WIRELESS LOCAL LOOP FORUM TRANSCRIPT
UNTANGLING WIRELESS LOCAL LOOP:
TECHNOLOGY AND APPLICATIONS
MODERATOR: KENNETH ALLEN, CHIEF, SPECTRUM DIVISION
INSTITUTION OF TELECOMMUNICATIONS SCIENCES, NTIA
25 MR. ALLEN: Well, welcome again to the wireless
1 local loop forum. We're going to have several panels
2 today. The first one, which I'm chairing, is the one on
4 All the speakers will be given only 10 minutes
5 to speak, which is going to be timed, and we would like
6 everyone to save their questions until all the speakers
7 have had a chance to give their presentations, then we
8 will have time for questions and discussions afterwards.
9 Well, what is wireless local loop? Assistant
10 Secretary Irving gave us a little bit of information about
11 that, but the term comes from the term wireless, or local
12 loop, comes from the term that is used to describe the
13 wire that comes from the telephone system to your home, so
14 we're talking about wireless local loop.
15 I think the core concept is telephone service to
16 the home wirelessly, but the concept is actually much
17 broader than that. As we know, there are other services
18 now in the home besides telephone, such as cable TV, and
19 wireless local loop can incorporate a much broader concept
20 such as video on demand, interactive video, data services,
21 as well as telephony.
22 One of the most important aspects of wireless
23 local loop will be competition. Right now, though, there
24 are a number of services available in the home that really
25 don't compete with each other, or only marginally.
1 I think that one of the things that we will see
2 wireless local loop do is introduce competition to the
3 home telecommunication services for the first time.
4 What then the consumer will see from their
5 perspective is competition reducing prices but also a
6 myriad of choices, and possibly confusing choices, because
7 there's a number of different ways that wireless local
8 loop can be provided, so there will be a number of
9 different services. Broadband services, as I mentioned,
10 video services perhaps, narrow band services, and also the
11 potential for a mix, where the same service provides you
12 mobile communications when you're away from home, but also
13 provides you with fixed communications when you're at
15 So I'd like to get started by introducing our
16 first speaker today. It's Dr. Arunas Slekys. He's the
17 vice president, Wireless Networks Division, Hughes Network
18 Systems. He is responsible for the worldwide marketing,
19 sales, and business development of HNS wireless network
20 products, including the company's family of GMH 2000 amps,
21 TDMA, ETDMA, CDPD, and Air Reach personal cordless
23 His long affiliation with the wireless industry
24 began at Novatel Communications. There he served as
25 senior vice president responsible for the company's
1 inception, for establishing product research and
2 development, and spearheading the company's efforts in the
3 small cellular systems marketplace.
4 Dr. Slekys began his telecommunications career
5 more than 20 years ago at Cal Tech's jet propulsion
6 laboratory, where he worked as a digital communications
7 research engineer developing deep space network and pulsar
8 tracking systems. He later joined Bell Canada and
9 subsequently Bell Northern Software Research, managing
10 switched network-related systems development and advanced
11 technology programs.
12 He owns a bachelor of applied science degree in
13 electrical engineering from the University of Toronto, a
14 master's degree from the University of Illinois, and a
15 doctorate in computer systems engineering from UCLA.
16 He is a coauthor of a founding patent for CDPD,
17 cellular digital packet data systems, and is a frequently
18 published author on wireless communications.
19 Dr. Slekys.
21 DR. ARUNAS SLEKYS, HUGHES NETWORK SYSTEMS
22 DR. SLEKYS: Well, Larry set the stage, but I
23 just wanted to comment a little on his image of the person
24 in Rome driving the Vespa scooter with one hand on the
25 cellular phone. I think there's nothing worse than a
1 Russian driving a Volga down the middle of the road, and
2 with no hands on the wheel and holding two phones, and I
3 was in the back seat, and we did get there, but it was a
4 hair-raising ride.
5 Anyway, dial tone is what this meeting is all
6 about, and it's dial tone by wireless that we're all
7 personally involved with, so setting the stage I thought
8 in the 10 minutes of rigorous timekeeping that I'm faced
9 with I'll at least spend a little bit of time talking
10 about the opportunity, and a little bit on the technology
11 and where it's going.
12 The opportunity, as I said, is basic dial tone,
13 and the future generations of it that we've evolved
14 through using cable and fiber in some cases, although not
15 as much as originally promised, and now wireless, and
16 expanding from wireless dial tone and simple fax into
17 broadband wireless, so we'll be talking a little bit here
18 about basic telephony and then the new universe of
19 broadband wireless, or voice data and video, interactive
20 video, et cetera.
21 On the wire line side, as Larry pointed out, 80
22 percent of the world is disadvantaged. 20 percent of us
23 in the so-called developed countries own all of these 800-
24 odd thousand phones, and the growth rate has been
25 painfully slow, even though everybody knows the economic
1 growth is tied inexorably to telephone density per capita.
2 The reason is that most of the structures in
3 delivering the service, the companies out there have been
4 monopolies. Monopolies are not usually very attractive
5 places to put money in if you're an investor, so in fact
6 the competitive element is as important as the technology
7 here in developing wireless worldwide.
8 Every country Hughes is involved in -- I have
9 been involved in all of them more than once -- generally
10 speaking are fundamental. The first step is to establish
11 there will be ability to invest in a privatized entity.
12 Nobody's interested in putting money into a monopoly.
13 Plowing more into the ground isn't where it's at, so this
14 has been a slow growth rate because of that.
15 It's changing -- cellular taught us how -- and
16 now we're choking on its success. The C block is an
17 example, choking, because we thought the opportunity was
18 unlimited. Well, it isn't unlimited. There are bounds to
19 any business, and we've learned a lot about the value of
20 spectrum, 10 years ago when we gave it away to now, when
21 we auctioned it at exorbitant prices because of the format
22 of the C blocks, but that's history, and we're learning.
23 But the net result in the marketplace is a very
24 substantial business, 20 percent as a conservative
25 estimate annually, and pushing at 200 million subscribers,
1 so a quarter of all dial tone worldwide now is on air
3 And projected over the next 5 years to get to
4 about 1/2 billion, or put it another way, at $500 per
5 subscriber network you can do the calculation. The
6 numbers are enormous in terms of the infrastructure and
7 delivery opportunity, 200 billion today and 2-1/2 times
8 factor increase over the next 5 years.
9 Fixed wireless is a special case, sometimes
10 viewed as nonmobile, but as we know, if you've got a
11 wireless ability the opportunity is also there to create a
12 hybrid, so even though fixed is now viewed as a separate
13 market we see that the two merging mobile and fixed
14 together over time will be one opportunity, but there are
15 differences in different countries in terms of regulatory
17 Some operators aren't allowed to deliver mobile
18 services, they can only deliver fixed, and vice versa, and
19 often technology sold by different countries and different
20 companies becomes the hammer.
22 MR. ALLEN: Could we ask you to speak into the
23 microphone, please?
24 DR. SLEKYS: Well, I can walk around, because it
25 will be hard for me to keep pointing.
1 So the bottom line is fixed wireless and
2 cellular are merging together, and even though this is a
3 smaller number today, about 4 million estimated fixed
4 wireless, I looked at the numbers put together by NTIA and
5 it was somewhere around 1-1/2 of actually in commercial
7 This is meant to say about 4 million contracted
8 commercially to be put in service, because they're not all
9 in service today, but they will be over the course of the
10 next year or two, and growing at a faster rate -- again
11 conservatively I've estimated a 40 percent rate. Some
12 people are putting the 5-year number closer to 25 to 30
14 This business in and of itself is already about
15 $5 to $6 billion enterprise and growing, as shown, about
16 four to five times over the next 5 years, so the
17 opportunity is immense, and it's of enormous impact,
18 positive impact in a country's economic development.
19 Why wireless? As engineers, we go to first
20 principles and try to solve the problem of basic telephony
21 . It's faster than cable or any other physical means. It
22 now is in fact lower capital cost. People still question
23 whether it is in all cases. Often it's viewed that in
24 high density urban environments wireless is not as cost-
25 effective as wired. Well, if you've got the cable in
1 there already, sure, you're right, but if you don't have
2 the cable, it's no longer the case.
