August 14, 1997 - WASHINGTON, DC The Telecommunications
Industry Association's (TIA) TR-45 Standards Committee closed out its IMT 2000 third
generation cellular standards workshop today. The effort represents the North American
region's efforts in a worldwide race to create high speed data capable cellular/PCS
systems by the year 2000. Each region's rush includes its own wideband CDMA standard. In
some cases like North America, several standards have been tabled including the Lucent
Technologies, Motorola, Nortel and Qualcomm backed Wideband cdmaOne, and the Universal
Wireless Communications Consortium's (UWCC) high-speed capable TDMA technology. With other
top cellular players Bell South and Southwestern Bell dedicated to TDMA, UWCC's solution
promises serious attention. The gold rush is driven by the need to create a complete
wireless system that can compete with all facets of wireline service--and provide the
bandwidth necessary for a complete information highway.
High speed data capable third generation systems will
offer a broad bandwidth pipeline in addition to voice and low speed data, providing the
full range of telecommunications services. "There will be a future crossover from
wireline development to wireless infrastructure," said John Marinho, TR-45 chair and
technology director, wireless, Lucent Technologies. "A lot of what will happen in the
future will be driven by the third generation standards," Marinho said.
The third generation cellular standards have three main
sets of criteria: a mobile data rate of 144 Kbits per second, a portable data rate of 384
Kbits per second and an in-building fixed data rate of 2 Mbits per second. With the new
high speed two-way connectivity, wireless carriers can add a new weapon to their arsenal,
positioning them to further compete with wireline carriers.
"The third generation systems really focus on high
speed data beyond 64 Kbit multimedia and Internet access," said Faye Vorick, manager
of strategy and business operations, Motorola's Wireless Solutions. "This will bring
about a new era of news, media and communications. Envision a paperless society where you
have a wireless news reader. Every morning at three AM,
your wireless reader downloads a business users paper. Then the business user wakes up and
takes his reader with him on the way to work. [On the way to work] the user can continue
to download video clips and a short news piece of something that happened in the world the
previous day."
Even though third generation systems are still a minimum
of three or four years away from possible deployment, cellular and PCS carriers' interests
have already been piqued. "Our engineering department is very aware of the third
generation movement," said Melissa Nichols, spokeswoman, Comcast Cellular. "We
are monitoring it. It's just too early to tell [whether its viable]."
Topics
Bandwidth
Shortage Drives Demand for Third Generation Standards
The Internet is growing at a phenomenal rate. There are 30
million users in the United States alone, says FIND/SVP. Currently at an 11 percent
saturation point in the United States, the initial growth burst has slowed down to a
healthy 5 percent every six months, according to Georgia Institute of Technology's
Graphic, Visualization and Usability Center (GVU).
Graphic laden text based information has become a
multimedia hit with the U.S. consumer. Demand is expected to continue to increase across
the globe. "It's certainly going to go up," said Inder Gopal, senior vice
president of development, Prodigy Internet. "Optimistic predictions put the Internet
at a billion users by 2001."
Yet there is a big barrier for the multimedia World Wide
Web (WWW) and other multimedia communications like real-time video: A shortage of
bandwidth available in today's Global Information Infrastructure (GII). GVU's seventh WWW
survey revealed that 60.4 percent of users access the Internet from residential locations,
where bandwidth is often limited to 28.8 Kbits per second. Without bandwidth, Internet
users have been unable to use real time audio and video capabilities, stunting the
widespread use of these new killer applications that are sure to drive a new Internet
boom.
"The real issue is what residents have locally,"
said Chris McDonald, systems administrator, Georgetown University's Communications,
Culture and Technology Media Lab. "Most business users have access to a T1. If
carriers had dark fiber to the curb, then bandwidth wouldn't be an issue."
The shortage has proved a window of opportunity for
wireless carriers and third generation cellular standards to enter into the bandwidth
provision market. "The potential for high speed wireless is huge," David Lytel,
president, Sherpa Consulting Group and former National Information Infrastructure advisor,
Clinton Administration. "The cable companies aren't seeing the uptake they'd expected
in part because their customer base is consumers and not the more lucrative business
market. And xDSL will be brought to you by the same people who made ISDN what it is
today--a small improvement for a large incremental price difference," said Lytel.
Topics
Wireless
Goes Beyond the Curb
At this point, wireline solutions to the bandwidth
shortage seem far from realization. Enter dedicated third generation wireless cellular
services. Using a third generation service provider, multimedia users will be guaranteed
dedicated bandwidth anywhere within the service provider's coverage area. Once a network
is upgraded, the need for a personal wire to the curb will be over.
Instead an antenna enabled third generation terminal will provide connectivity to the G2.
"Third generation technology sounds like it solves
the last mile problem," said Prodigy's Gopal. "There is definitely a need for
bandwidth solutions. This is a consumer solution that at 144 Kbits significantly improves
the real time capabilities for audio and voice. At 2 Mbits the end-user gets high-end
video capabilities," said Gopal.
