Business Articles

No End in Sight

Wireless penetration has hit an all time high, and while the rate of growth may slow, the wireless industry as a whole is likely to still expand for quite some time.

Kagan Research, a consulting and publishing firm based in Monterey, CA, predicts that the U.S. wireless telephone market will grow 48% before the end of 2014. That means the total number of subscribers would increase from 185 million to 274 million and 83% of the U.S. adult population would own a cell phone.

Good news. ■

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A Fool and His (or Her) Money

IT IS NOT UNCOMMON these days to hear about some city (small or large) making plans to own and/or operate a wireless Internet network. “Bringing high-speed access to the masses,” is a common refrain heard from civic leaders. On face value the promise seems appealing, but the more I think about it, the more this idea loses its luster.

If these wireless networks are providing service to areas where high-speed Internet access does not already exist, that’s fine. If these wireless networks are intended for areas of the city where private companies have no immediate plans to provide this service in the future, that too is fine. Even if the city wants to provide high-speed wireless access to parks or recreational areas where visitors can use their laptops and PDAs, I’m okay with that, too. But if tax dollars are being used to compete against private enterprise (intentionally or otherwise), I am opposed to that.

Frankly, the use of public funds in this manner has been a pet peeve of mine for quite some time. I started feeling this way several years ago when my local library began carrying videos in addition to books. This also seemed like a good idea at first. A library is a place where a person should be able to get an educational or instructional film, or maybe even a classic movie not readily available from the neighborhood video store. This is not what happened, though. No, they had another idea in mind.

The first, and by far the most popular videos in the batch included The Blues Brothers, When Harry Met Sally, and A Fish Called Wanda. While these are all exceptional movies, they are not instructional and they can not be considered classics (with the possible exception of Blues Brothers). By lending these movies at no direct cost to local residents, the library (funded by taxpayers) was hurting every business in town that rented videos for a fee.

I do believe government should provide services we the people can not easily or readily provide for ourselves. But for many of us, I’m not sure high-speed Internet access is one of them. Besides, does anyone believe they can do it better or cheaper than the private sector? ■

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End of the Road

LIKE PAYPHONES, emergency call boxes are starting to vanish from America’s highways. Thanks in large part to the proliferation of cell phones, states and local government agencies are removing the call boxes all over America.

In December the Rhode Island Department of Transportation announced they are going to do away with all call boxes entirely. The decision to remove the antiquated call boxes will save the people of Rhode Island over $1 million (roughly $7,000 per call). It also brings to an end the dangerous practice of motorists walking along the high-speed interstate highway in order to make a phone call for assistance.

More recently in New Jersey, transportation officials are reviewing whether roadside call boxes should be pulled. Pennsylvania , California, Illinois, Massachusetts, and Louisiana are also removing call boxes in their states.

It is only a matter of time before the evening news does a nostalgic piece on the last call box in America. ■

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One for You, 19 For Me

HE'S THE TAX MAN...and boy does he love cell phones.

Last year cell phone subscribers paid a whopping $17.8 billion in federal, state and local taxes according to The New York Times. Those taxes increased nine times faster than the taxes on other goods and services between January 2003 and April 2004 according to Forbes magazine.

USA Today claims many states and local governments consider new cell phone taxes necessary because the number of standard wired phone lines that have dropped nationwide. The article cites statistics from the Federal Communications Commission (FCC) that say the number of wired phone lines in the U.S. dropped from 167 million in 2000 to 132 million in 2004.

To combat this alarming trend the Cellular Telecommunications and Internet Association (CTIA) is fighting back with a big public relations blitz and the launch of a new web site called StopAddingtoMyBill.com.

The new web site aims to educate consumers and government officials. For example, it explains that fees and surcharges consumers pay for using a cell phone are nearly twice as high as those paid when buying taxable items at a local hardware store. New York, Florida, Washington, Illinois, and Nebraska are the worst offenders, adding more than 20% to the typical monthly cellular telephone bill.

“The local governments are singling out wireless subscribers because there are a lot of them,” said John Walls recently. He is the CTIA vice president for public relations. “This is arbitrary and discriminatory. It is a grossly unfair burden on consumers. They are putting the brakes on a significant driver (of) the economy.”

And how. ■

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The Beginning of the End

THE ERA OF THE PAY PHONE is coming to an end for most Americans. What was once a valuable tool and an equally common fixture on the streets of America is now vanishing from the urban landscape. Cellular telephone coverage, however, has still eluded some of our country's more rural areas and there are people fighting to keep pay phones operational in their communities.

A recent article in the New York Times reveals that some small towns, such as South Ackworth, NH, have no other choice but to rely on their clumsy, dirty pay phone.

The phone (in South Ackworth) was the first in New Hampshire to be protected under a state law passed in July. The law sprang from the 1996 federal telecommunications act, which deregulated pay phones but allowed states to enact "public interest" laws to save endangered phones. At least eight states have similar laws, including New York, California and Maine, which also enacted its law this year.