3 So the paradigm that we started this country
4 with when AT&T was formed is no longer valid, that
5 paradigm being that the local loop can't sustain itself as
6 a business, it needs to be subsidized with long distance,
7 that's not true any more.
8 And the other important element is the lower
9 cost of unused capital compared to cable. When you plow
10 cable or fiber in the ground it takes you about 8 to 10
11 years to recover the investment because those cables have
12 to be filled with traffic before you start getting the
13 payback. With wireless, you can match the demand in
14 smaller incremental steps and not lay out a lot of money
15 before you start to see the return.
16 So you can start with small, incremental growth,
17 and in fact in operating cost advantage, because a
18 customer could be, in the case of a large cell, as far as
19 20 or 30 kilometers from the center, and the cost to
20 service that person is no different than if they're right
21 in the center, because radio waves will travel equally
22 well for that distance as they will for a short distance.
23 So unlike fiber or cable, again, where the cost
24 is a function of distance, and labor is growing every year
25 in cost, radio tends to be distance insensitive, and so
1 there is a lower operating cost.
2 The switching and the backhaul and all that
3 infrastructure is the same, and so it's in the fundamental
4 access mechanism that the advantage is gained.
5 Finally, the flexibility, because we can move
6 cells around. If we guess where the traffic is and we
7 find that it's not quite the same as it ends up actually
8 occurring, and we have to move some cells or add cells or
9 add channels in one cell and reduce them in another, this
10 can be done readily. Once the cables are in the ground,
11 they're there, and you just have to live with it. You'd
12 better have guessed right in your market forecast.
13 And finally, the services. Fundamentally we can
14 deliver on wireless anything that can be delivered on
15 wire, and now with the broadband wireless, including video
16 and high bandwidth demand systems, with the advantage of
18 So a simple chart here of the economics. I've
19 left some handouts there. I don't know if any of you saw
20 them, but feel free to grab one. If you didn't get one,
21 just come to me after and I'll be glad to send you one.
22 This is a simple snapshot of what I just commented on, the
23 cost of unused capital plowed in the ground and waiting
24 for a return, or try to match the demand and do so in a
25 very incrementally granular fashion with wireless and then
1 if you have to move it, you can move it.
2 My charts include a summary of technologies and
3 numbers of phones, so you can have a look at those. In
4 10 minutes I obviously can't dwell on this subject.
5 Suffice it to say that about half of the opportunity today
6 is still analogue, but it's shrinking, and the growth
7 rates will be negative because people are no longer
8 putting in analogue networks, but the installed base of
9 200-odd million is about half analogue still, and that
10 change again occurring as digital occurs in a big way.
11 In digital the largest force is the European
12 force. GSM is still the major technology, one reason
13 being that we were busy debating CDMA/TDMA here in the
14 States and we forgot about the market. Well, we're coming
15 back into it, and CDMA and TDMA will be about equal in our
17 There's also a new category evolving here, the
18 microcellular technology, low mobility as they're put
19 here, which include Japanese PHS, European DECT, and North
20 American PACS.
21 Just a snapshot of where Hughes has -- this is
22 the only compulsory propaganda I'm going to give you about
23 Hughes, but you're again welcome to ask me questions
24 afterwards. We're in every continent, and we have over a
25 million lines commercially contracted, which by pyramid
1 research estimates earlier this year puts us at what we
2 think is the right point, about a 30-percent market share
3 against our competition.
4 A little bit, to explain the differences in
5 wireless, analogue and how digital cellular, typically
6 large cell structures covering 25 kilometers perhaps reach
7 in a cell, and delivering pretty well basic services --
8 speech, fax, you know, low-speed data, 9.6 kilobits on a
9 typical cellular channel. You know you can't send video
10 over a wireless cellular phone yet, but we're looking at
11 getting up to the T-1/E-1 rates, the high speed multiple
12 64 kilobit rates, with what I'll call broadband wireless,
13 and this is a technology emerging as a general technology.
14 Specific versions, LMDS/MMDS you may have heard
15 of, which are the cellular vision type home wireless video
16 broadcast technologies. Broadband wireless is meant to
17 encompass that, and things like wireless fiber. In other
18 words, alternatives to fiber, technologies that can carry
19 huge amounts of traffic 24, 38 GHz and so forth, companies
20 like Teligent, Teledesic and others that will be deploying
21 broadband wireless because fiber is no longer necessarily
22 the way to go. Fiber again is stuck in the ground.
23 The beauty of the wireless technique, whether
24 it's a local access or a back phone, is that you can
25 deploy it on demand. You can parcel out channels to some
1 customers for some period of time, and then move it around
2 to somebody else within that cell coverage. It's not
3 stuck in one physical medium.
4 A little bit on the service requirements most
5 operators face. Again, I stress that as we evolve to
6 broadband wireless, it's no longer a world of voice and
7 data that we're with today in mobile cellular. It's voice
8 data video, and then the wide band services for other
9 types of data applications, like frame relay and so forth.
10 So we are facing a technology issue as network
11 suppliers that we have got to deal with, not just access
12 technologies of today, 801.9 GHz, various flavors, but now
13 the broadband wireless technologies that are evolving that
14 companies that are new, Celex, WinStar and others, will be
15 deploying because it makes more sense than fiber.
16 Another kind of technology mixture we see around
17 the globe, where there's a wire line switch with regular
18 loops, and then we build out cell structures and provide
19 fixed wireless terminals. This is very popular in
20 countries where, like in the Czech Republic, they could
21 not actually put in the cables in the ground in the
22 downtown and core area, such a beautiful old town, and if
23 you've seen it, you know it's virtually impossible to dig
24 up the cobblestones, so we put in 40,000 of those.
25 And actually in that country they install them
1 now themselves, the single units about the size of a page,
2 a little smaller, comes with a battery backup, plug it in
3 to the power, connect an antenna, there it is on the
4 glass. It's got sticky tape on it. It takes you about 10
5 minutes, and if the little green lights go on we had
6 better have done our RF planning right. You've got dial
7 tone. Connect up to five extension phones, a fax machine,
8 take it home with you, and the Czechs let you do that for
9 about $250 today, and you have dial tone.
10 In MSU we design this actually up to 96
11 connections, because in Russia there were apartment blocks
12 that had up to 96 customers. Believe it or not, it was
13 designed for the blocks that were built in the former
14 Soviet Union, and people now can have dial tone through a
15 shared box. It lowers the cost to them.
16 Speaking about economics, typical end-to-end
17 price today is below $1,000. That includes the switching,
18 the back call, the radio equipment, and the subscriber
19 equipment. So when you look at a loop, a wire
20 alternative, it's typically $1,000 and up as the distance
21 increases from a cellular switch, or from a switch, so as
22 I mentioned earlier, economics are in favor of wireless
23 and will continue to be.
24 Another derivative of in-building from a mobile
25 world wireless office systems, this has enormous
1 opportunity surrounding it, because this will allow us to
2 get to the heart of productivity improvements of people
3 that work in places like hospitals and factories, even
4 ourselves in white collar jobs, although it's annoying to
5 get phone calls in an office setting, particularly if
6 you're in meetings all the time.
7 But if you're working, like some folks out there
8 that are on the floor, and they're taking measurements,
9 and they've got to make a call, or the boss has to reach
10 you to send you some data, or you need to do a quick
11 inventory check, the in-building wireless system is an
12 extension of the macro so you can roam seamlessly. It's
13 going to up new venues of opportunity.
14 So in conclusion, as the subject we're dealing
15 with overall is universal telephony, the conclusion is
16 only that high capacity wireless is the most cost-
17 effective way to go.
18 Thank you very much. I made it.
20 MR. ALLEN: Thank you, Dr. Slekys. Our next
21 speaker is Dr. Jeffrey Krauss. He is a consultant in
22 radio spectrum management and telecommunications
23 technology policy. Dr. Krauss' clients range from major
24 equipment manufacturers to small start-up companies.
25 Clients have used his expertise to obtain new or changed
1 spectrum policies or standards, thereby creating important
2 new business opportunities. He is an active participant
3 in telecommunications policy and standards activities of
4 Government bodies and trade associations, including high
5 definition television, personal communications service,
6 and rural administrative conferences.
