Conspiracy theory: Wireless local loop has made a global journey in its quest for acceptance. Could it be that the truth was right here all along?

You want to believe. The unraveling saga has become too intriguing to ignore, and in the face of ever-mounting evidence, the truth is becoming clearer all the time.

Wireless local loop's pilgrimage toward domestic acceptance has been marked by international missions, technological secrets and surreptitious strategy shifts. Companies were absorbed, spectrum was warehoused, clandestine labs were established-all in the name of finding a new avenue for technological and competitive progress.

This is the story of how wireless local loop technology made the journey from developing countries to the U.S. telecommunications fray, bringing with it a fast and efficient method of bypassing local incumbents and seizing a piece of one of the most coveted service realms.

A study published recently by Allied Business Intelligence indicates that 10% of the world's subscribers-about 266 million people or businesses-will be using wireless as their primary access to local telephony by 2006. A technological platform that has long been attractive in theory, particularly for carriers seeking to stake new claims by bringing telecom service to regions where technology has yet to tread, is now being uncovered as one of the best kept secrets in the local loop (Figure 1).

The big boss In the future, we likely will look back and say that AT&T started it all. In late February, the carrier confirmed that engineers in Kirkland, Wash., had been working quietly for three years to develop a proprietary fixed wireless scheme that would be tested as one method of providing local access (Telephony, March 3, page 6). Code name: Project Angel.

But AT&T's sheer bulk, not to mention its somewhat divisive bicoastal wireless/wireline structure, makes working quietly nearly impossible. Ultimately, its plan was discovered, and because the carrier had already completed required spectrum acquisition and was close to trial stage, AT&T let the Angel out of its cage.

Although AT&T's plan was initially shocking and even somewhat controversial, the reasons behind its exploration of wireless for local access and its behind-the-scenes concept are not-which is partly why the story is so intriguing. For AT&T, using wireless is a matter of economics and network efficiency.

"If I'm wired, the wire is always dedicated to me whether I use it or not," says Nick Kauser, chief technology officer at AT&T Wireless Services and the technological leader of Project Angel. "The bits transmitted over the air are only dedicated to me in a packet when I need to use them."

AT&T's endorsement of wireless local loop was not the first time that an established wireline entity has bandied about the fixed wireless concept. But it was the first time a carrier of AT&T's size and market position made a public commitment to test such a bold technological concept for such an important part of its overall strategy. Among other milestones, AT&T's announcement validated the long-circulated tenets that said the lines between carrier and service categories have blurred and that the carriers of the future will use a variety of transmission methods and provide a range of services.

"There is no such thing as long-distance, local, short distance and so on," Kauser says. "You're going to compete on an end-to-end basis."

Behind the plan AT&T's wireless local loop plan has many intriguing aspects, but one of the most fascinating is that the carrier developed its own technology platform rather than relying on those already developed and internationally deployed.

One of the primary reasons was that even though the carrier is spectrum-rich, limitations in radio technology dictate that whatever technology it deploys to provide a fixed wireless offering must make the best possible use of capacity. None of the existing wireless local loop platforms passed muster, so AT&T designed its own. Equipment contracts for the proprietary platform are still pending.

"The main issue was, could we get radios that were spectrally efficient enough that, with a limited bandwidth, we could make a go of this?" Kauser says.

The technology AT&T is testing is based on orthogonal frequency division multiplexing (OFDM), a dynamic bandwidth allocation technique that divides transmissions by frequency, time and code before it transports them. The method squeezes the maximum amount of capacity out of the system.

"It's a combination of all the acronyms in the book," Kauser jokes.

The combination of multiple technological concepts, in addition to state-of-the-art modulation schemes and smart antenna technology, also has allowed AT&T to eliminate the need for line-of-sight transmission from the tower, he says. That means the system will be able to transmit to a relatively small home base station that can be mounted in a hidden location. AT&T hopes this feature will boost customer acceptance levels.

"It's quite different from putting a pedestal on your lawn," Kauser says.

There are many technological options for wireless local loop deployment. A lot of them are based on existing wireless technologies such as code division multiple access (CDMA), time division multiple access (TDMA), GSM, personal access communications system (PACS) and digital enhanced cordless telephony (DECT) (Figure 2). As with wireless mobility, the technology options already have sparked lively debate about the virtues and drawbacks of different platforms for wireless local loop.

