Subject: [NEXTEL-1] Growing Signals for Reliable Wireless

From: [email-masked]
Date: Tue, 26 Aug 2003 01:09:17 -0400

Growing Signals for Reliable Wireless

Cellular outages during the blackout have increased pressure for network
improvements. Can cash-strapped carriers keep the FCC happy?

Megan O'Connor, an immigration lawyer in New York City, had to walk down nine
flights of stairs when her office building lost power in the massive Northeast
blackout on Aug. 14 . But she found that her cell phone worked -- sporadically.
During her hour-long walk home, her T-Mobile wireless service died. The next
morning, 30% of T-Mobile's New York City cell sites, devices responsible for
transmitting wireless phone signals, were out of commission, the outfit says --
about the same as for most other wireless carriers.

A decade ago, such a problem would have affected a relative handful of people. But
today, 140 million Americans depend heavily on mobile telecommunications -- about
7 million, in fact, no longer have land-line phones. As a result, cell-service
reliability has become a life-and-death matter for emergency workers or for anyone
in need of help.

SCRUTINY SPURS IMPROVEMENTS.  The cellular meltdown of Aug. 14 is sure to prompt
inquiries into the reliability of cell-phone service. The carriers themselves,
having upgraded after the September 11, 2001, terrorist attacks on New York and
Washington, D.C., are very likely to make more enhancements. In part, they'll be
trying to deflect a regulatory review by the Federal Communications Commission
(FCC), which is now likely to mandate network improvements, says Michael Grossi,
an analyst with wireless consultancy Adventis. The FCC -- which regulates the
industry -- might require that cell sites have no more than 5 to 10 minutes of
downtime per year.

One result will be higher costs for cellular operators. But they should benefit as
well, since anything that makes mobile communications more reliable is likely to
embed it more deeply into everyday life.

Superficially, the cause of the Aug. 14 interruptions is obvious: The batteries
that power cell sites during an electricity outage ran down after an hour or two.
Moreover, the carriers were swamped with calls. The hundreds in New York City are
each designed to handle about 6,000 callers per hour. When the volume triples or
quadruples, it's busy-signal time -- just as Ma Bell callers experienced on
Mother's Day decades ago.

TIGHT-FISTED WITH UPGRADES.  Technologies that could solve such problems exist,
but financially strapped wireless carriers have adopted them slowly. Of the six
major carriers, perhaps four are profitable, in part because wireless subscriber
growth has slowed more rapidly than expected recently, into the single digits.
Cell-service price wars are reducing revenue per subscriber, a trend that could be
exacerbated come November by a new federal law that will let mobile customers
retain their phone numbers when they switch carriers. So, at the moment, most
wireless companies are restricting their capital spending to maintenance, says
Grossi.

The post-September 11 changes were significant. Carriers installed more backup
diesel generators for the nerve centers, called switches, that connect every 100
or so cell sites. No. 5 carrier Nextel (NXTL ), with 11.7 million customers, even
carts mobile generators around the country, based on its own weather staff's
projections of tornado or hurricane activity. In fact, the cell switches that
serve New York City kept running during the blackout. So, once calling volume fell
to normal levels and the electricity came back on, cell service came back, too --
by Aug. 18. "The wireless industry did much better than during September 11," says
Robert Sanchez, chief technology officer at wireless consultancy InCode Telecom.
"I wouldn't give it an A-plus, but I would give it a B-plus."

Going forward, that won't be nearly good enough, however -- and political pressure
is building for a fix. On Aug. 24, Senator Chuck Schumer (D-NY) pointed out that
only one wireless outfit operating in the New York area --T-Mobile -- allowed
emergency workers access to its network during the blackout. He called for
legislation that would require such priority access on all cell systems, as well
as longer battery support and increased network capacity. In anticipation that
cell carriers will either want to upgrade or be forced to, phone-equipment makers
such as Nortel Networks (NT ) are rushing to market technologies that improve the
resilience of cellular networks.

SPACE FOR POWER.  Batteries are one big area of focus. Unlike regular phone
companies, which only need backup power for switches, wireless concerns also need
that at cell sites. Problem is, many sites in urban areas are small and hard to
expand, says Dave Murashige, vice-president of marketing for wireless networks
business at Nortel. So as the number of wireless subscribers doubled between 1998
and 2002, carriers began sacrificing battery space to install the equipment to
support a higher customer load. One solution is for communities to allow carriers
more space per cell site.

Another option is to increase the efficiency of existing technology. A technology
called baseband predistortion (BPD), which Nortel will begin installing in
wireless networking products later this year, increases the efficiency of an
amplifier chip that regulates the strength of the radio signal cell networks use.
In tests last year, BPD increased the amplifier's efficiency by more than 50%,
says Nortel's Murashige. That could extend the life of a cell-site battery to
nearly three hours and cut the facility's operating costs (though a BPD setup will
cost more to buy).

A technology that could help manage sudden spikes in call volume is a souped-up
version of a vocoder, a chip that's already used to convert voice from analog to
digital format. Developed by several companies, including Nortel and Qualcomm
(QCOM ), the latest version of the chip can do the task 25% faster, says InCode's
Sanchez. It has already been tried out by the likes of No. 2 wireless provider
Cingular.

SPECTRUM SQUEEZE.  Still, many carriers say they alone can't solve their biggest
reliability problem: Their capacity is limited by the amount of wireless spectrum
they own. And spectrum is tough to find as it's already used by the police and
radio stations, among others. What's more, many carriers are limited by local
regulations: Fearful of fire hazards, for instance, New York City prohibits the
installation of diesel-powered electricity generators in apartment buildings,
where some cell towers are located. Verizon Wireless, the U.S.'s largest provider,
hopes to pressure the city to change that, says a spokesperson.

Many carriers also point out that they don't have the money to prepare for every
contingency. For instance, software that reroutes calls from a cell site that has
failed to one nearby that's working can cost as much as $1 million per cell site
per year just in licensing fees, estimates Sanchez. A service provider such as
AT&T Wireless (AWE ) has 30,000 cell sites nationwide, he figures. Equipping each
one with one more feature would require $30 billion a year -- nearly double the
company's 2002 revenues.

By the same token, though, increased reliability could pay off in greater customer
satisfaction, which has long suffered in the cellular business for a wide variety
of reasons. And the carriers could hold down costs by upgrading their networks in
stages. What's for sure is that they'll have to do something because service
outages of 15 to 40 hours, as occurred in the Northeast, are unacceptable,
industry insiders say. And if wireless companies don't fix themselves, the
government just might.

http://www.businessweek.com/technology/content/aug2003/tc20030826_3914_tc024.htm

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