"Third generation can offer everything a local
exchange operator can, but the big benefit is it's mobile," said Motorola's Vorick.
"Third generation extends current cellular operators capabilities like voice, caller,
ID and low speed data to high bandwidth Internet connectivity. It goes with you everywhere
you go after you leave home. If you're at the grocery market, on the bus, anywhere in your
neighborhood, you get full residential service."
Other hopeful high speed data wireless players are mainly
satellite based and include Teledesic and Hughes DirectPC. Teledesic is the brainchild of
Seattle billionaires Bill Gates and Craig McCaw, recently listed numbers 1 and 76,
respectively, in the Forbes ranking of the richest people in the world. The global
satellite network is scheduled to begin operation by the end of 2002 with 288 satellites
in LEO orbit, providing two-way, broadband communications virtually anywhere in the world.
But Teledesic feels the need for wireless broadband
capable systems is wide enough to let all players prosper. "It's a potentially huge
market that we will not begin to satisfy," John Wolf, executive vice president,
Teledesic, recently told reporters. "There could be five Teledesics and they would
not begin to meet the demand. We're amazed there haven't been more entrants," said
Wolf.
Topics
Third
Generation Services Face Pricing Challenges
An immediate problem facing any would-be third generation
cellular carrier is pricing. "This technology has great numbers, but bandwidth is
half the story," said David Clark, senior research scientist, MIT Laboratory for
Computer Science, and former chief Internet protocol architect. "If customers have to
pay for the service by the minute, the wireless carriers haven't got it. Cable is flat
rate and is on all the time. If it's available on demand with the right pricing, third
generation cellular technology will be a great service."
Competition from other markets will be intense and will
range from a variety of different telecommunications sectors. The differentiating factor
will be price points and service. "Assuming that telecommunications manufacturers
have enough technical savvy to deliver wideband digital wireless technologies in the next
few years, the main question becomes: how does the price/performance of these wideband
technologies stack up against alternative communications technologies such as VSATs, ADSL,
cable modems, and broadband LEO satellite systems," said Stephen A. Virostek, senior
consultant, The Strategis Group.
Wireline competitors like Bell Atlantic are not
intimidated by impending third generation systems. "We're facing competition on all
fronts, wireline and potentially wireless, and frankly we welcome it," said Paul T.
Miller, spokesman, Bell Atlantic. "Our region, the northeast corridor, is very
lucrative. It's no surprise at all. We assumed wireless competition was coming."
Third generation carriers may need to employ aggressive
pricing strategies to carve out the high speed data market. If carriers are unable to
generate a critical mass of subscribers, third generation networks might not successfully
compete. "The question is demand," said Bo Piekarski, vice president of business
development and strategic marketing, Ericsson. "Price elasticity will determine
demand. Loss leadership will be needed to create the demand and let the markets create the
high bandwidth applications."
"Pricing structure has got to be competitive with
other services," said Prodigy's Gopal. "It's like a LAN where your always
connected. I think pricing on this would need to be a flat rate instead of traditional
cellular's connectivity by the minute."
Topics
Equipment
Manufacturers Have to Make Third Generation Timely
Equipment manufacturers realize the constraints roll-out
timing will have in the third generation systems competitive efforts. The rush to finish
the standards by 2000 reflect the need for third generation systems to be providing
services first. "We are trying to meet the [third generation] requirements exactly to
ensure growth so third generation can compete with wireline," Ericsson's Piekarski
said. "When Bill Gates is 18 months away from rolling-out [refers to Teledesic's roll
out in 2002], you are in never, never land."
Across the globe, each region is moving aggressively to
make third generation happen. Japan is looking to have third generation systems up and
running by 2000. It is expected that the European market will have wideband CDMA systems
up and running by 2005. Predictions about when the United States will implement third
generation standards range between 2000 and 2010. The uncertainty is based in the late
roll-out of PCS in the United States and the country's strong wireline infrastructure. But
before anything happens several hurdles have to be crossed and in a timely fashion.
As a result, manufaturers are creating several standards
to meet the demand in each sector of the world. To date, several CDMA standards have been
created. For the North America region, a backward compatible CDMA standard, called
Wideband cdmaOne has been created. As reported previously in WirelessNOW, the European
version of Wideband CDMA, called Universal Mobile Telecommunications Service (UMTS), is
spearheaded by Ericsson and Nokia. UMTS has a FRAMES approach and uses a different
numerology and techniques than Wideband cdmaOne. Japan is moving forward withtwo groups,
NTT DoComo and Wideband cdmaOne. On July 24, the two groups agreed to try to unify their
technologies. In addition, Korea may create its own third generation CDMA standard.
UWCC'S new TDMA standard seeks to meet third generation
high speed requirements for TDMA and AMPS players
without wideband spectrum requirements. In addition to the U.S. market, Latin America has
a strong TDMA contingency that would be interested in the new standard.
