The previous chapters pointed to the tremendous strides recently made
on wired networks. Copper and fiber networks are becoming more ubiquitous,
easier to use, less costly, and, most of all, faster. Furthermore, the transmission
capacity of wired networks is considered infinite because carriers can manufacture
bandwidth as demand increases.
Cables and wires are not without their problems. Digging trenches or climbing poles for installation
can involve difficulties, including problems of construction permits and easements,
aesthetics of aerial cables, and backhoes that can inadvertently dig up cablesall
of this can add up to high installation costs. Furthermore, the cable may
be installed in the wrong place, such as an area with a disappointing market
for services. In addition, air doesn't rust or fall down in bad weather, as
cable and wiring can. To some observersincluding the operators themselvesthe
fixed networks of wired systems look like vulnerable high-capital assets in
a world of fast-changing technologies.
Most importantly perhaps is the need for facilities-based bypass by
new market entrants who wish to offer competitive voice or Internet service
but who don't want to use existing telephone or cable infrastructure. Wireless
is the quickest way to start a company, particularly when the distribution
of initial customers is sparse.
Each nation's airwaves historically have been a tightly regulated commodity
for a variety of reasons. Spectrum allocation is governed not only by commercial
interest but also by public interest (public safety, scientific research),
technical characteristics, and, of course, a heavy dose of industry input.
Spectrum often is underutilized because, unlike today's digital modulation
schemes, older modulation techniques used bandwidth inefficiently. In the
United States, the FCC granted spectrum licenses for free until 1993, so there
was little incentive to develop new modulation technology. Moreover, a good
portion of the available spectrum is reserved for either high-priority uses
by local agencies such as fire and police departments, or national uses such
as Federal Aviation Administration air traffic control, deep satellite telemetry,
and military communications. Broadcast TV and radio also consume choice swaths
of spectrum. Finally, very high-frequency spectrum (above 20 GHz) was deemed
too difficult for commercial use.
Enter technology. With the advent of digital technologies, frequencies
above 20 GHz became commercially viable. Secondly, frequencies lower than
20 GHz can support more users at higher speeds, primarily because of digital
modulation and compression techniques. Added to these technological advances,
policy changes that relocate incumbent license users to less-valued spectrum
force both the new bandwidth services and the present license holders to use
spectrum more wisely. The recent auctioning of spectrum by the FCC puts a
price on bandwidth and thereby creates incentive for efficient use. All these
forces conspire to make wireless the technology of choice for new entrants
to broadband access. These new entrants include big service providers who
want to enter someone else's market.
In the last few years, the U.S. government and world spectrum authorities
have authorized many new wireless services. Among these are direct broadcast
satellite (DBS), Personal Communications Services (PCS, second-generation
digital cellular telephony), Local Multipoint Distribution Service (LMDS),
Multichannel Multipoint Distribution Service (MMDS), digital TV spectrum,
Low Earth Orbit (LEO), 24 GHz licenses (Teligent), 38 GHz licenses (Winstar,
Advanced Radio), Global System for Mobile Communication (GSM) telephony, Wireless
Communications Service (WCS), and third-generation cellular telephony (3G).
The sum of these services indicates that over the last few years, the FCC has auctioned, liberalized the use of, or otherwise licensed
more than 3 GHz of spectrum for nongovernmental, nondefense, consumer and
business services. This compares favorably with the 1 GHz capacity of coaxial
cable or the 1 MHz capacity of a twisted-pair copper loop. Furthermore, spectrum
holders now enjoy fewer restrictions on what services they can provide. Because
voice service requires so little bandwidth, plenty of bandwidth is left over
for video and Internet access services. Finally, there will be a tremendous
overhang of analog TV spectrum in the low-frequency ranges of 54
MHz up to 700 MHz when TV broadcasters go digital and the government reclaims
the analog TV spectrum. This is prime spectrum property.
Finally, the key marketing advantage of wireless is that consumers are
willing to pay more for a lower-quality service, if it is wireless. Satellite
television services are higher priced than cable and do not have local content
programming. Yet, there are more than 9 million subscribers in the United
States. Likewise, cellular telephones have poor voice quality, high prices,
and low connectivity. Yet, in the fourth quarter of 1998, more than 33 million
GSM, cdmaOne, and TDMA handsets were sold worldwide. By the end of 1999, there
will be more than 300 million digital telephony users (and this is an addition
to analog handsets), far exceeding the number of Internet subscribers. Mobile
access also is not just for telecommuters. Even soccer moms value their pagers
and cell phones as means to keep in touch with kids and provide peace of mind
The question of wireless networks is whether or not they work at a reasonablenot
necessarily lowercost. Wireless networks use even higher frequencies
than a wired infrastructure, so doubts about its robustness and cost-effectiveness
for high-speed data service continue.
However, the convenience of wireless, its proven appeal to consumers,
the current plethora of spectrum, the promise of more spectrum, and technical
innovations that permit the more aggressive use of spectrum all conspire to
position wireless as a key access option.
This chapter discusses the various options for wireless access from the
carrier to the home. These technologies include DBS, MMDS, LEO, LMDS, and
3G. Other similar technologies, such as 38 GHz licenses (Winstar
[Nasdaq: WCII], Advanced
Radio Telecommunications [Nasdaq: ARTT]) and a 24
GHz service called Teligent
(Nasdaq: TGNT), are viewed as extensions of these and will not be covered.
Other wireless technologies are used within the home, such as IEEE 802.11,
Bluetooth, and HomeRF. These will be discussed in the following chapter