The New Rule of Wireless

At first glance, Vahak Hovnanian, a homebuilding tycoon in New Jersey, would seem an unlikely sort to be chasing rainbows. Yet in the converging realms of computers and communications that we call the telecosm, rainbows are less a matter of hue and weather than they are a metaphor for electromagnetism: the spectrum of wavelengths and frequencies used to build businesses in the Information Age.

An Armenian Christian from Iraq, Hovnanian ran a business building high-quality “affordable” housing. His first coup came on Labor Day in 1958 when, together with his three older brothers, he bought an apparently undesirable property near the waterfront in Tom’s River for $20,000. From this modest beginning has arisen not only one of the nation’s largest homebuilding enterprises (divided among the four immigrant brothers), but also a shattering breakthrough on some seemingly bleak frontiers of the electromagnetic spectrum. Together with maverick inventor Bernard Bossard, Hovnanian has launched a wireless cellular TV business in frequencies once thought usable only in outer space.

Perhaps the reason Hovnanian feels comfortable today pioneering on the shores of the telecosm is that some 35 years ago he was an engineer at Philco Semiconductor following in the theoretical steps of AT&T Bell Laboratories titan William Shockley. Shockley led the team that plunged into the microcosm of solid-state physics and invented the transistor. At the heart of all-digital electronics, this invention still reverberates through the world economy and imposes its centrifugal rules of enterprise.

This law of the microcosm dictates exponential rises in computer efficiency as transistors become smaller. It is this law that drives the bulk of the world’s computations to ever- cheaper machines and pushes intelligence from the center to the fringes of all networks. Today the microcosm is converging with the telecosm and igniting a new series of industrial shocks and surprises.

The convergence of microcosm and telecosm in an array of multimedia industries – from personal intelligent communicators to video teleputers to digital films and publishing – is now the driving force of world economic growth. John Sculley, chairman and CEO of Apple Computer, has projected that by 2002 there will be a global business in multimedia totaling some $3.5 trillion – close to the size of the entire U.S. economy in the early 1980s.

This new world of computer communications will break down into two domains – the fibersphere and the atmosphere. The fibersphere is the domain of all-optical networks, with both communications power – bandwidth – and error rate improving by factors in the millions. In “Into the Fibersphere” (Forbes ASAP, December 7, 1992), we saw that the potential capacity for communications in the fibersphere is 1,000 times greater than all the currently used frequencies in the air – and so radically error-free that it mandates an entirely new model of wired telecommunications. Now we will discover that the atmosphere will offer links as mobile and ubiquitous as human beings are. It thus will force the creation of an entirely new model of wireless networks.

In one sense, Sculley’s $3 5 trillion dream can be seen as the pot of gold at the end of Maxwell’s rainbow. In 1865, in a visionary coup that the late Richard Feynman said would leave the American Civil War of the same decade as a mere “parochial footnote” by comparison, Scottish physicist James Clerk Maxwell discovered the electromagnetic spectrum. Encompassing nearly all the technologies imagined by Sculley, Maxwell’s rainbow reaches from the extremely low frequencies (and gigantic wavelengths) used to communicate with submarines all the way through the frequencies used in radio, television and cellular phones, on up to the frequencies of infrared used in TV remotes and fiber optics, and beyond that to visible and ultraviolet light and X- rays. In a fabulous feat of unification, Maxwell reduced the entire spectrum to just four equations in vector calculus. He showed that all such radiations move at the speed of light – in other words, the wavelength times the frequency equals the speed of light. These equations pulse at the heart of the information economy today.

Virtually all electromagnetic radiation can bear information, and the higher the frequencies, the more room they provide for bearing information. As a practical matter, however, communications engineers have aimed low, thronging the frequencies at the bottom of the spectrum, comprising far less than one percent of the total span.

The vast expansion of wireless communications forecast by Sculley, however, will require the use of higher frequencies far up Maxwell’s rainbow. This means a return to the insights of another great man who walked the halls of Bell Labs in the late 1940s at the same time as future Nobel laureate William Shockley, and who left the world transformed in his wake.

In 1948, the same year that Shockley invented the transistor, Claude Shannon invented the information theory that underlies all modern communications. At first encounter, information theory is difficult for nonmathematicians, but computer and telecom executives need focus on only a few key themes. In defining how much information can be sent down a noisy channel, Shannon showed that engineers can choose between narrowband high-powered solutions and broadband low-powered solutions.

From Long & Strong to Wide & Weak

Assuming that usable bandwidth is scarce and expensive, most wireless engineers have strived to economize on it. Just as you can get your message through in a crowded room by talking louder, you can overcome a noisy channel with more powerful signals. Engineers therefore have pursued a strategy of long and strong: long wavelengths and powerful transmissions with the scarce radio frequencies at the bottom of the spectrum.

