Subject: [NEXTEL-1] What's Right With Telecom

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Date: Wed, 01 Jan 2003 01:27:51 -0500

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What's
Right With Telecom

Broadband's
secret success and our never-ending love of mobile communication
are the aces up the industry's sleeve

By
Steven M. Cherry

You know
that quote about really advanced technology being indistinguishable
from magic?" a friend recently wrote me. "I'm sitting here
on my front porch, watching the rain, listening to Don Giovanni
on my iPod, and sending this e-mail on my laptop, my cellphone
by my side." It wasn't that long ago that this 57-year-old
Philadelphia clinical psychologist was dialing a rotary telephone
and playing vinyl records on a phonograph player.

Like
my friend, we've all come a long way. Undoubtedly, any picture
gallery of the telecommunications industry must display some
disturbing images, including ones of the dot-com disaster,
the collapse of demand for products and services, misguided
regulations, accounting scandals, layoffs, and bankruptcies
on a massive scale. But there's also the idyllic still-life-with-end-user
painted above, featuring, as it does, what's still right in
telecom.

Broadband
Internet access continues to grow almost everywhere in the
world, with especially rapid expansion in South and East Asia
and Eastern Europe. Wireless local-area networks, most of
them based on the IEEE's 802.11b standard, have popped up
in transportation terminals, offices, coffee shops, and homes—including
my friend's. New cellphone services such as text messaging
and the sending of photos have been a big hit. Indeed, consumers
have shown themselves willing to spend more than ever before
on media and communications hardware and services. The challenge
now is for companies to come up with offerings that will keep
people digging into their pockets.

UNSUNG
HERO

SCOTT
BRADNER, an area director for the Internet Engineering
Task Force (and a senior technical consultant at Harvard University
by day), plays a key role in technologies critical to the
Internet's future, including IPv6, the first new scheme to
expand the Internet address space in 20 years

And they
are. Higher-speed wireless services are in the offing: both
faster 802.11 standards and the much-maligned third-generation
(3G) cellular systems, which, despite uninspiring debuts in
cellphone-friendly Japan, are poised for a much better reception
in coming months there and in places like China and the United
States. And coming not much later will be true broadband wireless
networks—pure Internet-protocol (IP) voice-capable 2-Mb/s-and-higher
data networks for which some analysts are even trotting out
the term 4G. Connected to an Internet whose last-mile tentacles
into the home are increasingly broadband—DSL, cable,
and, eventually, fiber optics—the new wireless systems
will give people new mobility and freedom not felt since the
advent of the automobile in the early 20th century.

Going
digital has already rewritten the business playbooks of telecommunications
and the entertainment industry. Now, with combination cellphone/personal
digital assistants (PDAs) and laptops and tablets equipped
to commune with whichever connection is handiest, be it broadband
data lines here, an 802.11 node there, a faster-than-narrowband
3G system everywhere, ubiquitous Internet-based communications
networks will remap lives and lifestyles in the same way that
freeways and autobahns did 50 years ago.

Broadband:
alive and well, thank you

When added
together, these elements of future networks will let us do
remarkable things. But to read some recent accounts, you might
think they've already failed. Take broadband: Bill Gates and
countless other industry bigwigs have complained about slow
adoption rates in the United States. Yet nearly 20 million
U.S. households have signed up with broadband in the four
years it has been widely available—a much faster rate
of adoption than that of cellphones in the early 1990s (a
common benchmark for rapid technology adoption). That's about
15 percent of all households. For comparison, only about 30
percent have one or more cellphones, despite that technology's
10-year head start. The research firm Technology Futures Inc.
(Austin, Texas) says that broadband will hit that 30 percent
mark in the United States sometime in 2004.

Even
today, though smaller in number, broadband users account for
more than half of all home-based minutes spent on-line. And
outside the United States, the figures are even more favorable.
In South Korea and Singapore, for example, more than half
of all on-line households have a broadband connection.

Broadband
providers are also working to improve the last-mile connections
to the customer's premises. The trick is to avoid radical
and expensive alterations to the central networks themselves.
New technologies for squeezing more speed out of existing
copper wire and coaxial cables are moving from testbed to
roadbed.

