Wireless nation: using digital technology as the fuel, PCS contenders are giving their network engines the power to transport wireless coast to coast

Wireless nation: using digital technology as the fuel, PCS contenders are giving their network engines the power to transport wireless coast to coast – Supplement to Telephony: PCS Edge

Jason Meyers

Using digital technology as the fuel, PCS contenders are giving their network engines the power to transport wireless coast to coast

To begin thinking along the lines of building a network that is national in scope, consider the U.S. highway system, a web of some 50,000 miles of roadways that connect seamlessly across state boundaries to provide transportation throughout the country. In the scale and complexity of its infrastructure, that interstate network is comparable to what entrants in the personal communication services realm are attempting to create.

But the highway system as it exists today is the result of more than 50 year’s of research, engineering and construction. The PCS industry simply doesn’t have that kind of time.

Newcomers to the wireless competitive arena face a tall order: They must, in the span of about two years, build networks that rival or surpass existing wireless networks and are ready – from day one – to provide advanced services that can compete with what is available today.

“PCS operator’s have to bring into service a network that is highly evolved with lots of different services. It took the cellular industry 10 years to put that in place,” says Roderick Nelson, senior vice president of engineering at AT&T Wireless Services. “It’s all got to be there on a certain date so that we can go into service.”

The PCS network operators leading the competitive pack – AT&T Wireless among them – are going one step further: They are seeking a national presence that expands upon and surpasses the perception of what cellular is today. To achieve that, they are designing and building advanced digital network infrastructures – in some cases leveraging existing frameworks, in others building from the ground up – that can provide coast-to-coast support for wireless services.

Wireless Road Warriors

Although hundreds of potential wireless players exist, only a handful have the resources – financing, territory, infrastructure and marketing capabilities – to create a branded presence on a national scale. But through alliances, roaming agreements and even acquisitions, most of the wireless newcomers, as well as many existing cellular operators, are likely to have some degree of involvement in creating a nationwide wireless network.

Indeed, even the three network operators that most dominate the PCS landscape – Sprint Spectrum, AT&T Wireless and PCS PrimeCo – plan to augment their existence through a variety of means. The starting point for all of them is to leverage existing networks, whatever their form may be.

Sprint Spectrum was the most successful bidder in the Federal Communications Commission’s broadband PCS auctions last year, spending more than $2 billion for 29 metropolitan trading area (MTA) licenses. The venture also owns a portion of American Personal Communications, which has already rolled out Sprint-branded PCS service in the coveted Washinton, D.C./Baltimore region.

Sprint Speetrum’s strategy will begin by building upon Sprint’s interexchange network and the cable TV networks of primary partners Tele-Communieations Inc., Comcast Corp. and Cox Communications.

“There are a lot of things that make Sprint particularly unique,” says Keith Paglusch, vice president of network engineering at Sprint Spectrum.

“We have four great partners that have various assets within their own structures that we’ll be able to use, and we will utilize all of our partners’ networks where it makes sense.”

The Sprint long-distance network will be exploited primarily for its SS7 capabilities and to backhaul wireless traffic from cell sites to switches, Paglusch says. As part of the venture’s PCS-over-cable strategy, the three CATV partners’ hybrid fiber/coax networks will be affixed with transceiver/receiver equipment known as remote antenna drivers and headend-based switching units called remote antenna signaling processors to provide wireless capabilities. The CATV networks may also provide potential backhaul opportunities, Paglusch says.

Sprint Spectrum’s national strategy will be rounded out by various other methods, he adds.

“While right now we have some 186 million pops, we’ll fill in gaps through participation in future auctions, resale arrangements or the buyout of some of the areas we don’t have,” Paglusch says.

The basis of AT&T Wireless’ strategy lies in its ownership of the cellular empire formerly ruled by McCaw Cellular Communications. AT&T Wireless also merged last fall with Lin Broadcasting, which holds cellular licenses in New York, Los Angeles, Dallas and Houston.

In addition, AT&T Wireless acquired licenses for 21 MTAs – at a cost of $1.68 billion – in the A and B block auctions, putting its combined coverage at nearly 200 million pops.

The PCS portion of the company’s approach will be an expansion of a distal cellular network already approaching national proportions, AT&T’s Nelson says.

“Right now our customers have a form of national service. We have automatic roaming agreements and networking between all of our cities and other cellular providers in the U.S.,” he says.

PCS PrimeCo will pursue a similar line, leveraging the existing networks of partner’s Bell Atlantic, Nynex, AirTouch Communications and US West.

“The reason for forming the partnership was to create a national footprint that would be the sum total of the cellular and PCS properties,” says James Petit, chief technology officer at PCS PrimeCo.