Economizing on spectrum, scientists created mostly analog systems such as AM radios and televisions. Using every point on the wave to convey information and using high power to overcome noise and extend the range of signals, the long and strong approach seemed hugely more efficient than digital systems requiring complex manipulation of long strings of on-off bits.

Ironically, however, the long and strong policy of economizing on spectrum led to using it all up. When everyone talks louder, no one can hear very well. Today, the favored regions at the bottom of the spectrum are so full of spectrum- hogging radios, pagers, phones, television, long-distance, point- to-point, aerospace and other uses that heavy-breathing experts speak of running out of “air.”

Shannon’s theories reveal the way out of this problem. In a counterintuitive and initially baffling redefinition of the nature of noise in a communications channel, Shannon showed that a flow of signals conveys information only to the extent that it provides unexpected data – only to the extent that it adds to what you already know. Another name for a stream of unexpected bits is noise. Termed Gaussian, or white, noise, such a transmission resembles random “white” light, which cloaks the entire rainbow of colors in a bright blur. Shannon showed that the more a transmission resembles this form of noise, the more information it can hold.

Shannon’s alternative to long and strong is wide and weak: not fighting noise with electrical power but joining it with noiselike information, not talking louder but talking softer in more elaborate codes using more bandwidth. For example, in transmitting 40 megabits per second – the requirement for truly high-resolution images and sounds – Shannon showed some 45 years ago that using more bandwidth can lower the needed signal-to- noise ratio from a level of one million to one to a ratio of 30.6 to one. This huge gain comes merely from increasing the bandwidth of the signal from two megahertz (millions of cycles per second) to eight megahertz. That means a 33,000-fold increase in communications efficiency in exchange for just a fourfold increase in bandwidth.

Such an explosion of efficiency radically limits the need to waste watts in order to overcome noise. More communications power comes from less electrical power. Thus, Shannon shows the way to fulfill Sculley’s vision of universal low-powered wireless communications.

This vision of wide and weak is at the heart of the most promising technologies of today, from the advanced digital teleputer sets of American HDTV to ubiquitous mobile phones and computers in so-called personal communications networks (PCNs). Shannon’s theories of the telecosm provide the basic science behind both Sculley’s dream and Hovnanian’s video spectrum breakthrough.

Shannon’s world, however, is not nirvana, and there is no free lunch. Compensating for the exponential rise in communications power is an exponential rise in complexity. Larger bandwidths mean larger, more complex codes and exponentially rising burdens of computation for the decoding and error-correcting of messages. In previous decades, handling 40 megabits per second was simply out of the question with existing computer technology. For the last 30 years, this electronic bottleneck has blocked the vistas of efficient communication opened by Shannon’s research.

In the 1990s, however, the problem of soaring complexity has met its match – and then some – in exponential gains of computer efficiency. Not only has the cost-effectiveness of microchip technology been doubling every 18 months but the pace of advance has been accelerating into the 1990s. Moreover, the chips central to digital communications – error correction, compression, coding and decoding – are digital signal processors. As we have seen, the cost-effectiveness of DSPs has been increasing – in millions of computer instructions per second (MIPS) per dollar – some tenfold every two years.

This wild rush in DSPs will eventually converge with the precipitous plunge in price-performance ratios of general-purpose microprocessors. Led by Silicon Graphics’ impending new TFP Cray supercomputer on a chip, Digital Equipment’s Alpha AXP device and Hewlett Packard’s Precision Architecture 7100, micros are moving beyond 100-megahertz clock rates. They are shifting from a regime of processing 32-bit words at a time to a regime of processing 64-bit words. This expands the total addressable memory by a factor of four billion. Together with increasing use of massively parallel DSP architectures, these gains will keep computers well ahead of the complexity problem in broadband communications.

What this means is that while complexity rises exponentially with bandwidth, computer efficiencies are rising even faster. The result is to open new vistas of spectrum in the atmosphere as dramatic as the gains of spectrum so far achieved in the fibersphere.

Attacking Through the Air

Hovnanian’s campaign into the spectrum began when a cable company announced one day in 1985 that under the Cable Act of 1984 and franchise rights granted by local governments, it had the right to wire one of his housing developments then under construction. Until that day, Hovnanian’s own company could package cable with his homes through what are called satellite master antenna TV systems. In essence, each Hovnanian development had its own cable head end where programs are collected and sent out to subscribers.

When the cable company, now Monmouth Cable Vision, went to court and its claim was upheld by a judge, Hovnanian sought alternatives. First he flirted with the idea of having the phone company deliver compressed video to his homes. In 1986, in the era before FCC Commissioner Alfred Sikes, that was both illegal and impractical. Then he met Bernard Bossard and decided to attack through the air. An early pioneer in microchips who had launched a semiconductor firm and eventually sold it to M/A COM, Bossard was familiar with both the soaring power of computers and the murky problems of broadband noise that have long restricted the air to a small number of broadcast AM TV stations.

