Number portability
In the 1990s, the FCC mandated that the wireless phone industry must implement a number portability system. Historically speaking, cellular phone numbers have not been portable. If a user changes from Bell Atlantic Mobile to Sprint PCS, she has to get a new phone number. The old number is recycled by Bell Atlantic Mobile and Sprint PCS assigns the user a new number.
This process is so frustrating that most customers simply stay with the current carrier, rather than experience the “pain of change” to a new carrier. Getting a new phone number may require a business user to print new business cards and new letterhead, and the user must inform his clients of the new number. Few people are willing to go through this headache just to save a few dollars each month.
Third-generation technology
Telecom suppliers worry about the capacity of their networks. If the network is maxed out, they cannot enroll new customers, and existing customers switch to different carriers. New technologies are implemented to increase network capacity and allow carriers to offer more sophisticated services to their customers. The next significant wireless telecommunications technology is referred to as “the third generation.”
Three 3G technologies have been developed, but none has yet been deployed. The three technologies are WCDMA, CDMA2000, and TD-SCDMA, developed by Americans, Europeans, and Chinese, respectively. Governments, telecom manufacturers, carriers, and other power brokers are still deciding which technology to deploy. 3G is often in the news because of the high-level negotiations deciding the future of the wireless industry, but until it is deployed, 3G is not very relevant for the end user.
WAP
WAP allows mobile telephone users to send and receive electronic data. WAP has been heavily marketed by carriers, but the service has had a rocky start. The service had many technical glitches, and the technology’s early adopters lost their enthusiasm. WAP’s biggest drawback is that it is not user friendly. Data input is inconvenient, and most customers cannot tolerate the tiny display screen.
Digital cellular service : PCS & Low Earth-Orbiting Satellites
Digital cellular service
In the late 1990s, carriers began migrating their customers from analog service to digital cellular service. Digital cellular allows carriers to increase privacy, reduce cloning fraud, and increase capacity by 3 to 10 times. Digital cellular signals are multiplexed and scrambled, making it more difficult for eavesdroppers to listen in to a conversation. Digital service also includes more features such as caller ID, call waiting, repeat dialing, and call return. A carrier that upgrades from analog to digital technology can offer better service to more customers.
PCS
In the early 1990s, the FCC auctioned off six more bands of the airwaves to be used for personal communications service (PCS). The auction was controversial and the stakes were high. Many people complained that the government had no right to collect money by “selling” the airwaves. The bids at the auction were much higher than predicted and the government was surprised at how much money it raised. The auction of the A, B, and C blocks netted the U.S. Treasury $17.9 billion. In the Washington/Baltimore market alone, AT&T Wireless paid $211,771,000 just for the right to broadcast phone calls. Some of the entrepreneurs who got the bids eventually defaulted on the payments. Consequently, PCS service was not rolled out as quickly as planned.
PCS service uses digital technology and is rich with features. PCS also uses less complex pricing and billing schemes than traditional cellular service. Because of these advantages, wireless carriers and customers alike are making the shift from analog wireless services to PCS.
Low Earth-Orbiting Satellites
Low earth-orbiting satellites (LEOS) provide wireless telephone service for users across the globe. The handheld phone transmits and receives signals to and from geosynchronous satellites. Once enough satellites are launched into space, a caller should be able to make and receive calls anywhere across the globe. This revolutionary technology will allow people everywhere to make voice calls, transmit data, or connect to the Internet from anywhere. The concept is especially attractive in isolated places such as the Andes Mountains, where the telecommunications infrastructure is significantly underdeveloped.
LEOS technology has many glitches, however. During the recent war in Kosovo, telephone lines were severely damaged. News correspondents brought in satellite phones to call the outside world. In spite of the hefty $2,000 to $3,000 price tag, these phones rarely worked properly, especially when used indoors.
Probably the biggest problem facing rapid LEOS deployment is the high cost of building the network. In 1998, the Iridium Company, daughter company of Motorola, first offered global wireless telephone service. Iridium spent more than $5 billion building its 66-satellite constellation that would provide coverage throughout the world. But in its first 2 years, the company enrolled only 10,000 customers. A small customer base means small revenue, and in 2000, Iriduim filed for bankruptcy. What began as a dynamic cutting-edge high-tech company quickly died as the result of financial problems. Even its major supporter, Motorola, refused to bail the company out. Iridium is now back in business, but it mainly targets commercial users in remote parts of the world, such as off-shore locations.