7 He writes a monthly column for Communications
8 Magazine and a design communication, engineering and
9 design magazine entitled Capital Currents, which reviews
10 Federal Communications Commission and U.S. congressional
11 activities that influence telecommunications policy.
12 He has also contributed articles for Applied
13 Microwave and Wireless Magazine, Multichannel News
14 Broadcasting Magazine and Telecommunications Magazine.
15 Dr. Krauss has over 25 years of professional
16 experience, including employment at the Federal
17 Communications Commission, Bell Laboratories, American
18 Satellite Corporation, and MA/COM.
19 Dr. Krauss holds a Ph.D in theoretical physics
20 from Case Western Reserve University, Cleveland, Ohio.
21 Dr. Krauss.
23 DR. JEFFREY KRAUSS, CONSULTANT,
24 TELECOMMUNICATIONS AND TECHNOLOGY POLICY
25 DR. KRAUSS: Thanks very much. It's a pleasure
1 to be here today to talk about some of the technical
2 issues that are arising in the area of wireless local
4 If you would go to the next slide, I want to
5 categorize wireless local loop into four groups, first
6 that I would call modified mobile communications
7 products, then part 15 devices, then a small category -- I
8 don't know how exactly it's going to develop -- wireless
9 communication services and, too, LMDS, and then finally I
10 want to spend most of my time talking about broadband,
11 about 10 GHz.
12 I'm not going to talk about the modified mobile
13 communications products. I think there are going to be
14 other panelists that focus on that. But part 15, you've
15 already heard Larry Irving talk about Ricochet, which is
16 the Metricom product that operates at 902 to 928. That's
17 oriented toward data communications.
18 In the 2400 MHz band Tadiran has a product that
19 I'm going to talk about in a little bit more detail, which
20 is truly a point-to-multipoint wireless local loop
22 At the 5 GHz and 24 GHz product range the
23 products seem to be mostly point-to-point, rather than
24 point-to-multipoint, but there's a petition pending at the
25 FCC from Sierra Digital asking to increase the power to
1 power limits there so that they can provide more
3 The Tadiran product, it potentially can operate
4 in a variety of frequency bands. In this country it's
5 being sold in the 2400 MHz band. It's a point-to-
6 multipoint frequency hopping spread spectrum product, can
7 achieve, depending upon the attend at the base station,
8 anywhere from a mile up to 6 mile range, and it's all
10 Go ahead to the next slide and I will show you
11 some of the places it's being deployed in the United
12 States. It's being deployed primarily by telephone
13 companies, not by competitive access providers, because
14 telephone companies are under a lot of pressure in some
15 areas with held orders, under pressure from their public
16 utility commissions, and they are using this product --
17 you don't need a license. Part 15 devices are unlicensed.
19 Anybody can deploy them, but it is the telephone companies
20 that are the initial market, at least in this country.
21 This is the way the radio system operates in a
22 little bit of detail. It's a frequency-hopping product,
23 which means that each base station has a series of hopping
24 frequencies. Within each hop there is a time division
25 duplex, sharing of the frequency slot by both the base
1 station and the subscriber station, so in that case it's
2 similar to the personal handy phone in Japan, and then
3 each -- so each frequency slot then is divided up into
5 Let's move on to a category -- I don't know
6 whether this is going to develop into a true wireless
7 local loop category or not, but around 2 GHz there are
8 two services that could potentially develop. Wireless
9 communication services, WCS was auctioned by the FCC in
10 April of this year.
11 The technical restrictions that the FCC has
12 imposed make it difficult to use this band for mobile
13 communications, but -- and it is not clear -- it is not
14 clear what the licensees are going to do, what the auction
15 winners are going to do. I think we will have to see.
16 But this is potentially a band that could be used for
17 wireless local loops.
18 Another band is MMDS. Now, MMDS today was
19 widely u sed for one-way video distribution, but there's a
20 petition that was submitted to the FCC, and the FCC just
21 recently issued a notice of proposed rulemaking to allow
22 two-way operations on these frequencies.
23 There's a challenge here. It has to do with
24 interference -- technical challenge. It's not clear that
25 you can use some of these channels for basically high
1 power one-way broadcasting and then adjacent to them use
2 other channels for two-way cellularized communications.
3 We will have to see what develops here, but this is a
5 What I really want to talk about, though, is
6 broadband. That is, frequencies above about 10 GHz, and
7 the potential to use those for wireless local loops.
8 There are really, I believe, five frequency bands that we
9 ought to focus on, although some people say that even
10 below 18 GHz there are some frequencies that could be
11 used, but 18 and 23 are two of the bands. They've been in
12 use for quite a while, and then the DEMS band and the LMDS
13 band, which are just starting to emerge, and then finally
14 38 GHz.
15 This table tells you precisely what frequencies
16 we're talking about. It tells you a little bit about the
17 channel plans, the band channel bandwidths, the transmit-
18 receive separation -- that's important for that plays a
19 big role in determining the equipment cost because of the
20 filtering requirements that it imposes, and then finally
21 whether the band is licensed on an individual link basis
22 for area-wide communications.
23 Now, I want to make one additional point here,
24 and that is regarding the LMDS frequencies. It's very
25 complicated. There is no specified channel plan or
1 channel bandwidth, and there is no specified transmit-
2 receive separation. That's in the FCC rules.
3 The FCC rules are very flexible. That's an
4 advantage. The disadvantage is that equipment
5 manufacturers don't know what product to develop. There's
6 a big chunk of spectrum for LMDS that first sub-band, 27.5
7 to 28.35, that's 850 MHz. That's probably well-suited for
8 one-way video distribution, but maybe it could be divided
9 in half and used for two-way operations.
10 The 29.1 to 29.25 band, that's shared with
11 satellite services, with the feeder-link earth stations
12 that are going to be used by -- are being used by
13 Motorola, Iridium, and by, I think it's TRW Odyssey, and
14 the 31 GHz piece, that's actually divided into two pieces
15 that are going to be auctioned separately.
16 The band is used a little bit right now by some
17 municipalities by point-to-point communications that
18 control traffic signals, and so some of those people are
19 going to have to be moved out, so LMDS faces the
20 challenge, it's not sort of the routine channel plan,
21 transmit-receive separation that these equipment
22 manufacturers are used to dealing with.
23 Okay. One of the differences between these
24 frequency bands is that some of them are licensed on a
25 point-to-point basis. Individual links are licensed.
1 Whereas other bands are licensed on an area-wide basis,
2 and area-wide licensing is a really important, tremendous
3 advantage, because it allows links to be deployed quickly.
4 You don't need to do frequency coordination
5 against other users and get their approval on an
6 individual link-by-link basis, and you don't need to go on
7 public notice at the FCC. It allows the licensee to
8 decide how much spectrum reuse to achieve. It allows the
9 licensee to decide whether to use narrow beam antennas or
10 wide beam antennas.
11 Frequency coordination for the most part you do
12 against your own system rather than others, so it has
13 implications for network design.
14 I want to touch briefly on two additional issues
15 at these frequencies. One is rain attenuation and
16 atmospheric absorption, and then secondly building
17 blockage. While rain attenuation and atmosphere
18 absorption, the major impact that it has is on your path
19 link, it means that as you go up to higher frequencies you
20 need to deploy more cell sites.
21 This is an ITU graph. I like to show it because
22 along the bottom the scale is in GHz, so it goes from zero
23 up to 1,000 GHz. It's nice to know there are people who
24 are thinking about the radio spectrum up to 1,000 GHz.
25 This is the same chart, but only in the region 1 GHz up to
1 about 300. The point here is that there are some specific
2 frequencies where there is tremendous signal attenuation,
3 and you need to minimize -- you will have minimum path
4 links if you operate on those frequencies.
5 Let's see how quickly I can go through the rest
6 of these, since I've run out of time. Rain attenuation is
7 another important issue. As you go up in frequency the
8 rain attenuation increases substantially, and the result
9 is that at the higher frequencies you need very short path
10 links in order to deploy a network.
11 Building blockage is an important issue. Go
12 ahead quickly to the next chart now. There are data bases
13 that you can use to determine whether there is actually a
14 line of sight path between your cell site and your
15 subscriber station.
