What began as a Craig McCaw idea became a definitive project for AT&T Wireless Services Inc. last week when the company announced plans to deploy a proprietary fixed wireless technology that could effectively cut into local home telephone service.
The idea of bypassing the Bell companies via wireless technology isn’t new. Competitive access providers do it every day. And numerous wireless companies are planning similar fixed wireless systems, for which manufacturers have built equipment.
What is compelling about this announcement is the likelihood this project will be financially endorsed by AT&T Wireless’ parent company, the nation’s heavyweight long-distance provider AT&T Corp.
“AT&T Wireless has been known to have vision, but has lacked real financial commitment from AT&T Corp.” for emerging market endeavors, said Bob Egan, research director of the Gartner Group in Stamford, Conn.
But this project could cut down on the access fees AT&T pays local phone companies.
“It provides an expense reduction for the parent company, so AT&T Corp. will get behind this. It maps in well with the overall corporate piece,” Egan said.
AT&T doesn’t like to call the system wireless local loop, saying it wants to avoid being identified with the offerings of equipment vendors such as Northern Telecom Inc., Motorola Inc. and Hughes Network Systems Inc., which have been offering WLL solutions for about three years.
AT&T prefers to call the patent pending technology “revolutionary fixed wireless.” It will be tested later this year in Chicago and the Kirkland, Wash.-based company hopes to have subscribers on a beta test by 1998.
For years, AT&T has been quietly developing the technology in a Redmond, Wash., laboratory, where the system was “designed from the ground up.” Prototype parts were built by the company.
People were working on the project, dubbed “Project Angel,” when the organization was still McCaw Cellular Communications Inc. It was a well-kept secret, and wasn’t even known to AT&T Corp. when it bought McCaw in 1994 “in case the deal didn’t go through,” McCaw execs said. The resources of AT&T could make Project Angel a dream come true.
The system uses beam-forming techniques drawn from U.S. military technology, and involves a little frequency hopping and some time division technologies, the company said.
It will operate using 10 megahertz of spectrum at 1900 MHz; AT&T Wireless Services has acquired numerous 30-megahertz and 10-megahertz blocks of spectrum at 1900 MHz through government auction during the last two years.
The system will operate point to point, home to base station. A transceiver, which will be owned by AT&T, will be placed on the residence. The system snips into the home telephone wiring system; things continue as normal in the house and no special phones are needed.
AT&T doesn’t expect to pay interconnection fees, hoping to work out bill-and-keep arrangements with the local phone provider.
AT&T would like to sell the service in a package of two 64-kilobit lines and an Internet access line that allows transmission speeds of 128 kilobits per second. Data is dispatched in packet form.
Steven Hooper, AT&T Wireless strategist, said the fixed system is a 21st century solution for local competition.
“For the 14 years I’ve been associated with the wireless business, I have always believed the reliability and quality of wireless never could compete with wireline, but that has changed,” Hooper said.
The new service is not related to AT&T’s mobility service.
“This is not a cellular system or a mobile system,” said Nick Kauser, chief technology officer for AT&T Wireless. “It’s a totally new type of system.” Subscribers could, if they wanted, install a home base station for mobility, but that is a different matter, the company stressed.
What is at stake for AT&T is the last mile to the home. Until now, “there hasn’t been an efficient way to get by this final obstacle,” said John Walter, AT&T president. “We have found a way over this hurdle. It’s more than a replacement for copper wires. It’s an alternate pathway to homes and small businesses and a virtual pipeline that uses radio frequency in innovative ways.”
Wireless local exchange service will take various forms in the next five years, such as home base stations, wireless local loop, and various wireless bypass technologies, said Jerry Kaufman of Alexander Resources, Scottsdale, Ariz.
“Our early research in wireless local exchange services found a very significant need and willingness to pay for communications services that would replace or augment local exchange services with wireless technologies,” Kaufman said. “We also determined that these new services would be different from personal communication services and cellular.”