Air delivery of cable television programming had long seemed unpromising. Not only was there too little spectrum available to compete with cable, but what spectrum there was, was guarded by the FCC and state public utilities commissions. Nonetheless, in the early 1990s “wireless cable” did become a niche market, led by Microband Wireless Cable and rivals and imitators across the land. Using fragments of a frequency band between 2.5 and 2.7 gigahertz (billions of cycles per second), Microband, after some financial turmoil, now profitably broadcasts some 16 channels to 35,000 New York City homes in line of sight from the top of the Empire State Building. As long as they are restricted to a possible maximum of 200 megahertz and use AM, however, wireless firms will not long be able to compete with the cable industry. Cable companies offer an installed base of potential gigahertz connections and near universal coverage.

Having spent much of his life working with microwaves for satellites and the military, Bossard had a better idea. He claimed he could move up the spectrum and pioneer on frontiers of frequency between 27.5 and 29.5 gigahertz, previously used chiefly in outer space. That would mean he could command in the air some half a million times the communications power, or bandwidth, of typical copper telephone links, some ten times the bandwidth of existing wireless cable, some four times the bandwidth of the average cable industry coaxial connection, and twice the bandwidth of the most advanced cable systems.

The conventional wisdom was that these microwaves (above about 12 gigahertz) are useless for anything but point-to-point transmissions and are doubtful even for these. For radio communication, the prevailing folklore preferred frequencies that are cheap to transmit long distances and that can penetrate buildings and tunnels, bounce off the ionosphere or scuttle across continents along the surface of the earth. The higher the frequency, the less it can perform these feats essential to all broadcasting – and the less it can be sent long distances at all.

Moreover, it was believed, these millimeter-sized microwaves not only would fail to penetrate structures and other obstacles but would reflect off them and off particles in the air in a way that would cause hopeless mazes of multipath. Multipath would be translated into several images, i.e., ghosts, on the screen.

Finally, there was the real show-stopper. Everyone knew that these frequencies are microwaves. The key property of microwaves, as demonstrated in the now ubiquitous ovens, is absorption by water. Microwaves cook by exciting water molecules to a boil. Microwave towers are said to kill birds by irradiating their fluids. Microwave radar systems won’t work in the rain. Mention microwaves as a possible solution to the spectrum shortage, and everyone – from editors at Forbes to gurus at Microsoft, from cable executives to Bell Labs researchers – laughs and tells you about the moisture problem.

So it was no surprise that when in 1986 Bossard went to M/A COM and other companies and financiers with his idea of TV broadcasting at 28 gigahertz, he was turned down flat. Amid much talk of potential “violations of the laws of physics,” jokes about broiling pigeons and warnings of likely resistance from the FCC, he was spurned by all. In fairness to his detractors, Bossard had no license, patent or prototype at the time. But these holes in his plan did not deter Vahak Hovnanian and his son Shant from investing many millions of dollars in the project. It could be the best investment the Hovnanian tycoons ever made.

New Rule of Radio

For 35 years, the wireless communications industry has been inching up the spectrum, shifting slowly from long and strong wavelengths toward wide and weak bands of shorter wavelengths. Mobile phone services have moved from the 1950s radio systems using low FM frequencies near 100 megahertz, to the 1960s spectrum band of 450 megahertz, to the current cellular band of 900 megahertz accommodating more than 10 million cellular subscribers in the U.S.

During the 1990s, this trend will accelerate sharply. Accommodating hundreds of millions of users around the world, cellular communications will turn digital, leap up the spectrum and even move into video. Shannon’s laws show that this will impel vast increases in the cost-effectiveness of communications.

In general, the new rule of radio is the shorter the transmission path, the better the system. Like transistors on semiconductor chips, transmitters are more efficient the more closely they are packed together. As Peter Huber writes in his masterly new book, The Geodesic Network 2, the new regime favors “geodesic networks,” with radios intimately linked in tiny microcells. As in the law of the microcosm, the less the space, the more the room.

This rule turns the conventional wisdom of microwaves upside down. For example, it is true that microwaves don’t travel far in the atmosphere. You don’t want to use them to transmit 50,000 watts of Rush Limbaugh over 10 midwestern states, but to accommodate 200 million two-way communicators will require small cells; you don’t want the waves to travel far. It is true that microwaves will not penetrate most buildings and other obstacles, but with lots of small cells, you don’t want the waves to penetrate walls to adjacent offices.

