Wireless for the Wide, Open Spaces

They are frugal, yet innovative. They frequently are willing to take chances with new ideas. They know their markets. And they've learned that a good reputation is like money in the bank.

They are the wireless carriers successfully offering services in America's rural areas. Many got their start at the beginning of this century as independent telephone companies or telephone cooperatives. Others began as early cellular carriers. Some serve areas partitioned from A and B carriers -- areas too sparsely populated for the larger carriers to bother with. Many took advantage of the C-, D-, E- and F-block PCS auctions.

They run their businesses somewhat differently from the AT&Ts and Sprints of the world.

"We drive our own ship here. If we wake up in the morning and decide to change things, it's changed by the end of the day," said Bill Casto, general manager for Cellular Mobile Systems of St. Cloud, MN, which operates Cellular 2000 and Lifecom PCS.

But like AT&T and Sprint, most have clearly conceived, sophisticated business plans.

As the smaller markets are deploying, vendors have been developing smaller-scale, cost-effective infrastructure equipment that can be expanded to provide for growth. Some are looking to the smaller systems to showcase their products. Others are finding new applications for products designed for developing nations elsewhere in the world.

"The smaller systems are the real pioneers at looking at new technologies," said Casey Joseph, Tecore CTO.

A CHANGE IN PLANS Since the early 1900s, Yorkville Telephone Cooperative (YTC) has provided telephone service to people living in rural areas of the northwestern corner of Tennessee. Headquartered in Yorkville (population 350), the cooperative today serves about 1,950 wireline subscribers, according to W.T. Sims, general manager for the past 35 years.

But those wireline numbers are overshadowed by YTC's cellular customer base of 8,700. In 1991, YTC applied for and received the B-side cellular license for a partition of the RSA, including the larger towns of Dyersburg and Union City, TN, with some 96,000 POPs.

The first cell site was turned on in April 1992.

"Studies indicated we'd have 132 (cellular) customers that first year with that cell site," Sims said. "We had that in 16 days, and we've been trying to catch up ever since."

Initially YTC put in three cell sites with a backhaul routing system linking them to the MSC of the Memphis, TN, RBOC.

"It worked reasonably well, but we were at their mercy," Sims commented. YTC had to pay for every customer activation, de-activation and any custom-calling features.

Then, in 1994, after the three sites were up and running, YTC learned that the RBOC was changing its infrastructure equipment. In order to continue its operation, YTC also would have to make a change.

YTC started looking at other vendors including Celcore, the cellular infrastructure division of DSC Communications. Celcore now is known as CID.

Celcore offered an AMPS cellular system, using a distributed network architecture, designed to meet the needs of YTC. It provided a small-scale switch to handle local traffic, and the switching system fit into a single cabinet.

YTC was able to purchase a complete Celcore cellular network in 1995 for less than the cost of replacing the three existing base stations and expanding to full coverage with six additional base stations. The network included an MSC, network-management system, nine base stations and a signaling hub, the GlobalHub. The GlobalHub allows seamless integration of YTC's network with other cellular networks using the IS-41 protocol. In 1997, YTC expanded again by adding a second Celcore MSC.

Steve Chen, DSC vice president of marketing, said YTC had hoped it could continue to run the cellular system without substantially increasing employees. YTC had 15 employees when the Celcore system was installed. Today it has 14, though Sims admits it probably is time to add a few more.

YTC remains an analog cellular system. Its only competitor is the A-side cellular carrier and, as far as Sims knows, that's an analog system, too.

However, when he wants to upgrade to digital, Celcore is ready for him. It announced its digital TDMA platform this summer, which should be available in mid-1999.

"If Yorkville wants to go digital, we can upgrade their existing network," Chen said. Celcore's TDMA system has been designed specifically for emerging, low-subscriber-density markets.

YTC was the first system to use the Celcore solution in the United States. Since then Blanca Telephone in south central Colorado put in a Celcore system, initially to provide first-time telephone service in remote areas that had not been served before, Chen said.

A third U.S. customer is the Navy, which has installed Celcore systems on eight battleships to provide non-technical and non-critical shipboard communication. The system is linked to the ship's PBX so that calls may be made between the wireless phones and the ship's phones, Chen said.