“That by itself is the reason for PrimeCo’s existence.”

Beyond the exciting cellular properties of its partners, PrimeCo has a substantial PCS footprint, having spent $1.1 billion to acquire 11 MTA licenses. To address vacant areas in its coverage scheme, PrimeCo will likely forge alliances with other providers, Petit says.

Technology on the PCS Turnpike

Most industry experts agree that all of the three primary digital technologies PCS providers are planning to deploy – code division multiple access (CDMA), time division multiple access (TDMA) and PCS 1900, the North American adaptation of Europe’s GSM technology – have the capabilities to support PCS on a national scale. For PCS providers, some of the key considerations driving technology selections include reputation and availability.

“You have the battle of the new unproven against some of the not-quite-as-new technologies that are out there,” says Dan Merriman, a director at Giga Information Group, a Boston-based consultancy. “That really is more the battle, rather than which is more suitable for a nationwide infrastructure.”

Indeed, both GSM and TDMA have had their debuts: The former boasts solid overseas experience and the latter has been deployed in the U.S. at cellular frequencies, albeit to mixed reviews. CDMA, meanwhile, does suffer from the stigma of being unproven and as yet unavailable.

“A lot of us are starting to wonder about CDMA and when it’s going to be ready,” says Ira Brodsky, president of Datacomm Research, Wilmette, Ill.

CDMA stands on such shaky ground that it could even put one of its primary carrier supporters, Sprint Spectrum, in a precarious competitive situation, Brodsky says.

“You have to consider that when PCS starts to come on-line, there’s going to be a window of opportunity,” he says. “If some of the other PCS players really start to take market share and create some new categories of users and new segments within the market, it’s going to be very important to be there. One has to wonder if Sprint is going to be ready on time.”

Despite CDMA’s naysayers and plaguing uncertainties, Sprint Spectrum remains publicly committed to its technology deployment plans and defends the technology’s future prominence in the PCS world.

“If you look at the CDMA footprint map today, it is very clear that CDMA is the widespread spectrum that will be used out there,” says Paglusch. “Given our strategy to do resale or roaming agreements or acquisitions, we’re very confident that we’ll have the ability to provide seamless interconnection for all of our customers with CDMA.”

That depends, of course, on CDMA vendors bringing their solutions to market in time. But Sprint Spectrum’s confidence is echoed by CDMA infrastructure providers.

“The market for CDMA is going to be there – it will be maturing more as the year goes on,” says Matthew Desch, group vice president and general manager of cellular systems for Northern Telecom’s wireless networks division. Nortel is sure enough about CDMA’s viability to have expanded its wireless infrastructure platforms beyond PCS 1900 to include CDMA, even if it means running somewhat behind rival Lucent Technologies (formerly AT&T’s systems and technology company).

Nortel is confident that its involvement with CDMA developer Qualcomm and its own experience in developing wireless platforms will help make up for the time lag in delivering hardware, and that the result of the wait will help its reputation in the long run.

“We decided some time ago that credibility was going to be king,” Desch says.

When pondering the choices available on the digital technology menu, PCS providers must also consider their existing investments.

“The primary objective from carriers is the ability to provide a nationwide network of continuous service with ease of use for the end user,” says Scott Erickson, vice president of marketing and sales operations, wireless infrastructure at Lucent Technologies. “That’s why you see some of the major carriers looking to supplement their existing cellular networks and interoperate their customer bases between those networks.”

Indeed, PrimeCo chose CDMA because of its partners’ plans to use the technology to upgrade their existing analog systems to digital, says Petit. AT&T Wireless is pursuing a similar strategy to augment its cellular holdings but remains true to the digital air interface that has served it in its cellular efforts, where it is in the process of upgrading properties to second generation TDMA.

“The reason you’re seeing a number of contracts being awarded for North American standards – regardless of whether it’s for CDMA or TDMA – is that it allows carriers to have full interoperability between the PCS network and the cellular network that exists today,” says Erickson.

Some PCS 1900 backers, however, take issue with the positioning of PCS 1900 as a foreign technology.

“I didn’t know physics had a country.,” says Bo Piekarski, vice president of personal communication services at the radio systems division of Ericsson.

GSM does indeed lie outside the immediate plans of the PCS big three, but it plays a key part in the strategies of many network operators of substantial presence, including Pacific Bell Mobile Services, American Portable Telecom, BellSouth, APC and Western Wireless.

One of the primary advantages some vendors associate with GSM is that its specifications define a complete wireless system, not simply the air interface portion of a network.