In the late 1990s, carriers began migrating their customers from analog service to digital cellular service. Digital cellular allows carriers to increase privacy, reduce cloning fraud, and increase capacity by 3 to 10 times. Digital cellular signals are multiplexed and scrambled, making it more difficult for eavesdroppers to listen in to a conversation. Digital service also includes more features such as caller ID, call waiting, repeat dialing, and call return. A carrier that upgrades from analog to digital technology can offer better service to more customers.
PCS
In the early 1990s, the FCC auctioned off six more bands of the airwaves to be used for personal communications service (PCS). The auction was controversial and the stakes were high. Many people complained that the government had no right to collect money by “selling” the airwaves. The bids at the auction were much higher than predicted and the government was surprised at how much money it raised. The auction of the A, B, and C blocks netted the U.S. Treasury $17.9 billion. In the Washington/Baltimore market alone, AT&T Wireless paid $211,771,000 just for the right to broadcast phone calls. Some of the entrepreneurs who got the bids eventually defaulted on the payments. Consequently, PCS service was not rolled out as quickly as planned.
PCS service uses digital technology and is rich with features. PCS also uses less complex pricing and billing schemes than traditional cellular service. Because of these advantages, wireless carriers and customers alike are making the shift from analog wireless services to PCS.
Low Earth-Orbiting Satellites
Low earth-orbiting satellites (LEOS) provide wireless telephone service for users across the globe. The handheld phone transmits and receives signals to and from geosynchronous satellites. Once enough satellites are launched into space, a caller should be able to make and receive calls anywhere across the globe. This revolutionary technology will allow people everywhere to make voice calls, transmit data, or connect to the Internet from anywhere. The concept is especially attractive in isolated places such as the Andes Mountains, where the telecommunications infrastructure is significantly underdeveloped.
LEOS technology has many glitches, however. During the recent war in Kosovo, telephone lines were severely damaged. News correspondents brought in satellite phones to call the outside world. In spite of the hefty $2,000 to $3,000 price tag, these phones rarely worked properly, especially when used indoors.
Probably the biggest problem facing rapid LEOS deployment is the high cost of building the network. In 1998, the Iridium Company, daughter company of Motorola, first offered global wireless telephone service. Iridium spent more than $5 billion building its 66-satellite constellation that would provide coverage throughout the world. But in its first 2 years, the company enrolled only 10,000 customers. A small customer base means small revenue, and in 2000, Iriduim filed for bankruptcy. What began as a dynamic cutting-edge high-tech company quickly died as the result of financial problems. Even its major supporter, Motorola, refused to bail the company out. Iridium is now back in business, but it mainly targets commercial users in remote parts of the world, such as off-shore locations.
Cellular service
Cellular service
Cellular telephone service has more capacity than the previous mobile telephone service because it divides an area into hexagonal shaped cells. Each cell uses different frequencies from the adjacent cells. The limited number of frequencies could be recycled in other cells, which allowed more simultaneous calls. Cellular telephone service is an analog technology. Figure 1 illustrates the different cells in an area.
Figure 1: Cell map.
In the early 1980s, the FCC divided the country into 734 distinct cellular service markets. In each market, the FCC divided the available airwaves into an A-block and a B-block. Two cellular service providers would operate in each market. The A-side carrier was usually an independent company such as Cellular One, while the B-side carrier was operated by the local telephone company, such as BellSouth Mobility. Even today, there are only two providers of cellular service in each market. But in most markets, both the A-side and B-side carriers allow other companies to resell their service, which results in more vendor choices for the customer. In the Midwest, Ameritech Cellular resold GTE’s service until it built its own digital network. Most consumers are unaware that cellular companies may share the same network with their competitors.