STARTING IN THE C BLOCK Southeast Telephone in Pikeville, KY, got into the wireless business by winning C-block PCS licenses for six BTAs in Kentucky and West Virginia. Southeast Telephone is a GSM carrier, and it found that equipment from AirNet Communications would best meet its needs.

Darrell Maynard, Southeast president, said just about all of the vendors came through town as he was trying to make an infrastructure decision. He looked at TDMA, CDMA and GSM -- what he terms the "high-tier" solutions -- along with the "second-tier" solutions of PACs, DECT and the supercordless Ericsson product.

"The main thing I saw was that cellular had the geography and a huge head start on us," Maynard said. "For a newcomer without the territory, it would be utterly foolish to compete on a cellular basis. So how do we make this work with the high-tier technology?" His answer was Community Cordless, a concept Southeast Telephone has trademarked.

In rural areas, Maynard said, people use the 3W cellular bag phones in their cars to get adequate reception. His Community Cordless service provides a portable alternative to use in the community.

His challenge was providing service without incurring huge backhaul costs. He read about AirNet's wireless backhaul solution in a trade magazine and called Glenn Ehley, AirNet marketing vice president. AirNet not only resolved some of the backhaul issues, but also it provided third-party financing.

AirNet's solution uses the software-defined broadband radio technology originally developed by Harris, according to David Guggenheim, AirNet director of business development.

When AirNet realized that its market was going to be in the PCS C through F blocks, the company put together a team to survey this market and determine its operators' specific needs.

"AirNet created a remote radio which allowed us take groups of channels from the base transceiver station (BTS). We can place them up to 24 miles away from the BTS without backhaul," Guggenheim said.

"We do this by borrowing the PCS spectrum and transporting channels in-band from the BTS out to the remote radio," he explained. "The remote radio is not a repeater. It has full diversity, cell-site identifier and all things a normal cell site would have. But because it doesn't have the intelligence of a full cell site -- the host BTS still has most of the intelligence -- the remote radio is very inexpensive."

The BTS can be connected to up to 12 AirSites. Based on that conceptual design at 1.9GHz, it allows a single BTS to spread its capacity over 1,100 square miles, Guggenheim said.

Maynard noted that a 24-channel remote cell site can cost $250,000 to $300, 000, while a 48-channel site can cost a half-million dollars. His 8-channel radio site cost on the low side of $40,000, Maynard said. The radios can be placed on utility poles, which solves many zoning issues.

When Maynard talked to Wireless Review, he had soft-launched in the Pikeville area and planned to move into Bowling Green, KY in the fall. The Kentucky market has 1 million POPs, and he plans to have a third covered in the first three years. Southeast Telephone also offers long distance, Internet access and paging, and Maynard is thinking of reselling cellular.

AirNet equipment also was selected by Third Kentucky Cellular, a C- and F-block operator doing business as Wireless 2000 PCS in Corbin, KY. As a result of this installation, AirNet won the 1998 GSM World Award for Best Technical Innovation.

MULTIPLE-TECHNOLOGY PLATFORM Wireless 2000 PCS also took advantage of another product developed especially for smaller markets, the AirCore MSC platform developed by Tecore for mobile, wireless local loop and wireless PBX platforms.

Tecore developed this product after determining that there was a niche for wireless not being addressed by the bigger infrastructure vendors. "We saw a really good opportunity to build a scaleable wireless switching system with all the bells and whistles, which could be offered in a small capacity originally and then could grow with the subscriber base," said Tecore's Joseph. But instead of choosing to address just one of the technologies, Tecore decided to take an innovative approach and build one that could address multiple technologies.

"This is great for operators who are buying the system not to be tied into one interface technology. They can buy new base stations and then crank up a CDMA overlay over GSM and capture roaming traffic," he said. So if a carrier has a hot stretch of highway, it can increase its roaming revenue.

Tecore started with AMPS first, then GSM. This year it added TDMA, CDMA and a multiprotocol switch. If an operator has an AMPS system and requires SS7 connectivity to upgrade, then it will have to purchase some hardware, Joseph said.

"But we managed to take the particulars of an individual protocol and isolate them to a very low layer of software within our application on a common hardware platform," he said.