16 This is a picture of -- this is Washington, D.C.
18 There's a cell site here. This is 15th and M. The
19 colored buildings are buildings that block line of site
20 paths. The buildings that have brown dots on them are the
21 buildings where you can achieve a line of sight path.
22 Go to the next chart -- and you can do
23 calculations with data bases of this sort and it will turn
24 out that really there are a lot of line of sight paths.
25 If you pick arbitrary cell sites a lot of paths are
1 blocked, so one of the challenges for all of these systems
2 is going to be your network design in order to avoid path
4 This is just a summary of what I think the major
5 challenges are. Building blockage is a major challenge
6 for all of these, and I've talked about some of the other
7 challenges as I've gone through.
8 Finally, the policy issues, I think the major
9 policy issue here is confusion. Wireless local loop
10 means different things to different people. There are
11 different frequency bands involved. They have different
12 advantages, different disadvantages. You can use them for
13 different services. But I think that's one of the major
14 barriers that's going to have to be overcome, is this
15 confusion in the marketplace.
16 Thank you.
18 MR. ALLEN: Thank you, Dr. Krauss.
19 Our next speaker is David Trinkwon. David has
20 more than 30 years experience in the telecom industry. I
21 think all together we have well over 100 years experience
22 up here, both in North America and worldwide. He is
23 currently directing Nortel's fixed wireless access
24 business development for the North American market, and
25 has published many papers, articles on the subject,
1 including Nortel's responses to various FCC proceedings on
2 wireless local loop and universal service, and the recent
3 FCC wireless local loop tutorial.
4 Today, David will summarize the various wireless
5 local loop technologies, which will help incumbent and
6 competitive fixed operators to resolve some universal
7 service and facilities-based competition issues for
8 residential voice data and Internet access applications,
9 and what regulatory actions are needed to enable these
10 technologies to be developed.
11 DAVID TRINKWON, DIRECTOR OF MARKETING,
12 NORTH AMERICAN FIXED WIRELESS ACCESS, NORTEL
13 MR. TRINKWON: Thank you very much. good
14 morning, and I would like to thank the NTIA and the CTIA
15 for organizing today and giving us the opportunity to
16 share this information with you.
17 I'm going to summarize the different families of
18 technology, some of which you've already heard a lot
19 about, so I'm going to focus on the ones that you haven't
20 heard a lot about so far, how they do and don't fit the
21 various applications, especially in relation to
22 facilities-based competition and universal service
24 I'm going to touch on the regulatory issues in
25 terms of the enablers needed, and I'm also going to point
1 you to more detailed information that we've got available
2 at our booth, and there are copies of the charts out at
3 the front if you didn't pick them up already.
4 One of the papers was some comments we filed
5 last year on the DCS petition for spectrum. There's a lot
6 of information in there. It is a year or more old right
7 now, so there is some updated information as well, but the
8 first way to look at it is to look at it from the point of
9 review of the end user market, which covers everything
10 from mobile voice and data users on the left and to
11 broadband users watching TV's or businesses taking
12 multiple T-1 feeds and so on.
13 That really is the whole range of the markets
14 for telecoms access, and in terms of technologies, on the
15 left in the red triangle are what we would loosely call
16 the mobile technologies which obviously so far have been
17 rooted in the mobile services, but they do have the
18 technical capability to offer fixed or hybrid fixed and
19 mobile services, especially for voice, especially for
20 lower speed data applications, and those technologies are
21 evolving to try and offer data speeds up to a few hundred
22 kilobits and potentially one or two megabits per second
23 over the next 4 or 5 years.
24 They do have some limitations. They have
25 limited bandwidths available. The types of air interfaces
1 used limit some of the features and services they can
2 offer, and they also have some capacity limitations in
3 terms of voice traffic and data traffic for which
4 increasing the number of cell sites is one way around it,
5 but then that tends to push the cost up and upsets the
6 economics, so there is a balancing act.
7 So the dotted area shows that these technologies
8 do have a limited ability to take over the whole of the
9 telecoms' access business from the wire line operators,
10 but nonetheless the emerging fixed mobile integration
11 market that we have started to hear about, which isn't
12 quite here yet, could easily reach 50 million homes by the
13 year 2000.
14 There are already 30 or 40 million homes with
15 one or more mobile phones. I think Larry Irving just
16 confuses the statistics. We don't know if he has two
17 homes or not, but he's got lots of phones.
18 Out of 100 million households that means -- who
19 also have a wired line in the U.S. at the moment, that
20 means it's quite easy to think of that 50 million
21 households in a couple of years or so could redefine the
22 way in which they buy their voice service from a
23 combination of fixed and mobile operators, using various
24 combinations of technologies.
25 That is a major market segment. I'm not going
1 to spend much time on it today, certainly not in 10
3 At the other end the green triangle is the
4 broadband technologies, which in the wired world is fiber,
5 and some copper now with HDSL and so on, or the broadband
6 fixed wireless technologies, traditionally point-to-point,
7 but now point-to-multipoint, as we have seen with Teligent
8 and the recent application by WinStar to change their
9 licenses to point-to-multipoint, and obviously we expect
10 to see a lot more activity there when the LMDS auctions
11 are over and done with and we can see where those business
12 cases are going, and we have technologies in that area as
14 These technologies have a limitation, however at
15 the bottom end in terms of supplying small amounts of
16 capacity economically to individual residences and small
17 business presences. One reason why fiber to the home and
18 fiber to the curb hasn't quite happened yet, despite lots
19 of trying, is that they just can't get the economics right
20 to deliver small amounts of capacity to individual
22 So in the middle, the black triangle is the area
23 dominated up to now by copper and fiber and the incumbent
24 telephone networks, very, very specialized to serving
25 individual premises, homes and small offices, with T-1
1 links and multiple T-1 links going up to the larger
2 premises, and in there we have this category of wire line
3 equivalent fixed wireless access, which is where I'm going
4 to focus on today, because this is where we focus on
5 facilities-based competition and universal service in the
6 wire line area.
7 And the main characteristic is that these
8 technologies must be interchangeable from the operator and
9 the customer service point of view with the wire line
10 technologies that they are used in conjunction with.
11 Thank you.
12 Just to show -- you know, these systems are
13 alive. They are being deployed in many countries around
14 the world, not just third world and developing countries,
15 and not just in rural areas who can't get anything better.
17 We've heard Ionica mentioned in the U.K. Ionica currently
18 has about 30,000 subs live after their first year of
20 The interesting thing is that their whole
21 business case is based upon a minimum 5 percent
22 penetration of households in a geographic area. You'll
23 see later on you could never achieve that business case
24 with any cable technology. They actually break even at
25 about 2 or 3 percent, an they've already achieved that
1 within 8 months in their first coverage areas, so this is
2 the issue of variable rather than fixed cost that Arunas
3 spoke about earlier.
4 Bell Canada is deploying the same technology in
5 a universal service application for four-party relief.
6 It's no longer a trial, it is a commercial deployment,
7 under temporary licenses until Canada finalized their
8 policy for the 3-1/2 gig spectrum, first quarter next
10 Telstra in Australia is doing the same thing,
11 both for rural areas and a second line in ISDN overlays
12 for urban areas.
13 There are major deployments going on in Sri
14 Lanka, Colombia and Bolivia was mentioned earlier, and the
15 next major markets to open up will be Mexico, Brazil, and
16 South Africa, and interestingly enough a number of the
17 operators that we're working with and investors in those
18 markets are U.S.-based investors and operators who are now
19 starting to ask the questions as to why can't they use
20 this stuff at home as well.
21 That was the subject of a paper I presented in
22 Miami about a month ago. Copies are available at the
24 Thank you.
25 So where is all this stuff going? Well, voice
1 is not a major differentiator any more. It used to be,
2 but all voice is pretty good now. In fact, there's a lot
3 of copper-based voices, which is not as good as some of
4 the mobile voice in some areas.
5 Capacity is an issue, how many air lanes or CCS
6 you can carry.
7 Reliability and integrity of the service, call
8 dropouts and so on, these are things that have to be
9 traded off, and the big area for the future is data.