The chief operatives The most telling proof of why wireless technology will make a name for itself in the local loop lies in the carriers that plan to use it. These are not fly-by-night operations-they are telecom's old guard.

The established wireline network operators stand to gain the most from wireless local loop technology in the "pure" sense of the concept-even more than the personal communication services, cellular or broadband wireless providers. Wireless local loop is broadly interpreted in terms of who, what and where, but it is most accurately defined by the type of services it will enable.

"To me, wireless local loop implies a fixed wireless service," says Lou Olsen, vice president of strategic initiatives at LCC. "That's the common denominator: You can do it at any frequency, but it's fixed."

The best candidates to be early adopters of a technology that allows delivery of fixed services into a new area are those that are not yet there but are longing to be. MCI has mentioned the possibility of using its airtime purchase agreement with NextWave, a C block PCS license holder that plans to act as a carriers' carrier, as one prong of its local strategy.

Like AT&T, Sprint acquired much spectrum in the 10 MHz license auctions and may use it for wireless local loop as well. It doesn't stop there, however.

Essentially, any wireline operator armed with some spectrum could choose to extend the reach of its network by deploying a fixed wireless arm into regions where it is doesn't make sense economically to carry or bury wires. At a recent ICM-organized conference on wireless local loop held in Chicago, Martin Cooper, chairman and CEO of wireless local loop manufacturer ArrayComm, used this example: By connecting one base station to its existing switch, an incumbent wireline provider in a mountainous and wireline-challenging environment such as the Rocky Mountains could wire hundreds of homes or businesses at a vastly reduced cost than would be possible with wireline.

"Wireless local loop will be realized as a wireless extension of the current wireline network-as a more cost-effective method for reaching parts of the network," says Bob Sellinger, director of PCS market planning at Lucent Technologies. Lucent manufactures a CDMA wireless local loop product called AirLoop and a system based on the European-bred DECT protocol. "It's a reflection of the competition. They can use the same network for both mobile and fixed services, so they have a wired as well as wireless growth option."

The beauty of a wireline network operator's commitment to wireless local loop technology is that it is simply one of a menu of choices that can be deployed depending on the conditions of the market and the physical environment of a given region.

"With all the pressure they're under, they can certainly benefit from having another technology available," says Dave Trinkwon, director of business development for fixed wireless at Northern Telecom, which manufactures fixed wireless solutions based on CDMA, TDMA and GSM technologies. In short, an endorsement of wireless local loop is not an all-or-nothing gamble. "We're not advocating, pretending or imagining that it will all be wireless," AT&T's Kauser says.

The usual suspects Although wireless local loop is quickly emerging as a logical technological option for invigorating entrenched wireline carriers, that trend does not preclude the technology from finding its way into the hands of dedicated wireless providers.

Most PCS and cellular providers have concentrated on using their spectrum to offer full-mobility services, primarily because that's where the money is right now.

"If you give somebody some spectrum and the freedom to do what they want, the first thing they're going to do is get some revenue," says Jim Mullen, director of marketing at Hughes Network Systems, which manufactures wireless local loop systems in several air interface varieties.

But the transition of cellular networks to digital technology has opened new spectral opportunities for those carriers. Wireless newcomers that have the advantage of more spectrally efficient networks from the beginning are also likely to use some of their excess capacity to provide a fixed solution.

"As capacity continues to increase in traditional wireless, it's a natural extension for those companies to extend their own networks to fixed wireless," says Lucent's Sellinger. "[Cellular and PCS providers] have built their networks essentially for coverage. Now they can start offering additional capacity with multiple carriers engineered specifically for fixed wireless."

As PCS and cellular carriers' strategies progress, they will also likely use excess spectrum to create some kind of limited-mobility offering-a sort of enhanced cordless phone that works in and around the home or business-as opposed to pure fixed wireless service (Figure 3). Carriers such as Western Wireless and 21st Century Telesis have confirmed that they are developing that concept.

Centennial Communications, which holds PCS licenses for Puerto Rico, is using its spectrum there to provide both full-mobility services and a fixed wireless offering called Home Phone targeted at residential users who don't want to endure the long wait for connecting to the landline network.

