Deals Boost Wireless High-Speed

2/14/1999 7:00 PM Eastern

Action last week by U S West on one front and by Motorola
Inc. and Cisco Systems Inc. on another spelled new hope for the use of wireless technology
in the high-speed-data arena.

U S West, seeking to overcome the shortfalls of ADSL
(asymmetrical digital subscriber line) technology, said it would begin a trial in April of
new wireless technology supplied by Qualcomm Inc. The telco is exploring means of
delivering its "MegaBit" data services to customers who can't be connected
via ADSL.

Also, Cisco and Motorola said they were launching their own
initiative, with commitments to spend up to $1 billion over the next four years. They plan
to create a standards framework and associated products capable of supporting
cost-effective integration of wireless voice, data and video service components over
high-speed IP (Internet protocol) connections.

These actions come as the battle among cellular and
personal-communications-services interests over next-generation platforms showed little
signs of abating anytime soon.

Groups linked to the digitally akin TDMA (time-division
multiple-access) and GSM (Global System for Mobile Communication) systems have reached
agreement on interoperability protocols supporting customers roaming across each
others' territories.

But the fissures dividing these interests'
next-generation "3G" (third-generation) platforms and the 3G platform linked to
CDMA (code-division multiple access) remained as deep as ever.

The problem isn't just that the air-interface RF
aspects of the platforms are incompatible, said John Shantz, vice president of market
development at Cisco.

The deeper issue, he added, is that there is no common
migration path to an IP infrastructure, which leaves the entire wireless industry
vulnerable to the efficiencies and functionalties that the wireline sector will be able to
exploit as it moves to integration on the IP platform.

"Traffic efficiency is better than 2-to-1 on the
number of calls that you can maintain over a T-1 or other connection using packet
technology, as opposed to circuit technology," Shantz said.

The Cisco/Motorola strategy is to begin offering products
for testing this summer based on the open architecture that they're backing. This
will allow carriers to begin the transition to the IP domain as they launch data services
over their existing platforms, regardless of the air interface that they use.

The migration path starts with creating packet-based
interfaces between the complex operational protocols of the wireless domain and creating
points of interconnection between the backhaul network of the wireless system and the IP
"cloud" that is common to all IP networks, Shantz said.

Eventually, the goal is to accomplish all of the
transcoding between the two domains right at the base station, so that all components of
the wireless-network infrastructure are communicating in the language of IP.

Somewhere between these two stages, it will be possible to
begin putting voice signals onto the packet backbone, allowing carriers to avoid the costs
of circuit switching as they deploy new infrastructure, Shantz added.

"Our intention is to make use of the same distributed
call-agent model for wireless IP voice that we're pursuing in the wireline
market," he said.

The two companies plan to submit a reference architecture
supporting all of this by May, in hopes of seeing it move quickly toward standardization
from there. They intend to build four research-and-development facilities -- two here and
two abroad -- that will support efforts by others, as well as by themselves, to create new
products and services linked to the new architecture.

The initiative has strong carrier backing, Shantz said --
especially in Europe, where wireless entities are saying that they can't cost-justify
moving to 3G platforms if doing so means building a parallel overlay network based on
packet technology.

"What we're doing is providing a migration path
that allows them to implement the architecture on the existing 2G [second-generation]
platforms, making the transition to 3G much easier and less costly," he said.

Sprint PCS senior vice president Keith Peglusch said his
company was interested in acting as a potential test bed for the new architecture.

"Anything that reduces network-operating costs, that
provides for more efficient transport or that adds functionality to the network is very
much in line with our strategic focus," he said.

Sprint plans to offer 14.4-kilobit-per-second circuit-based
data services nationwide starting in the second half of this year.

At the same time, it is working with its vendors --
including Lucent Technologies, Nortel Networks and Motorola -- to test 3G platforms built
to the "CDMA2000" specification in hopes of moving to a high-speed-data platform
over the next two years.

But Sprint spokesman Tom Murphy made it clear that his
company is not ready to budge on its primary conditions for 3G, which include backward
compatibility with the existing CDMA1 infrastructure and achievement of per-user data
rates of 2 megabits per second to 3 mbps.

While Sprint PCS supports the notion of the so-called
harmony initiative -- which is an attempt to achieve interoperability above the RF layer
between the GSM-based 3G system, known as "Wideband CDMA," and CDMA2000 --
incompatibilities in chip rates that would cut the speed of CDMA2000 links are
unacceptable, Murphy said.

"We're not kidding around," he added, noting
that the company is spending $200 million on lab testing of its vendors' 3G

This commitment to 3G is one reason why Sprint PCS is
reluctant to back still another high-speed-data solution offered by Qualcomm.

"We're looking at it, but we're making no
bones about our intentions to proceed with 3G," Murphy said.

Such resistance has prompted Qualcomm to reposition its new
technology as an alternative for wireline carriers, rather than as a substitute for other
mobile-wireless solutions, Qualcomm spokeswoman Michelle French said.

"We have several other carriers looking at the
technology for fixed-wireless applications in addition to U S West," she added.

U S West plans to begin testing Qualcomm's HDR (High
Data Rate) system over two cell sites in Minneapolis using PCS spectrum that it has not
been using for its current PCS service, said Wayne Leuck, vice president for wireless
engineering at U S West.

"We haven't made any commitments to rolling this
out, and we are looking at other options, as well," he added.

Qualcomm -- a major technology contributor to and backer of
CDMA2000 -- introduced HDR last fall as a means of providing near-term IP-based data
access over existing CDMA infrastructure. The technology delivers a 1.8-mbps shared-data
stream over one of the 1.25-megahertz frequency channels used by CDMA, without requiring
any upgrade other than the insertion of a channel card into the base station.

U S West will be able to deploy the technology at the base
stations using a direct IP interface into its regional data backbone, bypassing the rest
of the wireless-network infrastructure, Leuck said. But it remains to be seen whether the
technology delivers per-user data rates over the shared-access channel matching the basic
MegaBit consumer ADSL service at 256 kbps, he added.

"In all of the techniques that we're exploring,
the requirement that has to be met is that the service is transparent to users, no matter
what platform it's delivered from," Leuck said.

Such options are key to allowing the carrier to reach
virtually all customers in its service territories with high-speed-data access, as opposed
to the 50 percent or so that can be served by the existing ADSL service from any given
central office, Leuck said.

"Customer acceptance of the service has been very
strong, and we want to be able to give it to everyone who wants it," he added.

In light of the U S West development and other
fixed-wireless-data operations around the country, the upshot of all of the efforts among
vendors to create a high-speed wireless platform for their PCS and cellular customers is
that it may be their wireline competitors who exploit the technical options first.

If so, it will only intensify pressure on the wireless
industry to resolve its incompatibilities so as to meet the new service benchmarks
established on the wireline side, Shantz suggested.

"Wireless companies recognize that they have to move
to an integrated data-services platform," Shantz said. "This may not be good
news for some of their traditional suppliers in the switched-circuit market, but maybe
we're seeing a move to a customer-driven marketplace, rather than a
manufacturer-driven marketplace."

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