For example, a construction supervisor who worked in a low valley was disappointed with his carrier, GTE. His work area was obscured by hills that prevented the cell phone from receiving the signal from the radio tower. He was, in effect, in a “dead zone,” which is an area that cannot receive the signal from the tower due to an obstruction, such as a hill (see Figure 2). The construction supervisor switched to Ameritech Cellular but was disappointed because his phone still did not work in the valley. He switched companies, purchased a new phone, and changed phone numbers, but his coverage was exactly the same because the new carrier used the same network as the old carrier.
Figure 2: Dead zone.
When traditional analog cellular service became popular, cellular providers needed to increase the capacity of their networks. Initially, they just divided the cells into smaller cells, which allowed them to carry more calls but also resulted in more dropped calls, especially near cell boundaries. Cellular customers can be fickle and will quickly change carriers if they have trouble making calls.
Customers were also disappointed with the insecurity of cellular networks. Using analog scanners, eavesdroppers can easily listen to a cellular phone conversation. The most famous case involving this was when an elderly couple listened in to Congressman Newt Gingrich’s cellular calls.
Even more disappointing for the cellular customer is the practice of cloning, when perpetrators clone a cellular telephone by learning its electronic serial number (ESN). This ESN is then reprogrammed into another handset, and the perpetrator makes unlimited calls on this phone. No one will find out until the charges for these calls show up on the innocent customer’s bill. The lack of security with analog cellular service drove many customers to switch to digital cellular service.
Cellular telephone service has more capacity than the previous mobile telephone service because it divides an area into hexagonal shaped cells. Each cell uses different frequencies from the adjacent cells. The limited number of frequencies could be recycled in other cells, which allowed more simultaneous calls. Cellular telephone service is an analog technology. Figure 1 illustrates the different cells in an area.
In the early 1980s, the FCC divided the country into 734 distinct cellular service markets. In each market, the FCC divided the available airwaves into an A-block and a B-block. Two cellular service providers would operate in each market. The A-side carrier was usually an independent company such as Cellular One, while the B-side carrier was operated by the local telephone company, such as BellSouth Mobility. Even today, there are only two providers of cellular service in each market. But in most markets, both the A-side and B-side carriers allow other companies to resell their service, which results in more vendor choices for the customer. In the Midwest, Ameritech Cellular resold GTE’s service until it built its own digital network. Most consumers are unaware that cellular companies may share the same network with their competitors.
For example, a construction supervisor who worked in a low valley was disappointed with his carrier, GTE. His work area was obscured by hills that prevented the cell phone from receiving the signal from the radio tower. He was, in effect, in a “dead zone,” which is an area that cannot receive the signal from the tower due to an obstruction, such as a hill (see Figure 2). The construction supervisor switched to Ameritech Cellular but was disappointed because his phone still did not work in the valley. He switched companies, purchased a new phone, and changed phone numbers, but his coverage was exactly the same because the new carrier used the same network as the old carrier.
When traditional analog cellular service became popular, cellular providers needed to increase the capacity of their networks. Initially, they just divided the cells into smaller cells, which allowed them to carry more calls but also resulted in more dropped calls, especially near cell boundaries. Cellular customers can be fickle and will quickly change carriers if they have trouble making calls.
Customers were also disappointed with the insecurity of cellular networks. Using analog scanners, eavesdroppers can easily listen to a cellular phone conversation. The most famous case involving this was when an elderly couple listened in to Congressman Newt Gingrich’s cellular calls.
Even more disappointing for the cellular customer is the practice of cloning, when perpetrators clone a cellular telephone by learning its electronic serial number (ESN). This ESN is then reprogrammed into another handset, and the perpetrator makes unlimited calls on this phone. No one will find out until the charges for these calls show up on the innocent customer’s bill. The lack of security with analog cellular service drove many customers to switch to digital cellular service.
Mobile radio and mobile telephones
Mobile radio and mobile telephones
Two-way mobile radio communication was first used around the time of World War I. Mobile radio is still used today across the globe by taxicab companies, police departments, fire departments, trucking companies, and marine operations. Mobile radio users only communicate with each other; they cannot connect to the public-switched telephone network. Users take turns speaking because the system only allows for one-way communication. But the price of wireless telephone service is dropping and, in most cases, it is now cost effective for a company to replace its mobile radios with cellular phones.
