Managing Innovation Cases from the Services Industries (1988) / Chapter Skim
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Cellular Mobile Telephone Services
Cellular Mobile Telephone Services
Pages 144-164
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From page 144... ...
At a time when conventional mobile telephone service was available only to an elite few, the cellular concept promised a thousandfold increase in the availability of the service in the United States, but its birth encountered significant delays before it became a reality. Ultimately, more than a decade passed from initial proposals to implementation.
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From page 145... ...
Thus, the early mobile service was much like the operator-based service provided by telephone companies before automatic dialing systems were available. As mobile service expanded, various technological advances combined to make it operationally comparable to the improving land-based telephone service.
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From page 146... ...
As illustrated in Figure 1, the order proposed the allocation of intervals 64 MHz for cellular telephone service, 40 MHz for private mobile service, and 11 MHz for air and ground service. In addition, the FCC asked for recommendations on how this large amount of spectrum could be used most efficiently and for the greatest public good.
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From page 147... ...
As a vehicle travels from one cell to another, the call in progress is automatically and imperceptibly "handed-off" to the next transmitter and a ~rat rl _ / L ~ '\~ \ |
From page 148... ...
A number of private mobile users filed comments, requesting frequencies for their particular service and attacking the viability of cellular service. Interestingly, Motorola, which was to become a pioneer in cellular development, was also the dominant supplier of private systems and generally favored the latter in allocation proceedings.
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From page 149... ...
As a result, in March 1975 the FCC issued its "final" order, 6 changing the allocation to: · 40 MHz for any Common Carrier that qualifies to provide a single cellular system per market area; · 30 MHz for private mobile systems; and · 45 MHz held in reserve. The RCC industry, still dissatisfied, took the FCC's order to court.
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From page 150... ...
Although affirming the FCC's order, it reserved judgment on whether the plan would result in a breach of the antitrust laws thus inviting further litigation "down the road." Further, the court noted that because the FCC order provided for only one system to be authorized per market area, it was clear that applicants filing mutually exclusive applications for the same cities would cause lengthy hearing proceedings followed by appeals in virtually every large city in the country. At about that time, Congress took an interest in the problem, and in 1979, in an appearance before a House Subcommittee, AT&T proposed a new division of the spectrum intended to answer the Court of Appeals concerns and bring the service to market more quickly.
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From page 151... ...
These changes, "hammered out" over a decade of debate, led to changing technical standards, new commitments, new cost assumptions, and, ultimately, to a new industry concept for cellular deployment throughout the United States. System Trials and Adoption of Technical Standards During the regulatory process previously discussed, the FCC attempted to confirm the validity and necessary standards for commercial cellular service by requiring developmental "trials" of the cellular concepts.
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From page 153... ...
ad hoc committee and covered issues of interface compatibility between mobile units of competing systems. The standards were proposed to the FCC, which adopted them as part of its 1982 order.
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From page 154... ...
area by an RCC system that was owned by a consortium of the Washington Post Company, Metromedia, and other local groups. A few months later, in April 1984, Bell Atlantic Mobile Service, Inc., an RHC cellular subsidiary, also began service in the Washington/Baltimore area, making it the first competitive market area in the United States.
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From page 155... ...
During this period of evolution in the industry, three major industry groups were also evolving in their roles within the cellular industry. The first, the Electronic Industries Association (EIA)
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From page 156... ...
This issue became extremely complicated as the consolidation of market ownership began to take place in 1985, when a WLCC, Pactel Mobile Access Company, purchased the ownership of an RCC owned by Metromedia in the San Francisco market. Once Pactel received approval for this acquisition a flurry of acquisitions took place, essentially blurring the distinction between WLCC and RCC in the spectrum that had been so laboriously segmented by the regulatory process.
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From page 157... ...
Although price wars between competitors and special price packages have reduced rates in different markets at different times, they have also stimulated the markets, and the net effect has been positive. Based on the results of the AT&T market trial in Chicago described earlier, the conventional estimate of market potential for cellular at the time of the first application filings was 2 percent of the population.
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From page 158... ...
The Cellular Manufacturing Industry The industry of equipment manufacturers who design and build the systems and the mobile units grew in parallel with the development of the cellular service industry. In the United States AT&T and Motorola became the major suppliers of systems, each supplying more than 30 percent of the current installed systems (the AT&T systems tend to be in larger cities, giving AT&T the greater share of equipment sales)
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From page 159... ...
1959 AT&T Bell Labs proposes high-capacity mobile system at 35 MHz 1964 Bell System initiates first improved mobile telephone service at 150 MHz (full duplex operation) 1968 FCC orders inquiry to reallocate UHF-TV channels 70-83 for mobile radio use 1969 Bell System initiates first improved mobile telephone service at 450 MHz (full duplex operation)
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From page 160... ...
vat 1974 AT&T excluded from mobile unit market 1975 AT&T files for developmental cellular system in Chicago vat 1976 ARTS files for developmental cellular system in Washington, DC 1979 AT&T Bell Labs proves in cellular concepts at Newark, NJ, cellular test bed 1979 AT&T's Chicago developmental system operational 1980 FCC opens inquiry to establish policy and rules for commercial cellular service 1981 AT&T allowed to reenter mobile unit market 1981 ARTS' Washington developmental system operational 1982 Motorola introduces first hand-held cellular terminal 1982 FCC issues order to make commercial cellular service possible. Allows 2 cellular systems per market area with 20 MHz bandwidth allocated for each system 1982 EIA technical standards for cellular interconnection and nationwide service adopted by FCC ~ continued
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From page 161... ...
AT&T interests relegated to that of manufacturer 1984 Bell Atlantic Mobile offers first competing system in Washington, DC 1985 Pactel Mobile Access purchases RCC 1987 AT&T Bell Labs proposes compatible nextgeneration digital cellular system 1987 FCC opens inquiry on new cellular technologies 1987 One million subscribers using cellular service 161 Background Technology Development System Tnals Regulatory and Adoption Arena of Standards vie requiring more spectrum, narrower channels, and even smaller cells than were originally planned. Current systems were specified and designed during the 1970s and new opportunities such as narrow-band digital channels and distributed-control architectures have become possible.
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From page 162... ...
F Johnson GE Hitachi NEC Mitsubishi Mobira Motorola NovAtel OKI Panasonic Tandy Toshiba Walker on a path to the future, and the need to coexist with today's systems and mobile units makes every new path complex and thus expensive for the developer.
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From page 163... ...
TNA has continually complained that, despite a clear FCC mandate to do so, the local exchange companies have resisted providing the RCCs with the type of interconnection arrangements they desire.
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From page 164... ...
A high capacity mobile telephone system overview. Bell Telephone Laboratories, September 16, 1969 (private document)
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