necessary in a building with many customers accessing the same 100- to 200-megahertz stream that Nortel Networks delivers to the antenna from each radio mounted at the hub transmitter. Multiple radios are required to consume the full amount of bandwidth available to license holders, but most are starting out with just one radio per antenna transmitter sector, with plans to add more radios as necessary.
Smith says Nortel Networks is using something similar to a Digital Subscriber Line Access Multiplexer, which uses Asynchronous Transfer Mode technology, to solve the latter problem.
Auctioned Blocks
Coming right behind Teligent and WinStar is a new generation of wireless broadband companies, thanks to completion of the Local Multipoint Distribution Service (LMDS) licensing process. The U.S. Federal Communications Commission's Wireless Bureau is "down to just a few licenses" yet to be issued out of the 864 that were successfully auctioned in the A (1.15 GHz) and B (150 MHz) blocks, an FCC (www.fcc.gov) source says, adding that there are 114 A-block and eight B-block licenses that weren't bid on; those will be reauctioned next year.
The licensing process has sparked a surge of interest in LMDS from major carriers that sat out the auction but could access the spectrum through business agreements with license holders under the FCC's LMDS rules.
"We have some of the very biggest carriers sucking the life out of us with requests for information these days," says Nortel Networks' Smith. "They want a lot of information, and you can't afford to ignore them."
Many LMDS licensees -- including the biggest auction winner, WNP Communications Inc. -- are start-ups that have no infrastructure or work force in place and have not even begun to work with equipment in the field. But it remains to be seen how readily WNP and others like it will give up the opportunity to be frontline service providers themselves.
WNP had to wait several months longer than anticipated to get its LMDS licenses, but, with 1.15 GHz of spectrum to work with in 39 markets, representing 41 percent of the U.S. population, WNP has a lot going for it, says President Tom Jones. The company was just completing a round of capitalization for its initial buildouts at press time.
"We're pursuing the buildout and hiring people," Jones says. "Everything is on track."
Complementing the flurry of activity at the high end of the useful public wireless networking spectrum are efforts at the cellular and personal communications services (PCS) tiers aimed at adding fixed service capabilities to these much more limited and more utilized slices of bandwidth. These activities, including the widely reported development of third-generation PCS capabilities, are aimed at adding fixed high-speed data as well as voice services within the 25- or 30-MHz frequency blocks available to providers while leaving room for the provision of mobile services, as well.
AT&T Corp. (www.att.com), for example, insists that its approach to using spectrum for these purposes is on track. Its top executives hold wireless up as the option to be used in the two-thirds or more of the country where the carrier won't reach via the cable networks it hopes to access through its acquisition of Tele-Communications Inc. (www. tci.com) or affiliate agreements with other cable companies.
While AT&T officials stress the importance of their development of a high-speed wireless solution, outsiders continue to voice skepticism that the carrier can deliver a wireless counterpart to cable's multiservice capabilities over spectrum meant for cellular and PCS. "Before they can compete, they need a network, and they haven't shown that their wireless system is a viable alternative," says Bear, Stearns & Co. Inc.'s Oren Cohen.
But AT&T's claims are buttressed by advances in compression and antenna technology that show spectrum efficiency gains in the offing that are beyond anything yet dreamed up in the wireless industry's third-generation PCS agendas. A new approach to delivering wireless signals, known as spatial processing, is gaining credibility as a means of vastly increasing the data or voice capacity of a given spectrum block.
Lucent, following a Bell Labs demonstration of a tenfold capacity increase over a standard wireless link, has inaugurated a high-priority product development effort, code-named BLAST, using this technology. "While there is still a great deal of applied research required . . . we are very excited about its potential implications for our future wireless systems," says Jim Brewington, president of Lucent's Wireless Networks Group.
Lucent is not alone in pursuing this technology. The leader in the field, ArrayCom Inc., has been supplying spatial processing products through its IntelliWave wireless local loop system for two years. It has contracts for commercial deployments in China, Japan and the Philippines, as well as a manufacturing and distribution agreement with a major telecommunications equipment supplier in Latin America.
Also entering the spatial processing field is Ericsson Inc. (www.ericsson. com/US), which is supplying a dual-user-per-channel system for a test over the global system for mobile communications wireless network of Mannesman Mobilfunk in Germany.
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