Mobile telephones were developed because people wanted to call from their cars to normal landline phones. The first mobile phones were very expensive, and each city could only handle a small number of simultaneous phone calls. One of the first mobile phone systems, in St. Louis, could not even accommodate 100 simultaneous calls. Mobile telephones were given their own frequency band by the FCC, and this small portion of the airwaves would only accommodate a small number of users. Cellular telephone service changed all of this.
Two-way mobile radio communication was first used around the time of World War I. Mobile radio is still used today across the globe by taxicab companies, police departments, fire departments, trucking companies, and marine operations. Mobile radio users only communicate with each other; they cannot connect to the public-switched telephone network. Users take turns speaking because the system only allows for one-way communication. But the price of wireless telephone service is dropping and, in most cases, it is now cost effective for a company to replace its mobile radios with cellular phones.
Mobile telephones were developed because people wanted to call from their cars to normal landline phones. The first mobile phones were very expensive, and each city could only handle a small number of simultaneous phone calls. One of the first mobile phone systems, in St. Louis, could not even accommodate 100 simultaneous calls. Mobile telephones were given their own frequency band by the FCC, and this small portion of the airwaves would only accommodate a small number of users. Cellular telephone service changed all of this.
DSL and cable modems: High speed and low cost
New data networking services
New technologies, such as the Internet and video-on-demand, have caused a strong hunger in the marketplace for more bandwidth. Everybody wants to send more data at faster speeds. Many large companies pay for a T-1 connection to the Internet, but smaller businesses do not spend their money as freely. Most residences and many small businesses are far away from the telephone company central office, so it is too costly for carriers to offer advanced data services at an affordable price. The little guys have been left out—until recently.
DSL and cable modems: High speed and low cost
During the last few years, the phone companies have looked for new ways to offer high bandwidth services to small businesses and consumers. The two most prominent technologies that have recently stormed the market are digital subscriber line (DSL) service and cable modems. Both services offer bandwidth up to 1.544 Mbps for less than $100 per month. That means a consumer can get T-1 bandwidth without paying $1,000 a month for it.
DSL service is being widely adopted by both small businesses and consumers. Cable modems have been most attractive to consumers, probably because most homes are already wired for cable TV service.
Both DSL and cable modem service are dedicated connections. The line is always available for Internet use. Cable modems do not have to “dial-up” the specific ISP; they are always connected to the ISP. In addition to unlimited Internet access, most DSL and cable modem service providers give their customers e-mail accounts and Web site hosting as part of the monthly service.
According to Computer Economics, cable modem subscribers in the United States will increase from 5.7 million in 2000 to 27.6 million in 2005. DSL subscribers are expected to increase from 2.4 million in 2000 to 13.8 million in 2005.
DSL
As previously explained, the “last mile” of copper wiring from the telephone company’s central office to a business or residence has limited bandwidth capacity. End users demand lots of bandwidth, and phone companies want to earn revenue from this opportunity. DSL technology is a recent development that should satisfy both consumers and phone companies.
DSL deployment began in 1998. Since then, both computer manufacturers and telephone companies have not yet ironed out a single standard for DSL service. Consequently, numerous flavors of DSL are being offered today. The whole family of DSL services is often referred to as xDSL, with the “x” representing any number of other letters such as ADSL, CDSL, UDSL, VDSL, G.Lite, DSLLite, and freeDSL.
DSL offers a lot of bandwidth to small companies and consumers at phenomenally low rates. A typical DSL customer can receive 1.544-Mbps bandwidth across an ordinary copper telephone line for around $50 per month. That amount of bandwidth has previously only been available to businesses that paid as much as $1,500 per month for T-1 service.
DSL technology sends a digital signal across a traditional twisted-pair copper telephone line. Because the signal is never converted to analog, greater bandwidth is available. Like ISDN, DSL service can carry both voice and data simultaneously. A person can surf the Internet and talk on the phone at the same time. DSL uses a dedicated connection to the Internet.
Upstream and downstream
DSL has separate transmission rates for “upstream” and “downstream” data. A person surfing the Internet will receive large amounts of data “downstream” from the Web site because of the numerous graphics and files. The amount of data sent “upstream” is minimal, because the Internet surfer is only sending mouse clicks or occasional keystrokes. DSL service typically offers upstream rates of 128 Kbps, and downstream rates of 1.544 Mbps. Figure 1 illustrates DSL’s differing rates for upstream and downstream traffic.