“TDMA and CDMA are air interfaces being affixed to the IS-41 network standard,” says Colin Bryce, director of BSS product marketing at Nokia Telecommunications. “GSM is backed by complete system specifications.”

Beyond questions of viability, PCS network operators must also consider the implications of roaming and exchanging information between networks built with the equipment of multiple vendors.

“If multiple vendors are being deployed, the biggest issue is feature and function interoperability. Is there a common set of features and functions that will work regardless of where a cellular user travels?” says Jack Finlayson, corporate vice president and general manager of Motorola’s Pan-American wireless infrastructure division.

For equipment vendors, the technology schism in the U.S. allows them to diversify and offer lines of equipment that can address multiple digital technology infrastructures, creating potentially significant revenue opportunities.

“These manufacturers do not want compatibility between the systems because it gives them an opportunity to make more money – they don’t want inter-operability,” says Spencer Stern, a consultant at OmniTech Consulting Group, Chicago.

But with all the rhetoric and rivalry between technology camps, PCS carriers are still primarily concerned with getting their offerings to market as quickly as possible so that they can launch service and begin to make good on their investments.

“The question is, when you want to build something out rapidly, which the operators obviously do, can all the vendors supply the equipment fast enough to do it?” says Motorola’s Finlayson.

Construction Delays

Regardless of their digital technology choice, all incoming PCS providers face a potential roadblock: Before they pursue their national buildout plans, they must first move an existing national network out of the way.

“The biggest issue now is whether the operators can clear the microwave in all the locations,” says Motorola’s Finlayson.

In the shadow of technology debate and multimillion-dollar contract awards, the issue of microwave relocation – the process of moving incumbentusers out of the 2 GHz spectrum to make way for PCS – is often overlooked in the industry. But PCS carriers that have perused schematic diagrams depicting the microwave hops used by the likes of railroads, utilities and law enforcement know how looming the task is. “These networks are crucial to the companies that have them,” says Dennis Guill, director of radio products marketing and business development at Alcatel Network Systems, one of a handful of vendors that markets microwave equipment and services to carriers dealing with the relocation process. “This is one of those cases of a movable object being met by an irresistible force.”

The relocation layer of the PCS panoply has indeed prompted some discord, namely allegations by PCS providers that some incumbents are abusing FCC relocation regulations as a profiteering opportunity. Because they are not the primary business of their users, some microwave networks have not been kept technologically up to date.

“They really want to go digital – it’s a matter of cost and efficiency for such big networks,” says Guill.

For the national network providers, the daunting task of relocation is being broken down and dealt with piece by piece.

“We are doing microwave relocation at a national level, but we have split that into small sectors,” says Paglusch.

AT&T Wireless is taking a similar approach, moving incumbents as necessary to comply with their buildout schedules.

“We’re not relocating every hop in our MTAs initially. We’re coming in with what we call the scalpel process, figuring out exactly the minimum number of hops that have to be relocated and dealing with those,” says Nelson. “That’s a major task, but it seems to be coming along. We’re to the point where it doesn’t look like that will be the critical path factor.”

Despite some of the clashes with incumbents, cooperation among PCS contenders themselves – given that the hops of many microwave networks cross MTA boundaries and must be dealt with jointly in some cases – appears to be smooth.

“There are a lot of things that we don’t agree with our competitors on in terms of how to go to market and what kind of network to have, but the one thing that we not only agree on but are working very closely with many of them on is the relocation of microwave,” says Paglusch.

Marketing Modifications

Once PCS contenders have made their national presence known, they must address the issue of whether to market their services nationally or regionally. Which road they will take is still open to consideration.

The marketing efforts of PCS providers are likely to be regionalized at first, says Phillip Schuman, a consultant at OmniTech. National marketing couldn’t properly address the diversity of the different areas and customer types PCS carriers will target, he says.

Whatever their marketing strategies, PCS providers such as Sprint Spectrum and AT&T Wireless – as well as those operating under recognizable Bell company banners – are sure to leverage the brand power of their names.

“The Sprint brand is a valuable asset that Sprint Corp. brings to the partnership,” says Paglusch of Sprint Spectrum, whose APC affiliate has already popularized the Sprint Spectrum brand in its East Coast market.

The recently relaxed regulatory scenario in the U.S. begs one final marketing question of PCS providers: Once they are successful in creating networks that extend their presence across the country, will they limit their targets to wireless users or attempt to position their services as viable alternatives to wireline?

“It’s going to be impossible for PCS to simply try and be another cellular player,” says Brodsky. “With all the money these guys have bet on this, they’re clearly expecting that ultimately this is going to be a replacement for the landline phone.”

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