Other advantages of the Tecore AirCore include its small size.

"Basically it's a single chassis, 17 inches high, and fits in a 19-inch rack mount. That product is a full-blown network switching subsystem," Casey said. "All of the components, other than the RF, are integrated to where you can actually -- if you have your base stations in place and if you have your PSTN and wireless connections in place -- bring our system in and crank up and start doing calls in a very short period of time."

Network management has been integrated into the system, and prepaid is available as a software package. Billing-system software also is available.TDM A, CDMA & AMPS Offering more than one protocol makes sense to Casto in St. Cloud, MN. He has CDMA at l.9GHz, TDMA at 800MHz and AMPS all running on the same Nortel switch at the same time. Casto sells cellular as Cellular 2000 and launched PCS this summer as Lifecom.

In St. Cloud, which has a population of 120,000 (205,000 in the total subscriber area), he competes with Aerial, AT&T Wireless, Nextel and US West, but manages to stay below 1% churn.

About three years ago, Casto upgraded his cellular system and put in digital control channels in order to offer digital-like services on analog such as caller ID and message waiting. He also added dual-mode radios so the radios could operate as AMPS and TDMA. At that time, the TDMA quality was not what he wanted to sell, but when the new vocoders and software became available, he began offering TDMA cellular, a system Casto calls "just excellent."

Once he obtained his PCS F-band license, however, Casto decided he wanted to offer CDMA.

He determined the least expensive way to proceed was to use the Nortel DMA-MTX Super-Node digital wireless switching system and just add some front-end equipment to provide the CDMA, TDMA and AMPS on the same switching platform.

One reason he didn't use TDMA for PCS was because AT&T Wireless, also TDMA, is a competitor in his market. But his primary reason was capacity. Eventually he wants to offer ultra-low mobility (fixed wireless), and Casto thinks CDMA offers the capacity he will need.

The CDMA PCS phone will be the community phone.

"You can take it anywhere in the market and use the heck out of it at a low cost per month," Casto said. But if you travel, you can't use CDMA all over the country, and without a dual-mode phone, you're out of luck, he said. TDMA cellular is offered to those who want a technology more available today, Casto said. Casual or emergency users are advised to stick with analog for now.

But when a local CEO asked Casto what kind of a phone he should get, Casto tried to send him to Aerial.

"He did a lot of overseas traveling, so I explained that Aerial had GSM with the SIM card, and that probably would work best for him," Casto said. The CEO did not take Casto's advice; he decided to stick with Casto's service.

Casto plans to add CDMA at 800MHz next, which he can do without changing out his Nortel equipment. He wants CDMA 800 because Duluth, Minneapolis, St. Paul and Fargo all have it.

"AirTouch is our biggest roaming partner, and we want to take care of our roaming partners," Casto explained. But unlike many other smaller operators, his goal is to decrease roaming revenue as a percentage of his total gross revenue.

"I want us to control our own destiny, and you can't control your own destiny when you rely on roaming revenue to provide your profitability," Casto explained. "You have to take care of your own subscribers and love them and have them love you for longevity in this business."

Casto also offers data services (CDPD), Cellemetry and recently obtained a LMDS license.

WORKING WITH THE INDEPENDENT TELCOS In many ways, Casto is a typical Nortel customer. Mark Buford, Nortel spokesperson, said that Nortel got into cellular infrastructure late in the game, so its traditional cellular customers were the RSAs. Even more typical are the small telephone companies that either have gone into cellular or have new PCS licenses.

Maureen Patterson, Nortel vice president of sales for wireless networks, and Mike Kletchko, Nortel account manager for wireless networks, work with these small independent telephone companies.

"Independent telephone companies historically have had a view of themselves as a full service telecommunications shop," Patterson said. Even when the Bells were restricted from offering long distance, the independent companies set up long-distance companies many years ago and became Internet service providers in many cases. When PCS licenses became available, many took advantage of the opportunity to bid for C-, D-, E- or F-bands, or partitioned spectrum from larger operators with A or B licenses, she said.