Topics
Backward
Compatibility and Spectrum Allocation are U.S. Standard Issues
Japan and Europe have already allocated spectrum for brand
new third generation systems. The need for backward
compatibility is not an issue in those regions, but backward compatibility will be a major
issue with first generation and second generation U.S. carriers. U.S. cellular companies
have already invested billions of dollars in infrastructure.
"Wideband cdmaOne will be backward compatible with
IS-95 [CDMA] and ANSI 41 [AMPS] systems," said Motorola's Vorick. "Our goal is
to have carriers focus their efforts on developing the applications, not rolling out new
networks."
In the United States, whether second generation and first
generation terminals are upgradeable will also be a factor. Carriers will not want to
upgrade millions of terminals, not to mention their infrastructure. "I would expect
that existing cellular and PCS systems will continue to support voice and low rate data
services," said Mark Epstein, vice president, development,
Qualcomm.
Full 100 percent upgradable compatibility between new
third and current first and second generation systems is not a
possibility. How much infrastructure carriers will have to add is yet to be determined.
"It's too early in the process," said Eric Schimmel, vice president of wireless
standards and technology, TIA.
GSM and TDMA carriers like Omnipoint and AT&T Wireless
would have to deploy a brand new network if they use the
Wideband cdmaOne standard. "Anybody that's already chosen CDMA already has a leg up
in that perspective," said Tom Murphy, director of media relations, Sprint PCS.
"We're in a position to be involved in the development because we're the
largest CDMA carrier in the United States. The bigger question is when its appropriate to
roll out it out in the future. We're still building our current markets."
AT&T Wireless is looking to use UWCC's third
generation TDMA technology that doesn't require 5 MHz of bandwidth to employ high speed
data services. Possible TDMA approaches could enable AT&T to migrate and evolve its
current PCS system over to wideband in 240 KHz segments. "We are trying to identify a
way to upgrade gracefully," said Rod Nelson, vice president of engineering, AT&T
Wireless. "Preferably a technology you can implement with an IS-136 [TDMA]
approach."
"The TDMA standard is evolving to higher and higher
data rates," said Mike Bahrmann, chairman, UWCC. "Currently, we already meet a
lot of the IMT 2000 requirements. TDMA carriers can be sure of an evolutionary, efficient
gradual upgrade," Bahrmann said.
Beyond backward compatibility, it is unsure whether or not
the FCC will allocate spectrum for wideband systems. Even if the FCC does provide third
generation spectrum, the current volatility of the auction process is likely to discourage
carriers from bidding millions of dollars on the spectrum.
New third generation CDMA networks may not demand the
wideband spectrum mandated by the IMT 2000 third generation requirements. "In the
United States, existing cellular and PCS service providers would allocate some of their
current spectrum for provision of 3rd generation services, as needed," said
Qualcomm's Epstein. "Whether additional spectrum will eventually be needed beyond
this isn't clear at this time."
Topics
Rush to
Get the Standards Out
Before infrastructure rolls out, the third generation
standards will have to be developed, at least on a regional basis. The entire process has
been guided by the International Telecommunications Union's (ITU) effort to create IMT
2000 standards.
Under IMT 2000, the ITU will produce standards by the year
2000. The effort coincides with NTT DoComo's stated intent to have their generation
systems up and running by 2001. "The Japanese have a big need for this
standard," said AT&T's Nelson. "Their second generation cellular technology
received such a great response that they're starting to run out of capacity. They may need
third generation just to carry the amount of voice subscribers they'll have."
The third generation standards fracture will cause
regional interoperability between wideband systems, at least in the near term.
"Almost nothing starts out as a universally recognized standard without first going
through the phase of industrial factionalism," said Sherpa Consulting's Lytel.
In North America, complicating matters are the many
developments occurring within TIA's TR-45 subcommittee. Beyond Wideband cdmaOne and USCC's
TDMA standard, several other factions may rise including a possible TR-46 based Wideband
GSM standard, and a third group offering another high speed data protocol, said TIA's
Schimmel. "TIA's standards committees serve as an umbrella for the development of all
technologies, not to recommend a specific standard," said Schimmel.
Despite how quickly the IMT 2000 process is moving, it
will be at least a year before any possible ITU action is made on the matter, said
Schimmel. The ITU is holding a Bell Mobility hosted IMT 2000 workshop on September 10-12.
From there the United States will continue to develop its standards until April/May of
1998, when another ITU workshop will be held. In June of 1998, all international IMT 2000
proposals are due at the ITU and comments on the proposals are due in September of 1998,
said Schimmel. The ITU will make its IMT 2000 recommendations based on those proposals and
comments.
The The Strategis Group's Stephen A. Virostek will be
exploring third generation cellular technology pricing issues and competitive factors in a
WirelessNOW feature slated for September. Geoff Livingston writes for Inside Paging and is
a frequent contributor to WirelessNOW. Copyright 1997 by CommunicationsNOW.
Topics