Microwaves require high-power systems to transmit, but only if you want to send them long distances. Wattage at the receiver drops off in proportion to the fourth power of the distance from the transmitter. Reducing cell sizes as you move up the spectrum lowers power needs far more than higher frequencies increase them. Just as important, mobile systems must be small and light. The higher the frequency, the smaller the antenna and the lighter the system can be.

All this high-frequency gear once was prohibitively expensive. Any functions over two gigahertz require gallium arsenide chips, which are complex and costly. Yet the cost of gallium arsenide devices is dropping every day as their market expands. Meanwhile, laboratory teams are now tweaking microwaves out of silicon. In the world of electronics – where prices drop by a third with every doubling of accumulated sales – any ubiquitous product will soon be cheap.

The law of the telecosm dictates that the higher the frequency, the shorter the wavelength, the wider the bandwidth, the smaller the antenna, the slimmer the cell and ultimately, the cheaper and better the communication. The working of this law will render obsolete the entire idea of scarce spectrum and launch an era of advances in telecommunications comparable to the recent gains in computing. Transforming the computer and phone industries, the converging spirits of Maxwell, Shannon and Shockley even pose a serious challenge to the current revolutionaries in cellular telephony.

The New PC Revolution: PCN

Many observers herald the huge coming impact of wireless on the computer industry, and they are right. But this impact will be dwarfed by the impact of computers on wireless.

In personal communications networks (PCN), the cellular industry today is about to experience its own personal computer revolution. Just as the personal computer led to systems thousands of times more efficient in MIPS per dollar than the mainframes and minicomputers that preceded it, PCNs will bring an exponential plunge of costs. These networks will be based on microcells often measured in hundreds of meters rather than in tens of miles and will interlink smart digital appliances, draining power in milliwatts rather than dumb phones using watts. When the convulsion ends later this decade, this new digital cellular phone will stand as the world’s most pervasive PC. As mobile as a watch and as personal as a wallet, these PICOs will recognize speech, navigate streets, take notes, keep schedules, collect mail, manage money, open the door and start the car, among other computer functions we cannot imagine today.

Like the computer establishment before it, current cellular providers often seem unprepared for this next computer revolution. They still live in a world of long and strong – high- powered systems at relatively low frequencies and with short- lived batteries – rather than in a PCN world of low-power systems at microwave frequencies and with batteries that last for days.

Ready or not, though, the revolution will happen anyway, and it will transform the landscape over the next five years. We can guess the pattern by considering the precedents. In computers, the revolution took 10 years. It began in 1977 when large centralized systems with attached dumb terminals commanded nearly 100 percent of the world’s computer power and ended in 1987 with such large systems commanding less than one percent of the world’s computer power. The pace of progress in digital electronics has accelerated sharply since the early 1980s. Remember yesterday, when digital signal processing (DSP) – the use of specialized computers to convert, compress, shape and shuffle digital signals in real time – constituted an exorbitant million-dollar obstacle to all-digital communications? Many current attitudes toward wireless stem from that time, which was some five years ago. Today, digital signal processors are the fastest-moving technology in all computing. Made on single chips or multichip modules, DSPs are increasing their cost- effectiveness tenfold every two years. As radio pioneer Donald Steinbrecher says, “That changes wireless from a radio business to a computer business.”

Thus, we can expect the cellular telephone establishment to reach a crisis more quickly than the mainframe establishment did. The existing cellular infrastructure will persist for vehicular use.

As the intelligence in networks migrates to microcells, the networks themselves must become dumb. A complex network, loaded up with millions of lines of software code, cannot keep up with the efflorescent diversity and creativity among ever more intelligent digital devices on its periphery. This rule is true for the broadband wire links of fiber optics, as intelligent switching systems give way to passive all-optical networks. It is also true of cellular systems.

Nick Kauser, McCaw Cellular Communications’ executive vice- president and chief of technology, faced this problem early in 1991 when the company decided to create a North American Cellular Network for transparent roaming throughout the regions of Cellular One. “The manufacturers always want to sell switches that do more and more. But complex switches take so long to program that you end up doing less and less,” says Wayne Perry, McCaw vice-chairman. Each time Kauser tried to change software code in one of McCaw’s Ericsson switches, it might have taken six months. Each time he wanted to add customer names above a 64,000 limit, Ericsson tried to persuade him to buy a new switch. The Ericsson switches, commented one McCaw engineer, offer a huge engine but a tiny gas tank. The problem is not peculiar to Ericsson, however; it is basic to the very idea of complex switch- based services on any supplier’s equipment.

When McCaw voiced frustration, one of the regional Bell operating companies offered to take over the entire problem at a cost of some $200 million. Instead, Kauser created a Signaling System 7 (SS-7) network plus an intelligent database on four Tandem fault-tolerant computers, for some $15 million. Kauser maintains that the current services offered by North American Cellular could not be duplicated for 10 times that amount, if at all, in a switch-based system. Creating a dumb network and off- loading the intelligence on computer servers saved McCaw hundreds of millions of dollars.

