Megan O'Connor, an immigration lawyer in New York City, had to walk down nine flights of stairs when her office building lost power in the massive Northeast blackout on Aug. 14 . But she found that her cell phone worked -- sporadically. During her hour-long walk home, her T-Mobile wireless service died. The next morning, 30% of T-Mobile's New York City cell sites, devices responsible for transmitting wireless phone signals, were out of commission, the outfit says -- about the same as for most other wireless carriers.
A decade ago, such a problem would have affected a relative handful of people. But today, 140 million Americans depend heavily on mobile telecommunications -- about 7 million, in fact, no longer have land-line phones. As a result, cell-service reliability has become a life-and-death matter for emergency workers or for anyone in need of help.
SCRUTINY SPURS IMPROVEMENTS. The cellular meltdown of Aug. 14 is sure to prompt inquiries into the reliability of cell-phone service. The carriers themselves, having upgraded after the September 11, 2001, terrorist attacks on New York and Washington, D.C., are very likely to make more enhancements. In part, they'll be trying to deflect a regulatory review by the Federal Communications Commission (FCC), which is now likely to mandate network improvements, says Michael Grossi, an analyst with wireless consultancy Adventis. The FCC -- which regulates the industry -- might require that cell sites have no more than 5 to 10 minutes of downtime per year.
One result will be higher costs for cellular operators. But they should benefit as well, since anything that makes mobile communications more reliable is likely to embed it more deeply into everyday life.
Superficially, the cause of the Aug. 14 interruptions is obvious: The batteries that power cell sites during an electricity outage ran down after an hour or two. Moreover, the carriers were swamped with calls. The hundreds of cell sites in New York City are each designed to handle about 6,000 callers per hour. When the volume triples or quadruples, it's busy-signal time -- just as Ma Bell callers experienced on Mother's Day decades ago.
TIGHT-FISTED WITH UPGRADES. Technologies that could solve such problems exist, but financially strapped wireless carriers have adopted them slowly. Of the six major carriers, perhaps four are profitable, in part because wireless subscriber growth has slowed more rapidly than expected recently, into the single digits. Cell-service price wars are reducing revenue per subscriber, a trend that could be exacerbated come November by a new federal law that will let mobile customers retain their phone numbers when they switch carriers. So, at the moment, most wireless companies are restricting their capital spending to maintenance, says Grossi.
The post-September 11 changes were significant. Carriers installed more backup diesel generators for the nerve centers, called switches, that connect every 100 or so cell sites. No. 5 carrier Nextel (NXTL), with 11.7 million customers, even carts mobile generators around the country, based on its own weather staff's projections of tornado or hurricane activity. In fact, the cell switches that serve New York City kept running during the blackout. So, once calling volume fell to normal levels and the electricity came back on, cell service came back, too -- by Aug. 18. "The wireless industry did much better than during September 11," says Robert Sanchez, chief technology officer at wireless consultancy InCode Telecom. "I wouldn't give it an A-plus, but I would give it a B-plus."
Going forward, that won't be nearly good enough, however -- and political pressure is building for a fix. On Aug. 24, Senator Chuck Schumer (D-NY) pointed out that only one wireless outfit operating in the New York area --T-Mobile -- allowed emergency workers access to its network during the blackout. He called for legislation that would require such priority access on all cell systems, as well as longer battery support and increased network capacity. In anticipation that cell carriers will either want to upgrade or be forced to, phone-equipment makers such as Nortel Networks (NT) are rushing to market technologies that improve the resilience of cellular networks.
SPACE FOR POWER. Batteries are one big area of focus. Unlike regular phone companies, which only need backup power for switches, wireless concerns also need that at cell sites. Problem is, many sites in urban areas are small and hard to expand, says Dave Murashige, vice-president of marketing for wireless networks business at Nortel. So as the number of wireless subscribers doubled between 1998 and 2002, carriers began sacrificing battery space to install the equipment to support a higher customer load. One solution is for communities to allow carriers more space per cell site.
Another option is to increase the efficiency of existing technology. A technology called baseband predistortion (BPD), which Nortel will begin installing in wireless networking products later this year, increases the efficiency of an amplifier chip that regulates the strength of the radio signal cell networks use. In tests last year, BPD increased the amplifier's efficiency by more than 50%, says Nortel's Murashige. That could extend the life of a cell-site battery from two hours to nearly three and cut the facility's operating costs (though a BPD setup will cost more to buy).
A technology that could help manage sudden spikes in call volume is a souped-up version of a vocoder, a chip that's already used to convert voice from analog to digital format. Developed by several companies, including Nortel and Qualcomm (QCOM), the latest version of the chip can do the task 25% faster, says InCode's Sanchez. It has already been tried out by the likes of No. 2 wireless provider Cingular.
SPECTRUM SQUEEZE. Still, many carriers say they alone can't solve their biggest reliability problem: Their capacity is limited by the amount of wireless spectrum they own. And spectrum is tough to find as it's already used by the police and radio stations, among others. What's more, many carriers are limited by local regulations: Fearful of fire hazards, for instance, New York City prohibits the installation of diesel-powered electricity generators in apartment buildings, where some cell towers are located. Verizon Wireless, the U.S.'s largest provider, hopes to pressure the city to change that, says a spokesperson.
Many carriers also point out that they don't have the money to prepare for every contingency. For instance, software that reroutes calls from a cell site that has failed to one nearby that's working can cost as much as $1 million per cell site per year just in licensing fees, estimates Sanchez. A service provider such as AT&T Wireless (AWE) has 30,000 cell sites nationwide, he figures. Equipping each one with one more feature would require $30 billion a year -- nearly double the company's 2002 revenues.
By the same token, though, increased reliability could pay off in greater customer satisfaction, which has long suffered in the cellular business for a wide variety of reasons. And the carriers could hold down costs by upgrading their networks in stages. What's for sure is that they'll have to do something because service outages of 15 to 40 hours, as occurred in the Northeast, are unacceptable, industry insiders say. And if wireless companies don't fix themselves, the government just might. By Olga Kharif in Portland, Ore.