For copper,
two unheralded new specifications by the International Telecommunication
Union (Geneva, Switzerland) would increase the speed and reach
of asynchronous digital subscriber lines. (The specs, ITU
G.992.3 and G.992.4, would provide other benefits as well,
such as quicker start-up, and lower-power operation.) And
for coaxial cable, a pair of improvements are in the works.
One is a plan to use spectrum above 1 GHz, which broadband
cable service currently does not, greatly increasing data
rates. The other would boost capacity of cable systems by
injecting ultrawideband signals into existing cable networks,
again improving data rates.

UNDER
FIRE

HENRY
SCHACHT, the 68-year-old former Lucent Technologies chair,
returned to that position in October 2000, when the company's
stock price was US $20, or so, down from a 1990 high (reached
during his absence) of $83 a share. Today it hovers not far
above the critical $1 delisting point. The company has shed
three-fourths of its employees and has already spun off two
companies, Avaya and Agere Systems, and its entire fiber-optic
business. What's left?

Ultimately,
it's all leading up to fiber-optic lines that run right into
your house or small business. And it could be coming sooner
than you think. The reason is Moore's Law, the doubling of
computational power every 18 months, which may be ruinous
to telecommunications business models [see "The
End of the Middle"] but will be a boon to end users for
whom broadband is still not fast enough or is just too expensive.

New developments
in optical components promise to make it a lot less expensive
to use fiber-optic cable to connect the Internet backbone
to neighborhood-level network servers and routers [see "Cutting
the Cost of Optical Components," and "Paving
the Last Mile With Glass," IEEE Spectrum, December,
pp. 13-14]. Arguably, once these head-end stations are connected,
it will be a relatively simple matter to extend the fiber
out to individual homes, since telephone companies replace
at least 3 percent of their last-mile copper every year, and
many new housing units (1.5 million annually in the United
States) could start with fiber.

Mobile,
and loving it

Wireless
digital voice and data services like text messaging are the
other key market segments often left for dead by business
commentators. In fact, for companies like Sonera, Vodaphone,
and Sprint, they are the only bright spots in an otherwise
downcast tech economy. Through much of Europe and Asia, 70
percent or more of all phone users have a cellphone. In data-besotted
Japan, three-fourths of them use NTT DoCoMo's i-Mode or another
wireless Web service.

Indeed,
one of the main barriers to adoption of 3G cellular services
has been the spectacular success of 2G data services, especially
text messaging, which for Vodaphone accounted for almost 10
percent of all revenues last year and over 20 percent of all
profits. News, weather, and sports scores, multiperson mobile
games, music, e-mail, and even personalized ring tones are
all big—and growing—revenue sources. Lately, as
subscriber levels for plain old cellular phone service approach
market saturation, these additional services are where the
money is.

The reason
is that these data services are usually "on the meter": phone
companies charge customers per message, per megabyte, or per
minute, so revenue goes up with usage. That's less and less
the case for traditional local, regional, and even long-distance
landline telephone service, where flat-rate fees for hundreds
of minutes of talk time per month are common and even unlimited-usage
plans are now being offered.

If
each is good, both are better

If there's
a killer app in telecom's future, it might be the marriage
of broadband and cellular. Arguably their courtship began
with Ricochet, a service that briefly disappeared when start-up
Metricom Inc. went bankrupt in 2001, only to be resurrected
by Denver-based Aerie Networks Inc. [See "What
Went Wrong at Ricochet?," Spectrum, March 2002,
pp. 60-61.] The network offers 128-171-kb/s wireless access,
lower by far than broadband's 500-2000 kb/s, but triple the
40-70 kb/s that carriers like Sprint are (misleadingly) calling
3G. Ricochet is once again up and running in Denver and San
Diego, and is expected in additional cities shortly.

Further
in the future are true broadband cellular networks. A pair
of companies are working on them, seeking to avoid what they
see as the principal mistake of the 3G approach, namely, building
a system in which data services are carried on top of what
is essentially an architecture optimized to carry voice. Instead,
working independently of each other and using different technologies,
the two companies, Flarion Technologies Inc. (Bedminster,
N.J.) and Soma Networks Inc. (San Francisco), have designed
their equipment specifically to transport Internet data, which
comes not in steady streams of fixed-length packets but in
bursts of packets of widely varying size. Their networks work
with IP.

