WASHINGTON-While wireless local loop technology is taking off in such countries as South Africa, Great Britain, India and China, the United States continues to lag behind in deploying what could be the most cost-effective, time-sensitive means of providing everyone in this country with dial tone.
Indeed, new Federal Communications Commission Chairman Bill Kennard said in a recent speech, “As the manager of non-government spectrum, we must continue to make spectrum available rapidly for a variety of applications, including as a substitute for wireline loops. From their inception, commercial mobile radio services, including cellular and broadband personal communications services, have been valuable complements to wireline telecommunications services. The use of wireless technology as a substitute for wireline local exchange service could accelerate if CMRS prices continue to decline as CMRS competition increases.”
U.S. wireless carriers are not stepping up to the plate, with few, save for WinStar Communications Inc., vigorously attacking the nascent market today. At least one dominant carrier doesn’t think the wireless industry is ready to enter the U.S. fray, even as a carrier of last resort in rural or underserved areas. “Technology is not conducive to wireless local loops yet,” said Gerald Vanderwel, director of services line planning/fixed wireless services for AT&T Wireless Services Inc. Speaking at last week’s National Telecommunications & Information Administration seminar on WLL, he added, “We are trying to be better than or equal to copper. Wireless has certain voice clarity over wireline, but in a market like Seattle, there are building and aesthetic challenges.”
Vanderwel added that local bottlenecks need to be broken before WLL can take off, and that wireless carriers that are considering providing fixed service “need to differentiate before they make a strong competitive push. We are not looking at strict plain old telephone service.”
Not true, asserted another panelist. “Dial tone is what this meeting is all about,” commented Dr. Arunas Slekys, vice president of Hughes Network Systems Inc.’s wireless network division. “The growth of wireless worldwide has been painfully slow because of monopolies, and no one is interested in investing in a monopoly. However, fixed wireless is a special case.”
According to Slekys, there are some 4 million fixed wireless networks operating worldwide, with revenues of between $5 billion and $6 billion; that number is expected to grow “four or five times” during the next five years. Deployment of WLL is more advantageous than stringing copper or fiber, Slekys added, because:
It is faster to install.
Capital costs are lower in suburban and rural areas.
Operating costs are lower.
There is more flexibility to move or redeploy channels based on need, and the service is distance-insensitive.
Services are equal in quality to wired applications.
As an example of this, the Ionica WLL system in Britain, with Northern Telecom Ltd. as a partner, has 30,000 subscribers so far and has broken even financially in fewer than eight months. David Trinkwon, Nortel’s director of marketing for its North American fixed wireless access division, contended that voice isn’t the service differentiator anymore. “Capacity is the issue, and data will be big for the future,” he said. “Regulators need to take wireless into account [when crafting service rules] and not be predisposed to copper and fiber.”
If cost is an issue, Trinkwon pointed out that in rural areas, wireless service could cost $500 to $3,000 per line compared with $200 to $20,000 per line for copper, depending on the area.
Trinkwon also cited the problem of how to deal with free local calls as one of the factors holding back the domestic growth of WLL. However, that problem can be solved, as it has in Israel and Denmark, where mobile rates are close to those charged by wireline services. “People are willing to pay $50 per month for all you can eat or 10 cents per minute,” he said.
WLL should be viewed as a last-mile or last-10-to-15 mile solution to deploying dial tone. Despite all the talk of voice and data services being provided by new satellite licensees like Iridium L.L.C. and Teledesic Corp., Hughes’ Slekys believes WLL will be a terrestrially based program only, based on the economics. “There will be opportunities like global roaming, but satellites should stick to broadband data services,” he said.
In order to really get WLL up and running, wireless carriers probably will have to forgo the lucrative urban markets and start building out along highways that enter the suburban and rural sectors, said John Chambers, vice president of public policy for Sprint Spectrum L.P. Sprint PCS has applied in several states to become an eligible common carrier as a “defensive mechanism so that we can recoup our universal service costs.”
Local exchange carriers that have wired rural or underserved areas have been eligible for subsidies from the universal service fund, which has been overhauled drastically since passage of the telecom act. Models still are being crafted at the commission on how new subsidies will be calculated and distributed.
Wireless carriers have not been a part of the mix until now, and the FCC is working with wireless carriers to figure out how universal service support will apply to them if they enter the WLL market, said Wireless Telecommunications Bureau associate chief Jeanine Poltronieri. The model should be ready by next summer, and the FCC is considering using competitive bidding as a method for choosing the carrier of last resort.
If he were in charge of jump-starting the growth of WLL in the United States, said David Aylward, president of National Strategies Inc., he would organize the issues into five areas:
Authority issues-Who is in charge, the FCC or the states? And should there be any difference in fees or regulation if you are moving or stationery?
Economic issues-What are the aggregated effects of mandates, fees and taxes on investment? If you add up all the fees that wireless carriers will have to pay in the near future, it could add up to 20 percent or 30 percent of revenues.
Access issues-What about antenna siting, access to premises, rights of way, interconnection agreements?
Consumer issues-Carriers have to address E911 and number portability.
Universal service subsidy issues-Wireless carriers will not be able to compete unless there is “flat equality. Everyone must have access to universal service subsidies to compete.”