Nortel's DMS 100, its "flagship" product, has provided switching for the wireline networks since the late 1970s. With a new software load, the wireline switch can accommodate wireless as well. Both the 3 Rivers Telephone Cooperative in Fairfield, MT, and Montana Telephone Cooperative in Missoula launched PCS with the Nortel DMS 100 Wireless switching system and 1.9GHz cdmaOne digital-radio, base-station equipment.

Kletchko said the DMS 100 handles up to 120,000 lines. With the DMS 100 wireless upgrade, these lines can be divided between wireline and wireless.

"A lot of the independents had a lot of excess capacity in their switches, so by adding wireless, they're more effectively able to use that," he said. Nortel's Supernode SE is a scaled down version for smaller operators, offering up to 30,000 lines with the same software capabilities.

FIRST-TIME PHONE SERVICE What do you do if you're really rural, and really small, and 30,000 lines -- or even 3,000 lines -- are not in the long-range forecasts for your company?

South Park Telephone Company, based in Colorado City, CO, was faced with boldly going where no telephone company had gone before in order to serve fewer than 200 customers.

South Park Telephone (yes, it's the same South Park of TV cartoon infamy) was formed by Michelle Anderson and her two brothers, Ty and Nathan McCormick, expressly to serve the people living in the 600-square-mile area surrounding the town of Hartsel, CO. The town itself, about 40 houses, is served by US West; the outside area never has had phone service.

Anderson and her brothers grew up in rural Colorado, where their grandparents founded the Rye Telephone Company, which eventually was taken over by their father.

About four years ago, US West sold about 28 rural exchanges in Colorado that it had been mandated to serve within a certain time period. It contacted the Rye Telephone Company about serving the area around Hartsel, but it would have been too great a burden for Rye Telephone subscribers. That's when Anderson and her brothers decided to found a new telephone company. They then were asked also to serve a very remote area further south with about 30 homes scattered throughout it.

All of the larger carriers had turned down this area, saying they could not do it. So the newly formed South Park Telephone Company accepted the challenge.

Initially it purchased a wireless technology consisting of BETRS radios and copper fiber used at the 454MHz range.

"We turned it up, and it didn't work," Anderson said. "The company was unresponsive, and we were getting nowhere, so we started looking elsewhere."

South Park Telephone had received a brochure from Diva Communications about its Diva-2000 wireless local loop (WLL). It looked promising, and arrangements were made to meet with a sales representative.

The Diva-2000 is designed strictly for fixed-wireless access and can connect directly to a wireline switch with no need for a wireless switch and no handover, said Alan Jacobsen, Diva vice president of marketing. With a subscriber terminal, a customer can phone, fax or use a modem and has access to all the features that on are on the switch.

Diva's WLL operates in the 800MHz cellular band and uses digital technology. It was designed for towns and villages of 200 subscribers without phone service, so Diva did not think there were applications for it in the United States.

"To our surprise, a number of independent operators in rural areas thought we were exactly the solution they needed," Jacobsen said. Diva now is looking at ways to evolve the product to address these markets more aggressively, he said.

Anderson has obtained spectrum from a cellular operator, which has agreed to disaggregate some of its frequencies. South Park Telephone is leasing the frequencies initially, but then will negotiate a purchase price and start the application process with the FCC. Its initial system consists of five tower sites in a 140-square-mile area, with the central office located in Hartsel.

South Park Telephone started with 17 customers. It buried cable to serve eight customers in one area and temporarily installed point-to-point, spread-spectrum radio systems to serve the others. The Diva system is replacing these systems.

Anderson is especially happy with the service South Park Telephone has received from Diva.

"If there is a deadline, Diva has met it if not beat it," she said. "We feel like we are in very good hands."

Jacobsen said Diva selected South Park Telephone as its first U.S. customer because it was the most aggressive in needing the product as soon as possible.

As Anderson explains it, for South Park Telephone and other very rural companies, the business is more about service than profits.

"It's a very different world that we operate in," Anderson said. "We are a small, independent company, and we do receive the Universal Service funding. We are third-generation telephone pioneers, and we grew up listening to Rye Telephone talk at the table about serving our neighbors.

"Here we are, close to the year 2000, and I'm doing the same thing my grandmother did in the late 1950s -- going into an area that didn't have telephone service and bringing them service for the first time."