The law of the microcosm is a centrifuge, inexorably pushing intelligence to the edges of networks. Telecom equipment suppliers can no more trap it in the central switch than IBM could monopolize it in mainframes.

Kauser should recognize that this rule applies to McCaw no less than to Ericsson. His large standardized systems with 30- mile cells and relatively dumb, high-powered phones resemble big proprietary mainframe networks. In the computer industry, these standardized architectures gave way to a mad proliferation of diverse personal computer nets restricted to small areas and interlinked by hubs and routers. The same pattern will develop in cellular.

Could “Charles” Upend McCaw?

Together with GTE and the regional Bell operating company cellular divisions, McCaw is now in the position of DEC in 1977. With its new ally, AT&T, McCaw is brilliantly attacking the mainframe establishment of the wire-line phone companies. But the mainframe establishment of wires is not McCaw’s real competition. Not stopping at central switches, the law of the microcosm is about to subvert the foundations of conventional cellular technology as well. Unless McCaw and the other cellular providers come to terms with the new PC networks that go by the name of PCNs, they will soon suffer the fate of the minicomputer firms of the last decade. McCaw could well be upended by its founder’s original vision of his company – a PICO he called “Charles.”

Just as in the computer industry in the late 1970s, the fight for the future is already under way. Complicating the conflict is the influence of European and Japanese forces protecting the past in the name of progress. Under pressure from EEC industrial politicians working with the guidance of engineers from Ericsson, the Europeans have adopted a new digital cellular system called Groupe Speciale Mobile (GSM) after the commission that conceived it.

GSM is a very conservative digital system that multiplies the number of users in each cellular channel by a factor of three. GSM uses an access method called time-division multiple access (TDMA). Suggestive of the time-sharing methods used by minicomputers and mainframes to accommodate large numbers of users on centralized computers, TDMA stems from the time-division multiplexing employed by phone companies around the world to put more than one phone call on each digital line. Thus, both the telephone and the computer establishments are comfortable with time division.

Under pressure from European firms eager to sell equipment in America, the U.S. Telephone Industry Association two years ago adopted a TDMA standard similar to the European GSM. Rather than creating a wholly new system exploiting the distributed powers of the computer revolution, the TIA favored a TDMA overlay on the existing analog infrastructure. Under the influence of Ericsson, McCaw and some of the RBOCs took the TDMA bait.

Thus, it was in the name of competitiveness and technological progress, and of keeping up with the Europeans and Japanese, that the U.S. moved to embrace an obsolescent cellular system. It made no difference that the Europeans and Japanese were technologically well in our wake. Just as in the earlier case of analog HDTV, however, the entrepreneurial creativity of the U.S. digital electronics industry is launching an array of compelling alternatives just in time.

Infusing cellular telephony with the full powers of wide and weak – combining Shannon’s vision with computer advances – are two groups of engineers from MIT who spun out to launch new companies. Qualcomm Inc. of San Diego, is led by former professor Irwin Jacobs and telecom pioneer Andrew Viterbi. A Shannon disciple whose eponymous algorithm is widely used in digital wire-line telephony, Viterbi now is leading an effort to transform digital wireless telephony. The other firm, Steinbrecher Corp. of Woburn, Mass., is led by an inventor from the MIT Radio Astronomy Lab named Donald Steinbrecher.

Like Bernie Bossard and Vahak Hovnanian, the leaders of Qualcomm and Steinbrecher received the ultimate accolade for an innovator: They were all told their breakthroughs were impossible. Indeed, the leaders at Qualcomm were still contending that Steinbrecher’s system would not work just weeks ago when PacTel pushed the two firms together. Now they provide the foundations for a radical new regime in distributed wireless computer telephony.

Signals in Pseudonoise

Ten years ago at Linkabit, the current leaders of Qualcomm conceived and patented the TDMA technology adopted as the U.S. standard by the Telephone Industry Association. Like analog HDTV, it was a powerful advance for its time. But even then, Viterbi and Jacobs were experimenting with a Shannonesque technology.

A classic example of the efficacy of wide and weak, CDMA exploits the resemblance between noise and information. The system began in the military as an effort to avoid jamming or air- tapping of combat messages. Qualcomm brings CDMA to the challenge of communications on the battlefronts of big-city cellular.

Rather than compressing each call into between three and 10 tiny TDMA time slots in a 30-kilohertz cellular channel, Qualcomm’s CDMA spreads a signal across a comparatively huge 1. 25-megahertz swath of the cellular spectrum. This allows many users to share the same spectrum space at one time. Each phone is programmed with a specific pseudonoise code, which is used to stretch a low-powered signal over a wide frequency band. The base station uses the same code in inverted form to “despread” and reconstitute the original signal. All other codes remain spread out, indistinguishable from background noise.

