I want to thank the Institute of Electrical
and Electronics Engineers for inviting me here this evening. I particularly
want to thank Roger Marks and Michael Heutmaker, who coordinated this event.
It's an honor to be speaking at RAWCON
'98. This is an impressive collection of wireless pioneers, from Barclay
Jones of WNP Communications, Inc. to Andrew Kreig, President of the Wireless
Communications Association International. Admittedly, given the title of
the conference, I was hoping for Mick Jagger or Carlos Santana.
The title is appropriate because wireless
industries are the "movers and shakers" in the telecommunications
arena. Wireless voice communications have expanded significantly in the
last five years. There is no doubt that wireless is now a viable competitor
to wired telephone service. Wireless technologies also hold the promise
for the future of data transfer. As we are rapidly becoming an Information
Society, wireless has significant potential to serve our information needs
- the subject I'd like to explore this evening.
First, think about the potential for mobile
phones to provide information services. Two of the fastest growing markets
today, and two of the drivers of our economy, are mobile wireless devices
and the Internet. One economist noted that we "have a huge revolution that
has been taking place in mobile phones. For the past two years, more than
one-half of the world's new telephone subscriptions have been to mobile
phones." The number of cellular users worldwide is expected to reach 550
million by 2001. Some analysts suggest that 50 million will use wireless
data services by 2001; others project that there will be 400 million using
wireless data services by that date.
In America today, one in five, or 60 million, now use a wireless phone. One in six uses a wireless pager. Wireless Week reported this month that, in the top ten markets in the U.S., 36.4 % - over one in three people -- owns a cellular phone. And a report just released by the Strategis Group predicted that wireless minutes of use in the U.S. will grow at a compound rate of 35% over the next five years.
My wife and I probably help skew these
averages: between the two of us, we now use 7 wireless devices. We each
have a personal PCS, an office cellular phone, a pager, and I often use
Ricochet to access Internet.
The growth of wireless services is even more striking in some foreign markets. In Hong Kong, for example, one-half the country is expected to have a cell phone by year 2000, up from 34% today. Every day in China, some 16,000 people buy mobile handsets. In Latin America, where wired services still have not reached more remote locations, cellular and PCS are the most dynamic industries in the telecommunications sector. According to a new strategic research report, the current $7.1 billion market is expected to triple by 2004.
Clearly, we have embraced the concept of
voice communication "any time, anywhere." At the same time, we have become
a society requiring ever-greater access to data services. Witness
the exponential growth of Internet. In five years, the Internet has changed
from a communications vehicle for academics and government agencies to
a vast network of communications and trade used by over 120 million people.
In June 1993, there were only 130 websites globally; as of December 1997,
there were 650,000 sites. According to a Department of Commerce report
issued in April, traffic on Internet is doubling every 100 days. Goods
and services sold online to US and European consumers this year will top
$5.1 billion, more than double the 1997 figure. And 2.7 trillion e-mails
were sent globally last year. Cisco Systems, which is making Internet growth
possible through its technology, now benefits greatly from Internet access
and sells up to $20 million of its products on-line in any given day.
These figures are daunting. On a practical
level, it means that many Americans now also want widespread and fast access
to data services. Real estate agents want to pull up information on a house
when they are in the field. Police officers need ready access to data on
a suspect they may be pursuing. Many of us would like to pull up stock
quotations while we are in transit and e-mail the home office or, simply,
those at home.
Mobile wireless devices are an obvious
medium to provide access to Internet in the future. They represent the
convergence of two of the fastest growing markets and developing technologies
in the telecommunications field. And there is a built-in demand for mobile
data services. Almost 80% of all mobile phone users also use Internet.
These users place a premium on flexibility, and will likely seize the opportunity
to access data through a mobile device. This next generation of services
(called the "third generation") is still being developed, but it won't
be long before Internet, e-mail, and video are all available over a mobile
phone.
Businesses already have shown the potential uses for wireless data services.
CVS Drug Store is now proving each employee
a hand-held mobile computer with a bar code laser scanner and a radio for
every day store operations. These devices can pull up the store's inventory,
the history of the item, and its price just by scanning the item.
Wireless data transmission can be especially
useful to customers with mobile work forces. When I flew out here, for
example, I sat next to an employee of Sysco Foods (not to be confused with
Cisco Systems). Sysco's truck drivers use a radio modem to ensure that,
when a restaurant orders food supplies, those supplies can be delivered
the following day. The same technology helps Sysco track its inventory
so that it can determine whether it can fill incoming orders. This technology,
he assured me, has resulted in invaluable savings in money and time through
increased efficiencies.
As another example, an auto insurance provider in Ohio reported that it is using two-way wireless data transmission to process claims on-site. The claims representatives can drive over to the accident site and call up a policy-holder's coverage, claim history, and other data right at the scene of the accident. As a result, these claims representatives no longer need to drive back to the office to deal with time-consuming paperwork.
These examples demonstrate that mobile
wireless devices can transform the way we work, as well as the way we live.
I am equally excited about the prospects
of fixed broadband wireless, such as MMDS and LMDS. Take LMDS, for example.
As you know, the FCC allocated a bandwidth of 1300 MHz in the 28-31
GHz range for LMDS, which it auctioned this past spring. This bandwidth
is by far the largest ever auctioned. To put it in perspective, it is 43
times the bandwidth obtained by winning bidders in the first broadband
PCS auctions.