DARK
HORSE

When legendary
investor Warren Buffett bets on a company—in this case,
a US $500 million wager on LEVEL 3 COMMUNICATIONS,
a provider of Internet access, colocation, dark fiber, and
other high-bandwidth services—and has it then go buy
other troubled telecom companies, all at bargain-basement
prices, he must have something in mind. It's probably that
consumers are spending more than ever on communications-related
services and that, after industry consolidation, the last
companies standing will be profitable

Using
IP from the ground up is important, according to Rajiv Laroia,
founder and chief technology officer at Flarion, because in
any well-designed wide-area wireless network, the most expensive
part is the air interface, meaning the link that connects
the end user to the wired part of the network by radio. It
therefore makes sense to utilize that link as fully as possible—paradoxically,
to make it the bottleneck in the network. Inevitably, therefore,
frames (parts of packets) of data will be dropped in the air
link. In traditional voice-oriented systems used for data,
if heavy traffic requires 10 frames to be dropped, they probably
come from 10 packets, and all 10 would have to be retransmitted.

In a
well-designed IP-based wireless system, on the other hand,
an IP router in the base station closest to the user would
know which frames are in which packets, and would choose to
drop the 10 frames from a single packet; only one packet would
have to be retransmitted. (In fact, it would drop the entire
packet and maybe make it unnecessary to drop any more frames.)
The result: higher overall throughput, which is what broadband
is all about. And by using a variety of so-called quality-of-service
schemes, which assign priorities to packets depending on how
much delay they can tolerate, IP networks can be much more
effective in carrying voice traffic than voice-centric networks
are at carrying data.

Flarion
has a test cellular network up and running at its headquarters
using a proprietary variation of orthogonal frequency-division
multiplexing, which the company calls flash-OFDM. With OFDM,
the spectrum assigned to a session is divided into a series
of tones, and the transmission hops among the tones, making
10 000 hops per second. Interference with other users, both
within a given cell and among cells, is thereby reduced, and
the number of users for a given piece of spectrum is increased.

The
same peer-to-peer architecture that made music sharing such
a success can work for data transmission

Like
Flarion, Soma uses a variety of techniques, such as adaptive
modulation and adaptive error correction, to improve cell
coverage and increase data rates. But instead of OFDM, it
uses code-division multiple access (CDMA) as the air interface
to cellular networks. With CDMA, each transmitted data stream
is combined with a pseudorandom code that makes it appear
like noise to other sessions in the same cell that are using
different codes for their communication.

The scheme
works much as at a cocktail party where every conversation
takes place in a different language (code). To people who
speak only, say, English, a nearby conversation in French
simply adds to the background noise. Provided that the noise
doesn't get too loud (and CDMA systems take great care to
control power to prevent just that), the technique allows
multiple sessions to occupy the same spectrum in the same
space at the same time.

"Whether
you start with OFDM or CDMA is less important than these details
of implementation," says Greg Caltabiano, a senior vice president
at Soma. Still, the company thinks there's an advantage to
staying within the CDMA ecosystem, as Caltabiano calls it.
"You can use a lot of the same test equipment, chip sets,
algorithms, and deployment modeling software developed for
conventional voice-based CDMA systems," he says.

There
is also a non-3G-but-not-exactly-cellular, pure-IP data network
architecture. It's a so-called mesh network, in which each
user's device (laptop, PDA, or cellphone) is also a transponder,
receiving and then retransmitting the packets of other users.
In other words, the same fundamental peer-to-peer architecture
that made music sharing such a success in the past few years
can work for data transmission itself. Remarkably, such networks
can keep adding new users long after a traditional cellular
system would have to stop, because each new user increases
the network's capabilities.

TECH
WATCH

FlaSH-OFDM
(orthogonal frequency-division multiplexing) attempts to create
pure broadband (2 Mb/s) Internet protocol (IP) wireless networks
instead of overlaying an IP stack onto a network originally
intended for voice

In a
mesh wireless network, end users are also transponders, resending
packets for other users, potentially reducing link lengths
(hence the power needed) for wireless broadband communications,
and lowering network costs

Nano-OpticAL
CoMPONENTS marry subwavelength optical elements, whose features
are much tinier than the laser light wavelength they manipulate,
with nano-imprint lithography, resulting in a highly scalable,
low-cost manufacturing process

In some
such networks, the nodes are fixed locations like homes and
offices [see "Wireless
Broadband in a Box," Spectrum, June 2002, pp. 38-43].
But one, that of MeshNetworks Inc. (Maitland, Fla.), is unique,
in that its nodes are laptops, PDAs, and even phones that
can be traveling at highway speeds.