"It's marketed as a phone you can take home, plug in and immediately start using," says Bob Braden, senior vice president of international operations at Centennial Communications. "The network was not built as a Johnny One-Note network. When we selected CDMA as our technology, our assumption was that we would be able to do both."

Those who define wireless local loop in the broadest possible sense also widen the category to include companies seeking to provide broadband services via fixed wireless systems (Table 1). That would encompass entities such as Teligent, WinStar and Advanced Radio Telecom. All three companies are building digital wireless networks that will either provide capacity to fellow carriers, as in the case of WinStar and ART, or beam wideband services directly to business customers via their rooftops, as in Teligent's model.

"The broadband application is another part of the fixed wireless opportunity," says Jim Miller, senior vice president of sales and marketing at ART. The company plans to make its business selling broadband capacity on its radio network to competitive local exchange carriers, Internet service providers and interexchange carriers. "We're principally a friendly alternative to the local exchange carrier."

The beneficiaries Carriers quietly considering wireless local loop technology face the same challenges. They must provide a local offering that is at least as good in terms of quality, functionality and price as what already exists to appeal to customers-whether those customers require business service, residential second lines or limited mobility offerings.

"In the U.S. you cannot go in with a me-too service," says AT&T's Kauser. "Why would anyone really switch for that? Our position was, why don't we offer them what they really want in the future?"

Most wireless local loop supporters agree that the technology can be wedged into the U.S. market in a variety of ways. But to lure customers, it must be configured to provide a service edge.

"The largest market for it will be in competitive access or bypass," says Homer Lloyd, strategic markets manager for Advanced Micro Devices, a supplier of silicon for use in customer premises equipment for wireless local loop systems.

But carriers that deploy wireless local loop need to distinguish themselves with high-speed data or limited mobility, he says. "You really need to provide customers with some enhancement to traditional service to get them to switch."

That enhancement may or may not come in the form of limited mobility, which is what supporters of the PACS and DECT standards are pushing. But there is still a question as to the market for limited-mobility product: Earlier this year, Ericsson shelved its DECT-based SuperCordless offering because of weak market demand. The vendor still is planning to develop a wireless local loop solution that is appropriate for U.S. deployment, but a mobility component is not likely to be part of it.

"We've seen a slower development of the low-tier market than we initially predicted," said Dick Hayter, director of wireless local loop at Ericsson. "The more interesting area is in looking at the residential market and providing a product that could be a competitor to the local loop. We recognize that to meet the demands of the developed world puts different requirements on the product," he said. "The regulatory drivers here are now falling into place so that wireless local loop can be looked at in the context of providing solutions in metropolitan areas."

The question of whether the ability to carry data will be what pushes wireless local loop into the mainstream sparks a heated debate, even among supporters of the technology. Some carriers say the data rate limitations of wireless local loop platforms are among the chief reasons they have steered clear of the technology, while most vendors take a different tack.

"A lot of people say wireless local loop is going to come in and take over data," says Rick Rotondo, product marketing manager at Excel, which manufactures open programmable switching platforms that can be used in wireless local loop configurations. "They have it totally backwards. It's going to take over voice, and everything else will be put over wires."

Indeed, the most logical solution for a carrier with both wireless and wireline solutions appears to be to use the wireless portion for voice transmission, thereby opening up more capacity on the wireline network for data transport.

"Data will default to the wireline," says Lucent's Sellinger. "Most of the carriers will push that lower-margin service off on the wireline."

The data rate issue becomes increasingly thorny when carriers talk about deploying wireless local loop solutions to serve the second-line market, a large chunk of which is made up of customers who require another line for data or fax purposes.

Another potential hurdle for wireless local loop hopefuls in the second-line market is the question of whether customer acquisition costs will make a business case for the technology. And that issue is far from being resolved at this stage of development.

The competitiveness of the local service realm is largely the reason the wireless local loop topic carries with it such an air of mystery. In theory-if not yet in regulatory practice-the local loop is an arena in which many varieties of carriers will be able to compete.

Because of its cost and time-to-market characteristics, wireless technology clearly is one of the most intriguing solutions for entering that fray, but most carriers are unwilling to discuss their wireless local loop strategies for fear of tipping their hands to potential competitors.

Rest assured, however, that the truth is out there.