Figure 1: DSL service uses standard copper telephone wires but can deliver T-1 bandwidth downstream from the carrier.
A DSL customer that wants to use his telephone and computer on the same line must have the signal separated so that the bandwidth can accommodate the phone’s analog signal and the computer’s digital signal.
DSL is available across the United States in most large and mid-size cities. Flashcom, one of the largest DSL providers, offers service for $49 per month. This includes Internet access, and if the customer signs a 24-month term agreement, the equipment is free and installation fees are waived. In Missouri, SBC provides DSL service for $39 a month, or $49 a month with Internet access included. A 12-month term agreement is required with this pricing, and the customer must purchase a “DSL modem” for $198. DSL is a flat-rate service; there are no monthly charges for usage.
Save money with DSL
Besides providing a large amount of bandwidth for Internet usage, DSL can also be used to lower existing telecom costs. A small independent insurance agency in Baltimore, for example, recently signed up for DSL service with a national DSL provider. The service provided a 512-Kbps dedicated connection to the Internet, e-mail, and Web site hosting, and the business could still make analog phone calls over the same line. The business previously paid more than $300 per month for all of these services. See Table 19.1 for a cost comparison of this change.
Cable modems
Cable modems are designed for high-speed Internet connections. Like DSL service, cable modems provide Internet access at different speeds downstream and upstream. The actual bandwidth for Internet connections over a cable line is 27 Mbps downstream and 2.5 Mbps upstream, but the total rate experienced by the end user is normally 1.544 Mbps. That is not too bad, though, considering that today many businesses pay more than $1,000 a month for this amount of bandwidth.
A new cable modem customer needs a service provider and the cable modem itself. Most service providers allow the customer to rent a cable modem; otherwise, the customer must pay around $300 for the device. With Time Warner’s Road Runner service, the subscriber pays a one-time installation fee of $100 and a monthly fee of $40. The monthly fee includes rental of the cable modem and unlimited Internet access. Cable modem users do not pay hourly fees for Internet use.
SONET and DWDM
Three basic types of data networking in use today: dedicated private lines, circuit switching, and packet switching. Specific services that use these technologies include ISDN, frame relay, ATM, and DSL. These services are commonly used by businesses.
Two other data networking technologies bear mentioning here: synchronous optical network (SONET) and dense wave division multiplexing (DWDM). Both SONET and DWDM are technologies used for transmitting data across fiber-optic lines. SONET and DWDM are used within carrier networks and rarely in a customer’s network. A single SONET connection is capable of simultaneously carrying 129,000 conversations.
New technologies, such as the Internet and video-on-demand, have caused a strong hunger in the marketplace for more bandwidth. Everybody wants to send more data at faster speeds. Many large companies pay for a T-1 connection to the Internet, but smaller businesses do not spend their money as freely. Most residences and many small businesses are far away from the telephone company central office, so it is too costly for carriers to offer advanced data services at an affordable price. The little guys have been left out—until recently.
DSL and cable modems: High speed and low cost
During the last few years, the phone companies have looked for new ways to offer high bandwidth services to small businesses and consumers. The two most prominent technologies that have recently stormed the market are digital subscriber line (DSL) service and cable modems. Both services offer bandwidth up to 1.544 Mbps for less than $100 per month. That means a consumer can get T-1 bandwidth without paying $1,000 a month for it.
DSL service is being widely adopted by both small businesses and consumers. Cable modems have been most attractive to consumers, probably because most homes are already wired for cable TV service.
Both DSL and cable modem service are dedicated connections. The line is always available for Internet use. Cable modems do not have to “dial-up” the specific ISP; they are always connected to the ISP. In addition to unlimited Internet access, most DSL and cable modem service providers give their customers e-mail accounts and Web site hosting as part of the monthly service.
According to Computer Economics, cable modem subscribers in the United States will increase from 5.7 million in 2000 to 27.6 million in 2005. DSL subscribers are expected to increase from 2.4 million in 2000 to 13.8 million in 2005.