Jacobs compares TDMA and CDMA to different strategies of communication at a cocktail party. In the TDMA analogy, each person would restrict his or her talk to a specific time slot while everyone else remains silent. This system would work well as long as the party was managed by a dictator who controlled all conversations by complex rules and a rigid clock. In CDMA, on the other hand, everyone can talk at once but in different languages. Each person listens for messages in his or her own language or code and ignores all other sounds as background noise. Although this system allows each person to speak freely, it requires constant control of the volume of the speakers. A speaker who begins yelling can drown out surrounding messages and drastically reduce the total number of conversations that can be sustained.

For years, this problem of the stentorian guest crippled CDMA as a method of increasing the capacity of cellular systems. Spread spectrum had many military uses because its unlocalized signal and cryptic codes made it very difficult to jam or overhear. In a cellular environment, however, where cars continually move in and out from behind trucks, buildings and other obstacles, causing huge variations in power, CDMA systems would be regularly swamped by stentorian guests. Similarly, nearby cars would tend to dominate faraway vehicles. This was termed the near-far problem. When you compound this challenge with a static of multipath signals causing hundreds of 10,000-to- 1 gyrations in power for every foot traveled by the mobile unit – so-called Rayleigh interference pits and spikes – you can comprehend the general incredulity toward CDMA among cellular cognoscenti. Indeed, as recently as 1991, leading experts at Bell Labs, Stanford University and Bellcore confidently told me the problem was a show-stopper; it could not be overcome.

Radio experts, however, underestimate the power of the microcosm. Using digital signal processing, error correction and other microcosmic tools, wattage spikes and pits 100 times a second can be regulated by electronic circuitry that adjusts the power at a rate of more than 800 times a second.

To achieve this result, Qualcomm uses two layers of controls. First is a relatively crude top layer that employs the automatic gain control device on handsets to constantly adjust the power sent by the handset to the level of power received by it from the base station. This rough adjustment does not come near to solving the problem, but it brings a solution into reach by using more complex and refined techniques.

In the second power-control step, the base station measures the handset’s signal-to-noise and bit-error ratios once every 1.25 milliseconds (800 times a second). Depending on whether these ratios are above or below a constantly recomputed threshold, the base station sends a positive or negative pulse, either raising or lowering the power some 25 percent.

Dynamic Cells

Passing elaborate field tests with flying colors, this power- control mechanism has the further effect of dynamically changing the size of cells. In a congested cell, the power of all phones rises to overcome mutual interference. On the margin, these high- powered transmissions overflow into neighboring cells where they may be picked up by adjacent base station equipment. In a quiet cell, power is so low that the cell effectively shrinks, transmitting no interference at all to neighboring cells and improving their performance. This kind of dynamic adjustment of cell sizes is impossible in a TDMA system, where adjacent cells use completely different frequencies and fringe handsets may begin to chirp like Elmer Fudd.

Once the stentorian voice could be instantly abated, power control changed from a crippling weakness of CDMA into a commanding asset. Power usage is a major obstacle to the PCN future. All market tests show that either heavy or short-lived batteries greatly reduce the attractiveness of the system. Because the Qualcomm feedback system keeps power always at the lowest feasible level, batteries in CDMA phones actually are lasting far longer than in TDMA phones. CDMA phones transmit at an average of two milliwatts, compared with 600 milliwatts and higher for most other cellular systems.

A further advantage of wide and weak comes in handling multipath signals, which bounce off obstacles and arrive at different times at the receiver. Multipath just adds to the accuracy of CDMA. The Qualcomm system combines the three strongest signals into one. Called a rake receiver and co- invented by Paul Green, currently at IBM and author of Fiber Optic Networks (Prentice Hall, 1992), this combining function works even on signals from different cells and thus facilitates hand-offs. In TDMA, signals arriving at the wrong time are pure interference in someone else’s time slot; in CDMA, they strengthen the message.

Finally, CDMA allows simple and soft hand-offs. Because all the phones are using the same spectrum space, moving from one cell to another is easy. CDMA avoids all the frequency juggling of TDMA systems as they shuffle calls among cells and time slots. As the era of PCN microcells approaches, this advantage will become increasingly crucial. Cellular systems that spurn Qualcomm today may find themselves in a quagmire of TDMA microcells tomorrow. Together, all the gains from CDMA bring about a tenfold increase over current analog capacity. In wireless telephony above all, wide and weak will prevail.

