Need For Speed, WSJ>
September 20, 1999
The Fast Track
Broadband offers the possibility of overcoming
some of the drawbacks of going wireless
By LESLIE CAULEY
By now, most people have grown accustomed to ever-quicker Internet
connections and more-elaborate graphics. But the question is: Does going
wireless mean a step back to slower transmission speeds and low-resolution
images?
Not if wireless broadband lives up to its promise.
Just like wired broadband, its wireless counterpart offers a single system that
can handle phone calls, television and the Internet -- with good quality and at
high speeds. Proponents promise it will take wireless to a whole new level,
ushering in an array of high-tech gadgets that will give consumers on the run
fast access to voice, data and video.
Like its land-line cousin, the wireless version of broadband zaps information
with lightning-fast precision to users, allowing a customer to, say, access a
stock quote, call a friend or watch a Hollywood hit movie. Unlike traditional
broadband, which relies on upgraded cable TV or local phone lines, wireless
broadband uses high-frequency signals to bounce information over the
airwaves to and from customers.
Not Through With Wires
The name "wireless broadband" is something of a misnomer, since wires still
come into play in most systems. For example, in fixed-wireless systems, a
version of wireless broadband, a digital signal sent by, say, a PC or phone
travels over existing office wiring to a rooftop antenna, which in turn sends it
through the air to a base station several miles away. The base station
collects the signal, then hands it over to the local phone network,
long-distance carrier, cellular provider or another network. Depending on the
final destination, the digital signal could make a few more pit stops along the
way before reaching its final termination point -- be it a home, business or
some other location. All this happens in the blink of an eye.
The Need for Speed
Estimated maximum data-transmission speeds for the three major wireless-network
technologies in the U.S. (in bits per second)
Now
2000
2001
2002
2003
CDMA
14,400
144,000
N.C.
N.C.
384,000*
GSM
9,600
100,000 -170,000
N.C.
384,000*
N.C.
TDMA
14,400
115,000
N.C.
384,000*
N.C
Notes: N.C. = No change from the prior year
*Up to two million bits per second for stationary users
Source: Yankee Group
Other wireless broadband systems have the potential to offer a lot more
mobility for users. One technology coming down the pike is "3G," short for
third-generation cellular, which promises to turn cell phones into Internet
terminals and video monitors as well -- and perform all its functions at
extremely high speeds.
"That's where all the sex and sizzle is," says technology expert Joe Kraemer,
senior vice president of PHB Hagler Bailly, a consulting firm in Washington,
D.C.
Mr. Kraemer says early 3G terminals are expected to resemble the
brick-size cell phones of years past. But if history is any indicator, he says,
they'll soon get small and cheap. He thinks 3G technology, which packs so
much power and so many functions into a single device, could help spur even
greater usage of cellular phones.
Given all the developments in the emerging wireless-broadband sector,
analysts think the market has the potential to expand rapidly. According to
some estimates, the number of wireless broadband users could jump to more
than three million by 2004. That's a quantum leap from the 200,000 users that
are expected by the end of this year.
"The technology still has to prove itself to customers," says Mark Zohar, an
analyst with Forrester Research Inc., Cambridge, Mass. "But it has a lot of
promise."
The tantalizing potential of wireless broadband hasn't been lost on big
telecom companies, which have been snapping up small carriers specializing
in the technology. Telecom players are drawn, in part, by the prospect of
using wireless broadband to sidestep local phone companies -- and their fat
fees -- and go directly to consumers in their homes or offices.
Building Beachheads
In recent months, a number of companies, including MCI WorldCom Inc.,
Sprint Corp. and the Liberty Media unit of AT&T Corp. have been shelling
out billions to establish beachheads in fixed wireless. Liberty Media, headed
by cable magnate John Malone, recently agreed to acquire a 41% stake in
Teligent Inc., a fixed-wireless highflier, in an all-stock deal valued at $2.8
billion, plus the assumption of $187 million in debt. The deal is expected to be
completed in early 2000.
These companies see fixed wireless as a cheap alternative to traditional
terrestrial networks, which can be monumentally expensive and
time-consuming to build. The Bells' copper phone networks, for example,
cost billions and took a century to construct.
That's not to say, however, that wireless broadband is a cure-all. Far from it.
The technology, while promising, continues to have nagging "line-of-sight"
issues: Wireless signals in these systems must have a clear path to travel as
they bounce from rooftop to rooftop. Trees, buildings and even inclement
weather, such as snow and pelting rain, can cause static, dropped calls and
hazy connections. Purveyors of the technology say things are improving, as
they get smarter about how to lay out networks and avoid problems.
Wireless broadband, flexible in its application, is also a natural for the video
business because it allows rivals a way to muscle into local cable markets.
By transmitting video over the airwaves, rivals can avoid the cost and hassle
of having to construct traditional networks. Like their satellite-TV cousins,
wireless cable companies transmit digital signals, but they don't rely on
satellites deep in space to beam in signals. Instead they use the base stations
and rooftop antennas of fixed-wireless technology.
That said, only a few companies are using wireless cable to compete with
established cable-TV operators. A lot of companies are using the spectrum
for other applications. But those who have treaded into wireless cable report
good results.
One is BellSouth Corp., the Atlanta-based phone company. It currently
offers wireless cable services in about a dozen markets across the South,
including New Orleans, Jacksonville, Fla., and Atlanta. BellSouth's offering is
currently limited to one-way video, though there are plans later to add
interactive services, including data transmissions.
Robert Frame, president of BellSouth Entertainment, which is overseeing
that effort, says the Bell's cable service is getting a good initial response
from customers.
BellSouth's wireless cable package currently includes about 160 digital
channels of traditional cable fare, including movie channels, pay-per-view
and other standards, such as Discovery, CNN and ESPN. It also has an
electronic program guide and a security feature for parents who want to
designate certain channels, or programs, off-limits to children.
Mr. Frame says BellSouth's wireless-cable alternative generally costs a few
dollars more a month than regular cable TV. Given all the added value, he
says, BellSouth considers the price to be competitive.
Though the technology works well, Mr. Frame allows that it is far from
perfect. Besides the usual culprits -- trees and buildings -- he says the
peculiarities of geography can also play havoc with the service. He says
video signals can get blocked, for example, when a home sits in a low-lying
area of a neighborhood. Interference also can be caused by signals bouncing
off nearby structures. Says Mr. Frame: "This is not an easy technology to
master."
-- Ms. Cauley is a staff reporter in The Wall Street Journal's New York
bureau.
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