10 Residential Internet access, as I said earlier,
11 the mobile technologies are trying to get from 14.4
12 kilobits up to 1 or 2 megabits over the next few years,
13 and in a few technology jumps, and the wire line industry
14 is currently sitting at around sort of 2 to 5, moving to
15 10 megabits to residential access, so that's the
16 benchmarks for the marketplace.
17 Then you've got the broadband industry sitting
18 on top, which is already capable of achieving tens of
19 megabits to individual premises.
20 Now, the point of this chart here is to show our
21 view of how these technologies are all going to move.
22 We've got the current mobile technologies here with their
23 14.4 heading towards 28.8 kilobit data rates, and fixed
24 versions of those technologies which in our case are in
25 the proximity series, which can do nomadic or fixed
1 applications, and we have our Ionica type systems doing
2 fixed only, which are offering up to basic rate.
3 ISDN, the Tadiran system will be offering ISDN
4 next year. Lucent and DSC and other people have got
5 systems, so our ISDN fractional T-1 is about where those
6 technologies go at the moment.
7 There is the 5 gig NII band which is trying to
8 offer 5 or 10 megabit in building campus-type wireless LAN
9 solutions over the next few years, and the third
10 generation mobile has got this interesting trick of being
11 able to do 64 kilobit when you're moving in a car, or 2
12 megabits if you're standing still. They haven't quite
13 gotten there yet, but that's the way they're heading.
14 And so from our point of view the fixed-only
15 technologies are trying to meet this wire line
16 characteristic here of how to deliver 5 to 10 megabits to
17 homes for Internet-type access, in addition to whatever
18 the mobile technologies will deliver at the below 1 or 2
19 megabit stages.
20 So a simple snapshot of what's actually a very
21 complicated technology and market picture, and some of
22 the -- I've got them mixed up with all the paperwork
24 So we come onto the economics of it, and it's
25 really in two areas. I've got some junk on there. Sorry
1 about that. The picture here basically represents an
2 incumbent's position using copper, where copper loops on
3 average, if you've got lots of them and have been doing it
4 for 100 years you can tell yourself that they cost you
5 about $6 or 700 a loop. They actually cost anywhere from
6 $200 to about $20,000, and wireless is sitting here at the
7 moment somewhere between $500 and $3,000 per loop,
8 depending on the variables. Wireless is coming down,
9 copper is going up.
10 If you're a competitive access provider or you
11 just want to overlay a service like ISDN on an area, then
12 you're never going to attract more than 5, 10, or 20
13 percent of the households, and you will never do it if
14 you're starting with copper. This was the basis for the
15 Ionica business case, and that's the situation at Celex
16 when they're making their technology decisions, which is
17 why up to now they're only addressing business premises
18 delivering T-1's.
19 There was a paper on these economic issues that
20 we submitted to the universal service comments about a
21 month or two back, and now just quickly on the next one, a
22 year ago we did a major workshop with Columbia University.
24 Alex Wolfson is on the next panel, which went through all
25 of the issues of universal service and the role that
1 wireless can play. Again, the paper is available.
2 It does change. Somebody mentioned this
3 earlier. The fundamental basis of providing service in a
4 rural area, and the nature of the subsidies that are
5 needed, you equalize the situation rather than subsidize
6 it forever, and you can offer people in that community
7 multiple services for multiple operators from a single
8 infrastructure, something you can't do very easily with
10 The conclusions of that particular workshop were
11 that the regulators needed to do two things, one was make
12 sure that all of the reviews and redefinitions going on of
13 universal service and so on take proper account of the
14 role of wireless, and not be biased toward cable
16 There has been a lot of progress made there, and
17 latest comments on the universal service reforms are aimed
18 at getting wireless technologies into the cost models that
19 are being used there, and then ensure that spectrum is
20 allocated, and I was pleased to hear Larry refer earlier
21 to the work we're doing with the NTIA and the Department
22 of Defense to see if there's a way to bring the Ionica-
23 type systems into this market for the benefit of Native
24 communities, underserved and competitive communities using
25 what's currently Government spectrum.
1 Thank you very much. There are three or four of
2 us in the room. The contact list is on the back of the
3 charts if you need any more information, and we will go
4 through the panel thing after the next speaker.
5 QUESTION: (inaudible)
6 MR. TRINKWON: Wireless is somewhere between
7 $500 and $3,000 per line. $3,000 would be in a very low
8 density rural area where the cost of the base station is
9 more dominant. You can get down to $200 or $300 with
10 multiline boxes and so on, as the gentleman from Hughes
11 mentioned earlier, but $500 would be a good number.
12 Copper, you can come up with numbers anywhere
13 from $200 to $20,000 depending upon the variables that
14 apply to copper.
15 MR. ALLEN: Thank you, Mr. Trinkwon.
16 Our last-but-not-least speaker today is Gerald
17 Vanderwel. He is the director of services line planning
18 fixed wireless services AT&T wireless services.
19 Gerald is currently a member of the AT&T WS
20 fixed service initiative responsible for service product
21 planning and business development, addressing the emerging
22 needs of mobility, Internet, and high-speed access for the
23 residential consumers and small businesses and AT&T local
24 access initiative.
25 He graduated from college in 1974 and has worked
1 with Bell Canada, Stentor, Microcell and AT&T Wireless,
2 and called upon to do the strategic planning for emerging
3 opportunities. He has extensive system engineering and
4 business development experience in data, integrated voice
5 and data and office automation technologies.
6 He was accountable to Stentor's Infotainment
7 program, and positioned VCI to participate in the
8 entertainment industry, leading to the launch of Canada's
9 Express View digital satellite service, similar to direct
10 TV in the United States, and performed early ADSL trials
11 in campus and consumer trials.
12 He has been involved in t he PCS industry since
13 1992, assisting in the establishment of Canadian PCS
14 policy at 944 MHz and at 1.9 GHz. He has participated in
15 addressing PCS opportunities from a mobile and fixed
16 perspective for Canada's incumbent telephone and PCS
17 cellular companies with significant focus on the threat
18 and opportunity of wireless local loop.
19 Mr. Vanderwel.
20 GERALD VANDERWEL, AT&T
21 MR. VANDERWEL: I would like to spend a few
22 minutes this morning talking about wireless, but I'm going
23 to take a little different perspective.
24 Working in the wireless group of AT&T, which is
25 formerly a part of McCaw Cellular, the largest cellular --
1 I don't really represent Lucent. We have decided that
2 inside AT&T that we needed to bring this project in-house,
3 and we needed to change the way that we think about
5 We have heard a lot of technology push, and I
6 think we need consumer pull. I think the two have to come
7 together in some sort of a time alignment to bring the
8 success that we're all looking for, and I think we're
9 going to have to change the way we think about wireless.
10 These are changing times. We are seeing
11 tremendous pressure on copper to deliver higher speed
12 Internet services, and as a competitive service provider
13 you have to determine whether or not you can play. The
14 decision is no longer simply going to be one of plain old
15 telephone service, but I think the contemporary household
16 leading to the information highway is going to expect an
17 awful lot, and the solution we're working on today are
18 really solutions that need to take us to tomorrow.
19 As a result, we formed an interesting team. We
20 have 200-plus scientists and other specialists that I work
21 with quite extensively bringing concepts -- we do a lot of
22 evaluation of competitive technologies. We've made a
23 determination that the technologies that exist today don't
24 offer the type of spectral efficiency that is needed to
25 deliver in this kind of a marketplace.
1 When you look at air line load and you talk
2 about the average consumer, you're talking about 1,400
3 minutes of traffic, on average, per household. If you
4 look at the density of households that we're covering
5 you're looking at 1,000 households, typically, per square
6 kilometer. That typically represents a reasonable
7 suburban mix, and if you look at that air line load and
8 you combine it with data loads and everything else, you
9 understand that the challenges we're all facing, we as a
10 service provider are all facing, is to deliver a platform
11 that has the capability to address what's being asked of
13 So we've gone out and tried to acquire the best
14 scientists from wherever we could, and we've picked them
15 up from all over the world. We have established a leading
16 edge design and manufacturing facility in Redmond. We
17 have broken ground. The lines are being put in, power is
18 being put in, and the assembly equipment is being
19 positioned to allow us to start running product.