DSL
As previously explained, the “last mile” of copper wiring from the telephone company’s central office to a business or residence has limited bandwidth capacity. End users demand lots of bandwidth, and phone companies want to earn revenue from this opportunity. DSL technology is a recent development that should satisfy both consumers and phone companies.
DSL deployment began in 1998. Since then, both computer manufacturers and telephone companies have not yet ironed out a single standard for DSL service. Consequently, numerous flavors of DSL are being offered today. The whole family of DSL services is often referred to as xDSL, with the “x” representing any number of other letters such as ADSL, CDSL, UDSL, VDSL, G.Lite, DSLLite, and freeDSL.
DSL offers a lot of bandwidth to small companies and consumers at phenomenally low rates. A typical DSL customer can receive 1.544-Mbps bandwidth across an ordinary copper telephone line for around $50 per month. That amount of bandwidth has previously only been available to businesses that paid as much as $1,500 per month for T-1 service.
DSL technology sends a digital signal across a traditional twisted-pair copper telephone line. Because the signal is never converted to analog, greater bandwidth is available. Like ISDN, DSL service can carry both voice and data simultaneously. A person can surf the Internet and talk on the phone at the same time. DSL uses a dedicated connection to the Internet.
Upstream and downstream
DSL has separate transmission rates for “upstream” and “downstream” data. A person surfing the Internet will receive large amounts of data “downstream” from the Web site because of the numerous graphics and files. The amount of data sent “upstream” is minimal, because the Internet surfer is only sending mouse clicks or occasional keystrokes. DSL service typically offers upstream rates of 128 Kbps, and downstream rates of 1.544 Mbps. Figure 1 illustrates DSL’s differing rates for upstream and downstream traffic.
A DSL customer that wants to use his telephone and computer on the same line must have the signal separated so that the bandwidth can accommodate the phone’s analog signal and the computer’s digital signal.
DSL is available across the United States in most large and mid-size cities. Flashcom, one of the largest DSL providers, offers service for $49 per month. This includes Internet access, and if the customer signs a 24-month term agreement, the equipment is free and installation fees are waived. In Missouri, SBC provides DSL service for $39 a month, or $49 a month with Internet access included. A 12-month term agreement is required with this pricing, and the customer must purchase a “DSL modem” for $198. DSL is a flat-rate service; there are no monthly charges for usage.
Save money with DSL
Besides providing a large amount of bandwidth for Internet usage, DSL can also be used to lower existing telecom costs. A small independent insurance agency in Baltimore, for example, recently signed up for DSL service with a national DSL provider. The service provided a 512-Kbps dedicated connection to the Internet, e-mail, and Web site hosting, and the business could still make analog phone calls over the same line. The business previously paid more than $300 per month for all of these services. See Table 19.1 for a cost comparison of this change.
Cable modems
Cable modems are designed for high-speed Internet connections. Like DSL service, cable modems provide Internet access at different speeds downstream and upstream. The actual bandwidth for Internet connections over a cable line is 27 Mbps downstream and 2.5 Mbps upstream, but the total rate experienced by the end user is normally 1.544 Mbps. That is not too bad, though, considering that today many businesses pay more than $1,000 a month for this amount of bandwidth.
A new cable modem customer needs a service provider and the cable modem itself. Most service providers allow the customer to rent a cable modem; otherwise, the customer must pay around $300 for the device. With Time Warner’s Road Runner service, the subscriber pays a one-time installation fee of $100 and a monthly fee of $40. The monthly fee includes rental of the cable modem and unlimited Internet access. Cable modem users do not pay hourly fees for Internet use.
SONET and DWDM
Three basic types of data networking in use today: dedicated private lines, circuit switching, and packet switching. Specific services that use these technologies include ISDN, frame relay, ATM, and DSL. These services are commonly used by businesses.
Two other data networking technologies bear mentioning here: synchronous optical network (SONET) and dense wave division multiplexing (DWDM). Both SONET and DWDM are technologies used for transmitting data across fiber-optic lines. SONET and DWDM are used within carrier networks and rarely in a customer’s network. A single SONET connection is capable of simultaneously carrying 129,000 conversations.
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