Cellular Radio Use Spreads.
The cellular radio telephone is much more than a new "status symbol" . . . or even a greatly improved mobile telephone. And its introduction clearly qualifies as a "momentous happening" of this decade.
Let's take one thing at a time. We said "finally" because cellular radio has been so long coming. Bell Labs developed the concept of "cellular way back in 1945. And, when the FCC was looking for ways to broaden the availability of mobile communications, AT&T formally proposed a cellular system in 1971. GTE Chairman Ted Brophy recently cited the lengthy process involved in bringing cellular mobile radio to the United States marketplace as an example of how new technologies make their "ponderous way through the regulatory labyrinth." Following an initial FCC order in 1974 allotting radio frequencies for cellular operation came the licensing of experimental systems in 1977 and an FCC report and order defining market areas and licensing procedures in 1981.
Cellular service finally became commerically available late last year in Chicago and the Baltimore/Washington-area . . . the two original test sites proposed in 1977. At year-end there were fewer than 2,500 cellular mobile units in operation.
Brophy points out that although more systems are expected to go into operation this year, obtaining final authorization still is a "relatively arduous exercise" because a dual system of regulation requires action by state as wellas federal agencies. "I believe all of us have to acknowledge," declares Brophy, "That there is something drastically amiss when a new technology must be clear a 12-year regulatory obstacle course before getting into the marketplace."
Even tho the basic idea for cellular radio was generated in the United States and even the other countries therefore started far behind the United States in technology, a number of foreign countries are now far ahead in actual operations because of our legislative lag.
Japan inaugurated commercial cellular service in 1979. There now are networks covering Tokyo, Osaka and five other cities with 20,000 customers on line and the capacity for almost 400,000 subscribers.
A system servicing more than 75,000 users in Norway, Sweden, Denmark and Finland began operation in 1981.
Cellular systems are now available to users in Saudi Arabia Qatar and Singapore . . . all using technology "made America."
So "finally" is a proper word to use.
To give you, quickly, at least a "vague notion" of how cellular works, the diagram on this page shows how a city is divided into "cells."
Cellular radio systems derive their efficiencies and greater subscriber capacity by dividing a large service area into small segments, or cells, each of which has its own low-power transmitter or base station receiving and transmitting messages within its boundaries. As a vehicle moves from one cell to another, a conversation in progress is handed-off to the new cell without interrupting the call. The system design allows the same frequencies to be used a number of times in a service area without interference.
After more than 10 years of debate and experimentation, the FCC in 1981 voted to allocate 20 MHz of 800 MHz spectrum to each of two cellular systems in a service area, with one of the two solely for the use of the local wireline telephone company, and the other for use by non-wirelines carriers, including radio common carriers.
To provide some semblance of order in implementing its decision, the FCC established four filing periods for cellular applications, initially the top 30 SMSAs (Standard Metropolitan Statistical Areas), followed by those for markets 31 though 60, 61 through 90, and then all others.
The filing response was overwhelming! The FCC found itself with nearly 200 applications for the top 30 markets (29 from wireline telcos and 142 from non-wireline carriers), and last november was flooded with 400 for markets 31 through 60 (70 from wirelines and 330 from non-wirelines).
After years of testing, commercial systems are now operating in the two test areas . . . Washington and Chicago.
The promise of cellular mobile radiotelephone service became a commercial reality last October, when Ameritech Mobile Communications inaugurated service in the Chicagoland area a week after the FCC granted it the first such license. The speedy initiation of service was possible because the Chicago system was in operating condition as part of a four-year developmental system that was under final test, covering a 2,500-mile, six-country cellular service area.
The first non-wireline system is also up and running in the Washington-Baltimore area, being operated by Cellular One, a consortium of five companies, one of whom is American TeleServices (ATS), which has been operating a developmental system in the area. ATS was recently acquired by metromedia. Other members of the group include Graphic Scanning, Metrocall, Metromedia and Metropolitan Radio Telephone Systems.
And cellular systems will soon be turned on all over the country . . . starting with those in the top 30 markets.
A major advantage of cellular radio is that cell size is not fixed; it can be varied economically to meet current and expected demand. When cellular service is introduced to a metropolitan area, each cell will be approximately eight miles in radius. The 48 channels available at each cell site will handle the mobile telephone traffic initially generated in the 200-square-mile area. As demand for cellular service increases, the initial cell can be split into between three and six smaller cells, each with 48 channels.
Now let's try for a "glimmer of understanding" as to the real implication of cellular.
Listen to John Naisbitt, the author of the best seller Megatrends. Says Naisbitt: "Introduction of cellular technology marks the beginning of the age of truly portable communications Instead of connecting people via stationary telephones, cellular communications will connect the world on an individual basis. That is extra-ordinary. The start of cellular service marks a very important step in the history of all communications. Just like the launching of the first satellites, the launch of cellular technology will herald in a new stage in the development of the Information Age. Early satellite launches in the late 1950s were initially perceived as part of the development of space exploration. In retrospect, the impact was far greater on communications. The real importance of Sputnik was not that it began the Space Age, but that it introduced the era of global satellite communications. Similarly, the introduction of cellular communications will lead to another stage in the development of that global communications network. It knocks down the last barrier to effortless and readily available means of global communications between individuals."
Listen even more carefully to Future Comm's Stuart Crump: "The revolution has begun. The personal communications revolution will change the way you communicate as radically as did the introduction of the telephone over 100 years ago. Dick Tracy would feel right at home in the personal communications revolution. He has been carrying his own personal communications device (PCD) on his wrist for about 40 years.
"Whenever anyone asks me what cellular radio is, I begin by explaining that cellular radio is the mobile telephone of the future. That's the first point you need to understand. The second point is, scratch out the word mobile. Cellular radio is the telephone of the future. Cellular radio . . . or something like it . . . will one day completely replace the wired telephones we know today. And when that happens, the nature of the telephone industry will change radically.
"When you discuss what the future of the telephone industry will be . . . with or without a divestiture . . . you should be aware that the very nature of the telephone business is going to change so profoundly as a result of cellular radio . . . the telephone without wires . . . that the impact of the divestiture will be minimal compared to the impact of new technologies such as this one.
"Wireless telephones will replace wireline telephones within some unknown period of years. I predict within about 20 years, but I would not be surprised if it happened much sooner. And it may not be cellular radio. It could be some other exotic new technology. Perhaps wristwatch telephones that tie directly into satellites. The point is that when the wires disappear, the very basis on which AT&T built its tremendous monopoly will also disappear.
"The Department of Justice thinks it has taken away AT&T's local loop monopoly by breaking up the Bell System. I'm arguing that AT&T technology will take that local loop away from AT&T in spite of diverstiture. The local loop is essentially a wired loop. Wires are the most expensive part of the local loop, particularly in rural areas, where it can cost several thousand dollars a mile to bury telephone cable. With cellular phones you don't need wires; hence, cellular radio will be one of the techologies that will help assure continued universal service.
"The point to remember is that the cellular radio is already here in some areas and is almost here in many major cities. It brings with it the beginning of a new era of telecommunications . . . the personal communications revolution."
Martin Cooper, chairman of Cellular Business Systems, sees cellular as attaining a one percent population penetration within ten years . . . giving cellular systems annual revenues starting at about $2.5 million and increasing to $3 million.
International Resource Development (see chart) sees cellular as a $10.6 billion market by 1983.
Whether you look at cellular simply as another exciting segment of the total communications market or as the forerunner of a whole new age of portable communications, cellular radio is one of the most momentous happenings in communications in the decade!
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|Date:||Sep 1, 1984|
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