20 We're doing this because one of the things that
21 we expect to learn as we move forward is, we need to have
22 very rapid ability to change our designs as we move
23 forward and as we learn. We have state-of-the-art testing
24 facilities in place. We have in an installation test bed.
1 A lot of this is going to be tied in to how effectively we
2 can install in a consumer's premises.
3 This is not just a piece of technology. You
4 could in many cases argue that you may be able to position
5 it. I think when you look at what we're trying to
6 accomplish, we're trying to be better or equal to copper.
7 Copper set some very, very tough matrix that we need to
8 meet, and radio needs to deal with them as effectively,
9 and so we have done that, plus we have a Nation-wide
10 implementation team with AT&T. We have called upon a lot
11 of subject matter experts to assist us.
12 So what are we really trying to deliver? First
13 of all, we're trying to deliver high quality digital
14 telephony. We've listened to it. I don't want to be as
15 bold to say it sounds CD-like, but it has a certain
16 clarity that you don't get on copper. At the same time,
17 trying to achieve that in an implementation, in a city
18 like Seattle, presents some formidable challenges.
19 We are constrained by link budgets. We are
20 constrained by physical heights of towers, aesthetics. We
21 have RF phenomenon we need to deal with, and at the same
22 time we do have consumers that expect this to be equal to
23 copper. They will not tolerate dropouts of more than 50
24 calls in 1 million call attempts. That's the wire line
25 model. In fact, one would argue it's even better than
1 that, and the RF models that we're going to provide are
2 going to have to be equal to that, so we set that as our
3 benchmark, and our objective is to meet those metrics and
4 exceed them.
5 Additional phone lines without delay. This is a
6 computer on the side of the house. This is a smart box.
7 We want to make it smart enough so that we can do most of
8 our work over the air, downline load capability into the
9 consumer, and enable without additional dispatches, and
10 there are obvious reasons from a business point of view
11 why we'd want to do that.
12 I'd like to spend a few minutes talking about
13 Internet access. Currently we're capped at 56 on copper.
14 People talk about XDSL taking us higher. We're looking at
15 256 as kind of the stake in the ground that we think we
16 need to deliver over this particular service to support
17 our customer base, and we're looking further at the
19 The phenomenon or concept of PCS is an
20 interesting one, and we all imagine ourselves walking
21 seamlessly between these networks, and we do believe it's
22 a network of networks. We do believe, if we look at the
23 spectral efficiency of GSM and other systems, that we
24 don't have the capacity in those systems to support all of
25 these services we're looking for, and so we do believe
1 this will be a tiered approach.
2 When you talk about tiered architectures,
3 obviously the complexity goes up as you try to manage
4 calls in progress and pass them off back-and-forth between
5 systems, so we are looking at integration between our
6 services and we see this potential video capability.
7 Some people talk about real time. Security
8 cameras is potentially another application. This is
9 probably going to be longer term capability as we learn
10 how to do more sophisticated compression and encoding on
11 the air link to improve the Internet access performance.
12 One of the more formidable challenges we're all
13 going to be faced with is interfacing to the consumer.
14 This is a very simple drawing of a very complex product.
15 Line of sight, as you saw in one of the
16 speaker's diagrams, suggests that there are little
17 pinpoints on some houses, a rooftop, a chimney, et cetera.
19 We are avoiding a line-of-site implementation. We are
20 going to be mounted on the side of the home. We're going
21 to be compatible with inside wiring.
22 We're not suggesting that we rewire the home.
23 We are working towards plug-and-play architectures, and as
24 you see here, we do believe in a very short period of time
25 that we will have some sort of integration capability
1 inside the home.
2 Now, we all want to do that over the existing
3 twisted copper, and we want that air link to deliver a
4 number of services. Internet, traditional telephony, fax
5 support, and high-speed modem support in an analogue
6 portion as well as digital PCS.
7 One of the interesting things about radio and
8 the fact that when you start digitizing this bit stream
9 leaving the home is that you can intercept it and you can
10 intercept it in the network, and when you intercept it in
11 the network you can divert it, so for the first time we
12 see ourselves offering the equivalent of a dedicated
13 digital network to our consumers.
14 We're not thinking of taking Internet service
15 through switched architectures. We're thinking of taking
16 Internet services through dedicated customized backbone
17 architectures, picking up at our base station, feeding it
18 into new services platforms that we're currently
19 developing and offering a full-time connected data service
20 to the home, packet-based.
21 Now, just to give you some idea of where we are
22 right now, back in the early part of this year we said we
23 would do it. We have done it. We targeted December 2 as
24 our lab in Chicago. We did go live in Chicago. We did
25 install a base station. We did bring all of the
1 electronics that we produced together. They were
2 operational. We managed to establish calls, RU-to-RU or
4 The calls fundamentally sounded great. They
5 weren't perfect. We still had many issues to deal with,
6 obviously, because of the way -- the state of this
7 development, this early prototype work, but for the people
8 that experienced it, the homeowners, ex-AT&T employees
9 that were part of this trial, the feedback we got was that
10 it was a new experience, and we will continue to build on
11 what we learned.
12 We're not stopping right now. There's going to
13 be a lot of competitive alternatives in wireless. We're
14 evaluating how well we stack up against the products that
15 other people are putting together, and as we learn more,
16 we and our engineering team determine whether or not and
17 when we can develop this product in its next iteration.
18 We are currently at the first release, and we do
19 expect it will involve releases year after year.
20 What drives us to do this? First, we need to
21 break the local bottleneck. AT&T has significant long
22 distance business that it wishes to protect. We
23 understand with the new legislation that people are going
24 to be highly competitive. We're going to see a lot of
25 bundling of local service, mobility services, long
1 distance services.
2 The current options available to us, and we have
3 tried them, have been difficult in some cases. We think
4 the industry needs a strong competitive push, and we're
5 going to position for a strong competitive push, and I
6 think history has taught us one thing. We think it's a
7 lot more than 1 million customers. We think we can
8 deliver a service that is going to meet consumers'
10 I think it's very important, though, that we're
11 looking at services that are differentiating. We're not
12 looking at strictly POTS service. We believe the
13 contemporary home, to win the contemporary customer is
14 going to take some work. We think this is kind of where
15 it starts.
16 We think that as we're learning and as we
17 miniaturize and as we reduce cost and as volumes go up,
18 life will change and cost will come down, and deployment
19 business cases will change as well, and fundamentally what
20 we're doing is building today for the networks of the
22 Thank you.
24 MR. ALLEN: I would like to thank all of our
25 speakers one more time.
2 MR. ALLEN: And we are interested in receiving
3 any questions that you may have.
4 VOICE: As I understand it, most of the
5 discussion was focused on terrestrial systems, but if we
6 think of a local loop as a last mile and dial tone, LIO
7 and MIO systems, do you see a future here, and if not, why
9 DR. SLEKYS: I will address that, but there will
10 be some people here from Teledesic later on who may want
11 to address that. Certainly we see an opportunity there,
12 and companies like Iridium already off and running with
13 their local service globally.
14 The issue is that capacity density, traffic
15 density in the context of voice, in a city and so forth,
16 and data services. I think the terrestrial systems are
17 still going to win out on the economic side, and for
18 satellite to compete with that, it's not really -- it's
19 not its turf.
20 I think we see satellite delivery through LIO's
21 and MIO structures certainly as proven. With business
22 plans that are being funded, Iridium, Global Star and
23 others, there will be an opportunity, and there's a global
24 roaming market of some number. I don't know what that is
25 yet, but clearly there is some global roaming market.
1 The new generation mobile networks, the 2 G that
2 was put up there that's coming to fruition sometime in
3 2000-plus, David, I guess, will seek to address that as
4 well from the terrestrial side, so even that will be
5 tackled by terrestrial wireless, and certainly with the
6 numbers you saw up there, 200 million and growing at the
7 rate we're growing, I think satellite fundamentally should
8 stick to broadband data services.
9 VOICE: In regard to the current ongoing NPRM,
10 regarding the two-way broadband services using MMDS
11 licenses, I would like to get a little more information in
12 terms of the interference issues that I think Dr. Krauss
13 had brought up and also maybe from whoever in the panel
14 would like to help us with a better understanding of what
15 are the current technologies in terms of air link that is
16 being considered suitable for MMDS.