The LMDS bandwidth has great potential
for offering a vast array of wireless services, far beyond one-way, multichannel
video programming. LMDS offers a possible conduit for high speed data and
Internet access, as well as local telephone service. In fact, Pioneer Consulting
predicted last week that the LMDS market will earn $6.5 billion by year
2000 in the high speed data service market.
I hope that these technologies will not
only be used by the high-end business market, but also in homes, schools,
hospitals, and in rural communities. Broadband wireless may be the solution
we need to fix the "last mile" problem. As more of us are using fax lines,
Internet, and second phone lines at home, we will need a bigger pipeline
to connect these services to our houses. According to the Strategis Group,
in the next 5 years, the number of businesses using broadband services
will triple and number of households will increase ninefold.
Fixed wireless has the potential to handle high quantities of data and
provide that last connection to the home or office.
Wireless will also change the way we work
at home or in the office. Take, for example, my alma mater Stanford
University. Stanford, as with a number of other universities, has built
a wireless network on the campus that enables students to access data services
from any point on the campus. A student can now sit under a tree with a
laptop and research an assignment on Internet. No longer is there a need
to find that kiosk with torn posters; you can find campus events on intranet
at any time. I look forward to the day when I won't need to search for
that seat on Amtrak with a plug for my laptop or find that airport phone
with a dataport. I'll merely be able to sit down and start working.
As with mobile wireless, there are numerous
applications for data access using fixed wireless. Utility companies will
be able to get readings from meters. Vendors can monitor when vending machines
run low. A petroleum company is now using a cellular-based system to check
the corrosion of gas and oil pipelines in remote areas.
And, of course, wireless technologies offer
the promise of providing basic telephone service through the "wireless
local loop." This service is now deployed in other countries such as China,
India, and the United Kingdom. At a Wireless Local Loop Forum that NTIA
held last December , we heard how "wireless local loops" are providing
the only connection in certain foreign regions, particularly in remote
and rural areas that are too costly to wire. In sub-Saharan Africa, for
example, only one in three hundred people has a telephone. Wireless will
allow less developed countries to leapfrog traditional poles and wires
as they connect their citizens.
We hope that wireless operators will soon
provide the same service in the United States. The "wireless local loop"
would serve two important goals of the Clinton Administration: competition
and universal service. We expect that, with the ever-rising use of mobile
communications, the wireless loop can provide a real alternative to traditional
telephone service. The "wireless local loop" could also provide the solution
we need to reach our underserved and rural communities, many of which still
lack traditional phone service. Only fifty percent of the households in
the Oglala Sioux Tribe in South Dakota, for example, have traditional telephone
service. These households, like many others in Indian communities, would
benefit from a wireless local loop connection.
We know that wireless may be far more cost
efficient than wired telephone service in providing local loop connections.
We also know that wireless technologies promise connectivity that is forty
times faster than today's computer modems. The main obstacle to wider use
of wireless data is bringing the wireless Net experience up to the level
of Net access by telephone, which in itself falls short of consumer expectations.
I also realize that certain costs, such
as the cost of terminal equipment, may still prevent some wireless services
from being used on a broad scale. We need to figure out how to lower these
costs to make wireless technology more widely available. That is why I
think the work of N-WEST (the National Wireless Electronics Systems Testbed)
is so important.
N-WEST is a collaborative effort of the
Department of Commerce's NTIA and National Institute of Standards and Technology
(NIST) that just got off the ground. In fact, its kickoff meeting was held
downstairs yesterday and, I believe, some members may be here tonight.
N-WEST is providing technical expertise to assist standardization efforts
by the LMDS industry.
Let me clarify that the Department of Commerce
is not mandating standards for LMDS. In the third-generation wireless
context, for example, the International Telecommunication Union (ITU) is
studying potential standards for 3-G technologies. For third generation
standards, the U.S. is recommending several standards that reflect the
multiple technologies now in place for cellular and PCS in the United States.
Our general position is that government mandates in this area can only
interfere with progress and innovation.
N-WEST is playing a different role, however,
by assisting and evaluating industry efforts to reach a consensus
on standards. The theory is that, if there is greater standardization of
customer equipment, that equipment is more likely to be sold on a mass
market basis. Collaboration within the industry could help lower the cost
of user terminals and, I hope, make broadband wireless an accessible alternative
for more Americans.
I encourage you to look into the work of
N-WEST. Another thing I hope you'll explore is the "Year 2000" problem
-- that is, we need to be sure that our computers will be able to process
the double zeros when we reach January 1, 2000 so that our systems can
continue to function. There are estimates that it may take $600 billion
nationally, and $1.3 trillion globally, to prepare our computer systems
for the new millennium. This cost would be dwarfed, however, by the amount
incurred if there were system malfunctions. Despite the immensity of this
problem, a recent survey reported that only 80% of small businesses are
aware of the problem and only 50% intend to do something about it. We need
to reverse these trends. I encourage you to talk to your vendors, your
sellers, your partners, and your collaborators about this issue.
As we prepare for the new millennium, we must consider all steps to provide broadband services to homes and public facilities on a far-reaching basis. You will help make the next century the "wireless century." And, when you look at the news reports about the American economic miracle, think of the role that each of you is playing in keeping that miracle alive.
Thank you.