MeshNetworks'
products are dual use: they work in their own proprietary
network and are also compatible with IEEE 802.11. Indeed,
it would be foolish to not capitalize on that standard's phenomenal
popularity, another of the industry's unalloyed silver linings.

Analysts
at Frost & Sullivan (New York City) say that in 2002,
companies and home users bought an astonishing 14.4 million
wireless local-area-network (WLAN) routers, most of them for
the 802.11b standard. These are the local-access points in
cafes, businesses, and airports that serve as the nodes to
connect appropriately equipped mobile computers with wired
broadband networks. Just last month, Intel, AT&T, and
IBM announced the formation of a start-up company, Cometa
Networks (New York City), to place thousands of new access
points in just such locations throughout the 50 largest U.S.
metropolitan areas.

802.11's
potential is in fact great enough that some observers fear
it will affect the ability of cellular providers to raise
capital, needed for upcoming 3G auctions. Frost & Sullivan
predicts that annual sales of WLAN products will rise to over
36 million by the end of the decade.

By then,
we'll also have much faster flavors of 802.11. The b version
of 802.11 will soon give way to the a type. The a version
uses unlicensed spectrum in the neighborhood of 5 GHz and
tops out at 54 Mb/s, almost five times as fast as 802.11b.
Motorola's Canopy access point device is one such product.

The race
for ever-higher data rates recently drew in Lucent spinoff
Agere Systems Inc. (Allentown, Pa.) and the Eindhoven University
of Technology in the Netherlands. They demonstrated a chip
set that joins three 802.11a antennas to create a single network
connection of 162 Mb/s across a distance of about 10 meters.
When this is combined with improvements in digital encoding,
you could download an entire DVD-quality television show in
the same time it takes to grab an MP3 song today—and
do it while waiting in line for a double mocha cappuccino
at your local coffee shop.

All that
speed would be great, but what would be really useful today
is a unit that acts as a cordless phone when you're close
to your office, switches to a WLAN elsewhere on the corporate
campus, and passes seamlessly to a broadband cellular network
when you move outdoors. Another Lucent spinoff, Avaya Inc.
(Basking Ridge, N.J.), is working on just that. Indeed, the
shelves in research larders at companies like Avaya, Agere,
Motorola, Flarion, Soma, and MeshNetworks are already stocked
with wonderful new technologies. The question is whether these
firms can hang on until a global economic recovery opens up
corporate checkbooks.

If
you build it, killer apps will come

Reliable
high-speed mobile Internet access will be a foundation for
products and services we can barely imagine. Only when the
networks are built will the lightning bolt of invention strike
clever engineers and entrepreneurs. But we already know that
our increasingly mobile lifestyles will make cellphones and
PDAs even more important than they are today.

One thing
that will make cellphones truly indispensable at last is an
application that turns a handset into a kind of wallet. At
least that's the vision of Derick Wilson, chief executive
officer of Optical Antenna Solutions (Nottingham, UK). His
company has a patent on a light-concentrating lens originally
developed at the University of Warwick. The lens allows the
infrared beam found in PDAs and some cellphones to transmit
across longer distances, even with not very accurate aiming.

According
to Wilson, this is the missing piece of the puzzle for systems
that let you point your cellphone and pay—at fast-food
drive-through windows, supermarkets and department stores,
vending machines, and even for that cappuccino at the coffee
shop. Wilson is already talking with credit card companies
like Visa. By storing credit card information on the phone
itself (suitably encrypted, of course) and using the same
sort of personal identification numbers used at automated
teller machines, card companies hope to put a big dent in
an annual credit-card fraud tab of $17 billion.

Another
e-mail from my friend, sent from her porch, says it all: she's
getting a Sony Ericsson T68i phone/personal digital assistant.
"Finally, I can synchronize the data on my desktop, my laptop,
my iPod, my cellphone, and my PDA." Magic.

TO
PROBE FURTHER

Details
of a June 2002 IEEE-USA Workshop on U.S. National Policy for
Accelerating Broadband Deployment are available at http://www.ieeeusa.org/conferences/broadband/

NanoOpto
has two white papers concerning subwavelength optical structures
and nano-imprint lithography at http://www.nanoopto.com/technology/index.html

CREDITS:
SCOTT BRADNER/HENNY RAY/AFP PHOTOMICHAEL SMITH/GETTY IMAGES

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