17 DR. KRAUSS: Well, let me take the first part of
18 that, at least the question of interference. The MMDS
19 service today has serious interference issues, because
20 even though it's all one-way video distribution the
21 channel plan, the FCC's channel plan and the way the
22 channels are assigned, they're not contiguous in
23 assignment to a particular licensee.
24 It's not four channels continuous, but it's four
25 channels every other channel, and that means that if you
1 have these four channels -- and I won't use my fingers
2 because the people that are recording this won't be able
3 to get that.
4 If you're assigned channels A-1 through A-4, and
5 somebody else is assigned channels B-1 through B-4, they
6 are interleaved, and if you don't operate at the same
7 transmission location then a particular receive location
8 might be getting interference, adjacent channel
9 interference in his TV set because of the near-far
10 problem, the fact that he might be a lot closer to the
11 unwanted transmitter than to the wanted transmitter.
12 So let's say that now we go to an environment
13 where some of these MMDS channels are used for two-way
14 operations. You have an even more serious problem with
15 the near-far problem, or near-far interference, because
16 the two-way operations are going to be much lower power
17 than the one-way broadcast.
18 And unless you can convince everybody, or almost
19 everybody in the market area to convert from high power to
20 lower power, if your receiver if your subscriber station
21 is too close to a high-powered transmitter he's going to
22 get adjacent channel interference, and there are a
23 substantial number of licensees who are likely to continue
24 to want to use these frequencies for one-way video
25 distribution, because these are educational institutions
1 that are using it for educational lectures.
2 So unless it's going to be possible to
3 coordinate all of the users in a particular geographic
4 area, I foresee practical problems if this does go to two-
6 MR. ALLEN: If anyone else would like to ask a
7 question, if you would come up to the microphone, then we
8 could take you in order that way.
9 QUESTION: Could you address the second part of
10 my question?
11 MR. TRINKMON: We have been watching, but we
12 have not seen anything emerge yet. And we do not see a
13 solution apart from the power interference problems that
14 Jeffrey just mentioned. The fact that nobody has
15 contiguous spectrum means it is very difficult to
16 construct a series of air interfaces that you could deploy
17 for any voice or data service, even if you did not have
18 the high power problem. If you have to live within the 6
19 meg boundaries in some applications, even though some
20 licensees might be able to put two or three together. It
21 makes it very difficult to figure out an architecture and
22 a system that you could sell and get volume out of.
23 The major obstacle we have seen is that the
24 starting point of most business cases assumes that they
25 can reuse their very high towers on the biggest hill
1 around, which is the way you do broadcast. And when you
2 look at the coverage plans that you would need to do a
3 two-way service, that is probably the last place you would
4 choose to put your towers.
5 So this whole idea that they have got a cheap
6 ride already, they have basically got to pull it all down
7 and start again. So those are the factors, I think, that
8 are stopping this from moving on. But that does not stop
9 a lot of people from trying to find the answer. Which is
10 great. And we are watching. But we have not seen one pop
11 up yet.
12 MR. NELSON: I am Mike Nelson with the FCC. And
13 I had a question for Mr. Vanderwel.
14 I was wondering if you could give us a few more
15 details of your Chicago trial, and tell us a bit more
16 about how many people were involved, what kind of services
17 they were signing up for, what some of the bugs were. And
18 I would also like to hear a bit more about some of the
19 regulatory barriers that you anticipate that you might
20 have to deal with as you roll out the service.
21 MR. VANDERWEL: Maybe the latter point I am not
22 probably as qualified as some others in our organization
23 to deal with the regulatory issues, but I would like to
24 address the former, if I may.
25 Chicago is a significant accomplishment for this
1 particular team, because it required proof of concept of
2 many of the technologies that we have been building. We
3 are, obviously, from a base station, from a fixed
4 perspective, trying to emulate many of what you would call
5 I suppose traditional telephony building blocks, to allow
6 a high degree of compatibility with switching
7 infrastructures that exist, to allow cost-effective
8 deployment. And so much of the testing was to demonstrate
9 that our prototype products were in fact operational.
10 The second part of the test was to prove that
11 the air link concepts that we were working on were also
12 doable. And therefore, what we did, we utilized one of
13 our towers in Chicago, our mobility towers, we collocated
14 on that tower. We located residences -- I think the
15 furthest residence was 1.9 kilometers away from the tower.
17 We populated all homes. There were a total of nine
18 participants in a distributed area. We populated their
19 homes with this technology. You saw in the last slide the
20 square pizza box.
21 We gave them telephony service, traditional
22 telephony service. We did not have the data architecture
23 in place. And as I mentioned earlier, that basically ends
24 up being diverted to a separate network, which is in the
25 process of being developed and built.
1 But we did demonstrate analog circuit switch
2 data capability over the system. And we did allow people
3 to make any number of call combinations, including
4 house-to-house calls.
5 When we tested the thing, obviously we had
6 prototype problems in the boards because of the state of
7 the technology as it was being supported. But when it was
8 stable, it was very, very clean communications. The air
9 links performed as we expected. We were stress tested by
10 weather. It was snowing and cold. RU's were installed in
11 the middle of that. Testing was done to make sure that we
12 had correct signal strength and that customers would be
13 happy. And we noticed no degradation because of snow or
14 ice or any other situations.
15 MR. NELSON: How fast were the applications?
16 MR. VANDERWEL: The data applications were
17 circuit switched. They would be constrained to what
18 people could do with a portable PC at 2833. Obviously we
19 need to go much higher than that. But that is part of a
20 specialized data network that is being built as a
21 companion piece to this particular architecture.
22 DR. KRAUSS: Let me put in a plug for regulatory
23 barriers -- the question that you asked. I think that it
24 is time for the FCC to go back and take another look at
25 the computer inquiry rules and regulation of customer
1 premises equipment. We are talking here about different
2 regulatory schemes that apply to different kinds of
3 service providers for equipment that is located at or on
4 or near the customer premises.
5 And this is not only for radio based, for
6 wireless technology that we are talking about, but also
7 for a telephone company that wants to put in fiber to the
8 home or co-ax to the home or anything like that requires
9 what you might call a residential gateway or some kind of
10 a terminal in the home that is more complex than just an
11 RJ-11 jack.
12 QUESTION: Is there any place to go for more
13 details on the Chicago trial? Is there any Web site?
14 MR. VANDERWEL: We do have a Web site. I could
15 get that maybe for you at the conclusion of the session.
16 You could always contact me. I would be pleased to
17 provide you with more information.
18 QUESTION: Thank you.
19 QUESTION: I guess this is directed toward all
20 of you. I am curious that, given the continuing need for
21 wire line services in terms of a loop, OC-3's and OC-12's,
22 for those that continue to be wire line, do you really
23 feel that wireless can develop to be a true wireless local
24 loop, or is it more of a less-mile solution, as the cliche
1 MR. VANDERWEL: If I could try to take it. We
2 see it as a last-mile solution. The solutions that we
3 have proposed here have been that. However, we see a lot
4 or emerging technologies. LMDS may be one where we are
5 going to see significant capacity capability. And so we
6 are looking at all of the emerging technology. And we do
7 expect that some of them will become more appropriate.
8 Our current architecture leverages much of what
9 is there. We just take it from the last serving office
10 and take it to the customer in a different implementation
11 than people are used to.
12 DR. SLEKYS: I think your question really is:
13 Does wireless impact broad band and high bandwidth
15 I guess I am not sure everyone knows the buzz
16 words, but you are talking about data rates that are
17 multiples of T-1 rates, and multiples of E-1 rates in
18 European norms and so forth. And I think the answer is
19 yes, wireless is going to impact that and already is.
20 Technologies are coming out that have bit error rate
21 performance of 10-to-the-minus-9. And other than this
22 issue of weather, which does have a deleterious effect --
23 and in particular, rain -- but that can be solved as well
24 with proper planning.
25 So I think that the impact is clear. It is
1 happening. The economics of wireless have the advantage
2 over fiber in the context of delivery on demand.