Like any obsolescent scheme challenged by a real innovation – and like minicomputers and mainframes challenged by the PC – TDMA is being sharply improved by its proponents. The inheritors of the Linkabit TDMA patents at Hughes and International Mobile Machines Corp. (IMMC) have introduced extended TDMA, claiming a 19-fold advance over current analog capacity. Showing a conventional cellular outlook, however, E-TDMA fatally adopts the idea of increasing capacity by lowering speech quality. This moves in exactly the wrong direction. PCN will not triumph through compromises based on a scarce-spectrum mentality. PCN will multiply bandwidth to make the acoustics of digital cellular even better than the acoustics of wire-line phones, just as the acoustics of digital CDs far excel the acoustics of analog records.

Riding the microcosmic gains of digital signal processing, CDMA inherently offers greater room for improvement than TDMA does. Bringing the computer revolution to cellular telephony, CDMA at its essence replaces frequency shuffling with digital intelligence. Supplanting the multiple radios of TDMA – each with a fixed frequency – are digital-signal-processing chips that find a particular message across a wide spectrum swath captured by one broadband radio.

With the advance in digital electronics, the advantage of CDMA continually increases. As the most compute-intensive system, CDMA gains most from the onrushing increases in the cost- effectiveness of semiconductor electronics. Qualcomm recently announced that it has reduced all the digital signal processing for CDMA into one application-specific chip.

For all the indispensable advances of CDMA, however, Qualcomm cannot prevail alone. It brilliantly executes the move to digital codes, but proprietary mainframe computer networks are digital, too. As presently conceived, CDMA still aspires to be a cellular standard using the same mainframe architecture of mobile telephone switching offices that now serve the analog cellular system. In itself the Qualcomm solution does little to move cellular toward the ever cheaper, smaller and more open architectures that now dominate network computing and will shape PCN.

Hearing Feathers Crash Amid Heavy Metal

Consummating the PCN revolution – with its millions of microcells around the globe and its myriad digital devices and frequencies – will require a fundamental breakthrough in cellular radio technology. In the new Steinbrecher minicell introduced early this month at the Cellular Telephone Industry Association show, that breakthrough is at hand. The first true PC server for PCN, this small box ultimately costing a few thousand dollars will both replace and far outperform a 1,000-square-foot base station costing more than a million dollars.

Once again, in an entrepreneurial economy, crucial innovations come as an utter surprise to all the experts in the field. Donald Steinbrecher began in the Radio Astronomy Lab at MIT in the 1960s and early 1970s, creating receivers that could resolve a random cosmic ray among a mass of electromagnetic noise. This required radios with huge dynamic range – radios that could hear a feather drop at a heavy metal rock concert. He and his students solved this intractable problem by creating unique high-performance receivers and frequency “Mixers.” These could process huge spans of spectrum with immense variations of power and translate them without loss into intermediate frequencies. Then, computer systems convert the signals from analog to digital and analyze them with digital signal processors.

Moving out to begin his own company in 1973, Steinbrecher and his colleagues made several inventions in the fields of radar and digital signal analysis. At first, most of their customers were national security contractors in the intelligence field. For example, Steinbrecher supplied the radios for the ROTHR (remote over the horizon radar) systems that became famous for their role in the war against airborne drug traffic. Then in 1986, the company was asked if its equipment could work in the cellular band.

After cosmic rays and battlefield radar, the cellular band was easy. When he saw that the digital signal processors at the heart of his systems were dropping in price tenfold every two years, Steinbrecher knew that his esoteric radios could become a consumer product.

Translated to cellular, this technology opens entire new frontiers for wireless telephony. Rather than tuning into one fixed frequency as current cellular radios do, Steinbrecher’s cells can use a high-dynamic-range digital radio to down-convert and digitize the entire cellular band. TDMA, CDMA, near or far, analog cellular, video, voice or data, in any combination, it makes no difference to the Steinbrecher system. His minicell converts them all at once to a digital bit stream. The DSPs take over from there, sorting out the TDMA and CDMA signals from the analog signals and reducing each to digital voice. To the extent the Steinbrecher system prevails, it would end the need for hybrid phones and make possible a phased shift to PCN or a variety of other digital services.

Hoping to use Qualcomm chipsets and other technology, Steinbrecher could facilitate the acceptance of CDMA. For CDMA, the minicell provides a new, far cheaper radio front end that offers further relief to the near-far problem and is open to the diverse codes and fast-moving technologies of PCN. For the current cellular architecture, however, Steinbrecher offers only creative destruction, doing for large base stations what the integrated circuit did for racks of vacuum tubes in old telephone switches.

In essence, the new minicell replaces a rigid structure of giant analog mainframes with a system of wireless local area networks. Reconciling a variety of codes and technologies, the Steinbrecher devices resemble the smart hubs and routers from SynOptics Communications and Cisco Systems that are transforming the world of wired computer networks.