New York Times | New York, NY | 10/11/2005

The article is an excellent reminder that while wireless telephone coverage is as pervasive as shopping malls and fast food joints, the cellular telephone industry still has a ways to go before it can boast truly seamless, nationwide coverage. ■

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Time Will Tell

LAST JUNE THE CITIZNES of Caledonia, MN (the wild turkey capital of the world) buried a time capsule at their municipal auditorium to mark the city's 100th anniversary. It included letters to future residents, important documents, a DVD, a disposable camera...and a cellular telephone.

I wonder what the future caretakers of Caledonia will think when they pull a cell phone out of the time capsule 50 years from now. Did our parents and grandparents predict a day when a majority of us would all be using wireless telephones? A few employees at Motorola might have had that image dancing in their heads, but most people probably did not.

Fifty years ago the U.S. was moving beyond the specter of World War II and stepping onto the threshold of the Korean War. Our country was testing the fusion bomb and preparing for the day it may be used against us. The first jet airliner was entering commercial service, Francis Clark and James Watson were ready to discover the helical structure of DNA and Sputnik was still on the Soviets' drawing board. A lot has changed since then.

Fifty years from now wireless telephony will certainly change. Some amateur prophets predict satellite telephones will replace terrestrial-based wireless systems. Some believe land lines will vanish. Still others see a day when the computer, television, and cellular telephone will mutate into one grand device.

I'm not so sure if any of these predictions will occur. Instead, I offer my own predictions. I believe within 50 years the pay phone will vanish and become little more than a novelty. I believe wireless telephony and wireless broadband data will merge. I believe antennas will be only 25 to 40 feet above ground (except in the most rural areas) and base station equipment will be the size of miniature refrigerator (or smaller). I also believe the use of cash will become an oddity and our new cell phones will be used for monetary transactions instead of cash.

The only things certain in life are death, taxes and change. And the wireless industry is destined to change, just as it has ever since Guglielmo Marconi built the first wireless telegraph in 1896. How will it change? Time will tell. ■

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The Paperless Utopia

I RECEIVED MY FOURTH COPY of the magazine AGL this week. If you have not yet seen this magazine, I urge you to get a copy as soon as possible. It is the first magazine truly dedicated to tower owners and the site development industry. The man in charge of the magazine is Don Bishop , formerly the editor of MRT magazine. He is among the most experienced and knowledgeable journalists in our industry today.

While I love reading AGL and look forward to receiving my new issue every month, I don’t know if a magazine tailored to our small niche of the industry can be successful.

AGL comes at a time when the Boston Globe is announcing steep overall declines in circulation. The New York Times, otherwise known as the Gray Lady, is also seeing declining growth. Circulation of the Los Angeles Times has plunged 5.5% in just one year. And Dow Jones & Co. reported that earnings fell 54 percent this year as its online operations earned more than the Wall Street Journal newspaper and Barron's magazine.

Earlier this year the Carnegie Corporation of New York released a report that shed some light on this very issue and the future of how news and information will be delivered to consumers. The report showed that 18 to 34 year olds are increasingly retreating from newspapers and magazines to receive their news. More and more adults are looking online for their information. All of this will have a huge impact on trade journals, too, and especially those just starting.

Few of us can forget how badly the wireless telecommunications industry was hurt a few short years ago after 9/11. Telecommunications companies slashed budgets and advertising sales at trade journals slumped. I can remember Wireless Week going on a brief hiatus and only publishing once every other week until it could reorganize itself. All trade journals and magazines that cater to our industry were affected just as much as the wireless carriers and vendors.

Perhaps AGL should consider publishing its product exclusively online and delivering it to its readers via E-mail instead. The cost of printing a four-color magazine and sending it out to subscribers (often free of charge) can not be cheap. This is superb magazine and I hope it is available to read for a long time to come. Using the wonders of technology to do so seems like a good way to accomplish that...especially when covering an industry already comfortable with technology. ■

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Cutting the Cord

YEARS AGO, just after the FCC completed the first round of the PCS auctions, I remember people predicting the day when cell phones would replace land lines. At the time only 100 million people used cell phones worldwide and the prospect of landlines being replaced didn’t seem too likely. A decade and one billion wireless subscribers later, I think we are now on the cusp of that day soon coming.
According to a recent article in the Chicago Tribune, "a shift from wired communications to wireless has cost traditional phone companies such as SBC Communications dearly in lost business and revenue, and analysts suggest the trend is accelerating."

College campuses are among the first institutions to abandon land lines, which is ironic if any of you have faced the difficulty of siting an antenna facility on a university campus. American University, for example, will soon eliminate traditional phone service in its residence halls. So too will Marshall University. And the student directory at James Madison University lists mostly cell phone numbers from out of state. Still other universities, who once relied on telephone service in its residence halls as a cash cow, are "evaluating other options."

Gartner, Inc., a New Jersey think tank, figures up to 10 percent of nation's cell phone users have already cut the cord. In-Stat, a Scottsdale, AZ market research firm further states that wired expenditures topped $188 billion in 2003, but will shrink to about $160 billion by the end of 2008. And The Diffusion Group predicts U.S. wireless penetration will hit 75% by the year 2010.

So as Americans cut the cord at work and at home, as payphones begin to vanish, and as 9 out of 10 college students will attend classes this fall with cell phones, one has to wonder how long it will be before everyone cuts the cord. ■

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