3 The European ETSI norm, 1.75 megahertz at a
4 time, 2 and a half bits per second per hertz, yields a
5 couple of E-1's on every link. And you can just keep
6 going. And they basically view that as a standard that
7 can be applied at any of these allocations, 28, 38, and so
9 MR. TRINKMON: If I could comment, on a couple
10 of things. We are not comfortable with this last-mile
11 phrase, because in the economics of deployment,
12 particularly for universal service and so on, it is the
13 last 10 or 15 miles. And it completely changes where you
14 put your switches and all your backhaul costs. And that
15 is a big factor in it. So you need to be aware that some
16 technologies are limited to the last mile, but others are
18 And in the broad band case, I have not found too
19 many people putting OC-48's to the residential yet.
21 MR. TRINKMON: Or even fiber to the home. As I
22 mentioned earlier, there are economic problems. And the
23 same applies with the wireless technologies. The higher
24 frequencies that go with the very high bandwidth require
25 you to go pure line of sight, limited link budgets and so
1 on. So they are not really deployable to individual
2 residential premises. But to business parks or apartment
3 buildings and stuff it is fine. So it is horses for
4 courses again. And the goal posts keep on moving. But
5 there are some limits. Ohm's Law still applies somewhat.
6 QUESTION: I would like to extend that point in
7 the form of a question regarding what you had just
8 mentioned, David, and what Jeff had mentioned also. We
9 are clearly a technology-driven industry here. But, on
10 the other hand, when we keep looking at the investment and
11 operating cost, my question is, to what extent do we
12 consider the interactive nature of the current regulatory
13 environment and the pricing structure that is associated
14 with, for example, flat-rate ISP usage and things like
16 And how does that dictate, if it does at all,
17 any kind of emphasis in terms of frequency spectrum
18 utilization and emphasis on technical design, excepting
19 the asymmetry, if you want to call it that, of the
20 regulatory policies that are in being and may continue
22 DR. KRAUSS: Well, this is, as you say,
23 interactive. It is an interactive process. A
24 manufacturer comes up with an idea for using radio
25 spectrum in a particular way and tries to get spectrum
1 available to use it. That, I guess, is what is going on
2 with Nortel's product right now.
3 So some manufacturers will take the lead and do
4 the technology development and then go to the government.
5 Others will look at the technical rules that are in the
6 FCC regulations and the spectrum allocations that are in
7 the FCC regulations and they will design products that
8 confirm to the existing regulations. And there is -- you
9 know, this is not a simple -- this is a very complex
10 situation. Different manufacturers have different
11 incentives. There are some manufacturers who will try to
12 drive -- who are perfectly happy with existing standards
13 and will try to evolve their products to improve the
14 performance and decrease the cost within the existing
16 There are others who will say, I can do a lot
17 better if you will change the standards for me. And this
18 is simply a process that goes on over time.
19 QUESTION: Excuse me, I just want to clarify. I
20 am not talking about the technical standards alone. I am
21 talking about the financial and regulatory rate design
22 standards, access charges, interconnection, unbundling,
23 the asymmetry of the treatment of the different service
24 providers. To what extent does that dictate, if at all,
25 any change or emphasis in the technical design criteria in
1 the process of design?
2 MR. TRINKMON: Yes, you have touched on some
3 very key points. Obviously, manufacturers do not just
4 invent stuff for the hell of it. We try and figure out
5 who is going to buy it and use it and what for and how
6 many and so on. And it actually is a key area at the
7 moment in the segment I talked about, on the fixed mobile
8 integration. One of the biggest factors holding back the
9 mobile industry at the moment from going into fixed
10 services is how to compete with free local calls and so
11 on. Which happens to be the way tariffs are set up in
12 this country.
13 That itself has spawned a huge paging industry.
14 The called party pays philosophy. All these things are
15 all linked together and limit what people can choose to
16 operate and deploy, and therefore what people develop to
17 meet those services.
18 On the sort of implied part of your question, in
19 terms of the different types of spectrum and the value of
20 them, we are seeing the example in the Mexican auctions at
21 the moment, where the two PCS A and B bands -- I have not
22 kept up with the latest numbers, but I think they are
23 adding up to a couple of hundred million or something --
24 300 at the moment -- and the 3 and a half gig fixed
25 wireless block, three-four to three-six, is sitting at I
1 guess about 50 million or somewhere around there.
2 Which confirms what we have always known, but it
3 needed confirming: That not all spectrum is equal. There
4 is not a so many dollars per megahertz number out there.
5 And it depends on the value of the applications. And if
6 the service is a wire line fixed service competing with a
7 copper technology or nothing at all -- you know, you just
8 go without dial tone for another 50 years -- then that
9 puts a constraint on what the spectrum is worth.
10 So I think some of that was buried in your
11 question as well, in terms of the interplay between the
12 way regulations are set out and the way spectrum is
13 managed and allocated and licensed, as well as what the
14 various technologies can and cannot do -- which changes --
15 and what various people see as an attractive business
16 case, or not. What business do they want to be in?
17 So you can obviously take a lot longer to go
18 over this stuff. But I think those are the main elements
19 I picked out of your question.
20 DR. SLEKYS: Perhaps the most provocative
21 conclusion of that whole dialogue would be, Why do we need
22 any rate control?
23 DR. KRAUSS: But there is also a related issue.
24 And that has to do with spectrum and spectrum allocation
25 and whether spectrum is free or not and the cost of
1 coordination. It would be wonderful if there were an
2 infinite amount of spectrum and everybody could do
3 whatever they wanted with it. That would mean that you
4 could buy relatively inexpensive equipment that makes
5 relatively inefficient use of the spectrum. That would
6 drive down the cost of the equipment and drive down the
7 cost of the service, and totally, totally revolutionize
8 the way the telephone industry operates.
9 But that is not the case. And so we live within
10 the constraints that spectrum is a limited resource and we
11 will always have that constraint.
12 MR. ALLEN: I was hoping to get one last
13 question in. And that is that I think some PCS service
14 providers are advertising that they have home
15 communication available, as well, where they do not charge
16 you, or something, for the air time when you are in your
17 home. But going beyond cellular and PCS offerings, when
18 do you envision a person living in a typical metropolitan
19 area in the United States expecting to be able to have a
20 choice and at least one wireless local loop service being
21 offered? How many years from now do you expect that to
23 MR. TRINKMON: I think it comes back to what is
24 the service. Many people would think they are getting
25 that at the moment from their cellular or PCS phones, and
1 the only issue is how much they have got to pay for it.
2 Is it 50 bucks a month, all you can eat, or is it 10 cents
3 a minute or whatever? And that is the tariff issue I
4 referred to earlier.
5 There are examples now, in Israel and Denmark
6 particularly I can think of, where the mobile rates have
7 come close enough -- not equal to, but close enough to the
8 fixed rates, but that is on a per-minute basis -- that
9 people are giving up their wire lines now and just using
10 their mobile service. So these are tariffing and bundling
11 issues, which is particularly difficult to solve in the
12 U.S. and Canada, with the free local call tariffs on the
13 fixed service.
14 So that is a hurdle which people have not quite
15 managed to jump yet. One or two operators have tried it
16 and then suddenly attracted more capacity than they could
17 deal with. So they sort of backed off for a little while
18 until they figure out the next combination that works.
19 MS. BROWN: Well, I want to thank this first
20 panel. Are there any last comments from anyone?
21 DR. SLEKYS: I was going to add to what David
22 says. It is happening now. Most of the business plans we
23 look at for PCS investment all have all you can eat plans
24 at some point. And the key will be their bundling of
25 that, with not just their mobile, but then with other
1 services. Because they are all hungry to do direct to
2 home video and anything else they can get their hands on
3 as service providers.
4 So I think that the wireless world, which is
5 looking at a 50 percent penetration in the next 5 years,
6 will have flat rate and mobile combined in a way that it
7 will be questionable whether you will want to keep your
8 land line phone.
9 MS. BROWN: We may just hold you to that.
11 MS. BROWN: So, on that note -- and I think we
12 will press this issue throughout the day -- and when we
13 get back to the next panel, which will really center
14 around this notion of universal service, perhaps we can
15 take that question up some more.
16 I really want to thank this first panel. I
17 think you have laid a very good, solid foundation for the
18 discussions for the rest of the day.
19 There are refreshments around the corner. We
20 will resume back at 11:15.
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