Best of all, at a time when the computer industry is preparing a massive invasion of the air, these wide and weak radios can handle voice, data and even video at the same time. Further, by cheaply accommodating a move from scores of large base stations to scores of thousands of minicells per city – on poles, down alleys or in elevator shafts – the system fulfills the promise of the computer revolution as a spectrum multiplier. Since each new minicell can use all the frequencies currently used by a large cell site, the multiplication of cells achieves a similar multiplication of bandwidth.

Finally, the Steinbrecher receivers can accommodate the coming move into higher frequencies. Banishing once and for all the concept of spectrum scarcity, these high-dynamic-range receivers can already handle frequencies up to the “W band” of 90 gigahertz and more.

Boundless Bandwidth

The future of wireless communications is boundless bandwidth, accomplished through the Shannon strategy of wide and weak signals, moving to ever smaller cells with lower power at higher frequencies. The PCN systems made possible by Qualcomm and Steinbrecher apply this approach chiefly to voice and data. Recent announcements by Bossard and Hovnanian extend the concept to television video as well. Last December, they disclosed that their company, Cellular Vision, was already wirelessly delivering 49 cable television channels to 350 homes near Brighton Beach, Long Island, in the 28-gigahertz band. They declared a plan to soon sign up some 5,000 new customers a month all over New York.

Among engineers in cellular and cable firms, Cellular Vision evokes the same responses of incredulity and denial familiar at Qualcomm and Steinbrecher. Like them, Bossard is resolutely on the right side of the Shannon and Shockley divide. In answer to the multitude of qualms and objections and demurrals, all three companies cite the huge benefits of more bandwidth. Qualcomm can assign some 416 times as much bandwidth to each call as a current cellular or TDMA system. Steinbrecher’s minicell receivers can process 4,160 times as much bandwidth as an analog cell site or TDMA radio.

Hovnanian achieves some 300 times the bandwidth of a broadcast TV station and some three times the bandwidth of even a typical cable head end. For Hovnanian’s so-called multipoint local distribution system, the FCC has allocated a total of two gigahertz between 27.5 and 29.5 gigahertz – one gigahertz for TV and one gigahertz for experimental data and phone service. This large swath of spectrum allows Cellular Vision to substitute bandwidth for power. Using FM rather than the AM system of cable, Cellular Vision gains the same kind of increased fidelity familiar in FM radio. Assigning 20 megahertz to each channel – three times the six megahertz of an analog system – Cellular Vision proves the potency of wide and weak by getting 20 decibels – some 10 times – more signal quality. These extra decibels come in handy in the rain.

With a radius of three miles, Cellular Vision cells are about 100 times smaller than telephone cells. Transmitting only 10 milliwatts per channel over a three-mile radius, the system gets far better signal-to-noise ratios than the three-watt radios of cellular phones or the multikilowatt systems of AM radio or television broadcasts. The millimeter wavelengths at 28 gigahertz allow narrowband high-gain antennas that lock onto the right signal and isolate it from neighboring cells. At 28 gigahertz, small antennas command the performance of much larger ones (for example, a six-inch antenna at 28 gigahertz is equivalent to a three-foot antenna at 4 gigahertz or a 300-foot antenna at broadcast television frequencies).

In Brighton Beach the receiving antennas, using a fixed- phased-array technology, are just four inches square, and the transmitting antennas deliver 49 channels from a one-inch omnidirectional device on a box the size of a suitcase. Between cells, these transmitters can send programming and other information through a conventional point-to-point microwave link.

Singing in the Rain

So what happens in the rain? Well, it seems that Cellular Vision does better than conventional cable. When you have small cells in geodesic low-power wireless networks using the full computational resources of modern microchips, you have plenty of extra decibels in your signal-to-noise budget to endure the most violent storms. Indeed, the 350 Brighton Beach customers of Cellular Vision received continuous service during the November 1992 near hurricane in New York, which brought floods that interrupted many cable networks for hours. One competitive advantage of Cellular Vision over cable seems to be less vulnerability to water.

Moving television radically toward the regime of wide and weak, Bossard and the Hovnanians have changed the dimensions of the air. However, they cannot escape the usual burdens of the innovator. Any drastic innovation must be some 10 times as good as what it replaces. Otherwise, the installed base, engineering momentum and customer loyalty of the incumbents will prevail against it.

Cellular Vision faces a wired cable system with some $18 billion in installed base. Already deploying fiber at a fast pace, cable companies plan to move within the next year toward digital compression schemes that increase capacity or resolution by a factor of between six and 10 (depending on the character of the programming). That means some 500 digital channels or more. TCI, the leading cable company, has ordered some one million cable converter and decompression boxes from General Instruments’ Jerrold subsidiary for delivery late in 1993. In the U.S. cable industry, Hovnanian faces an aggressively moving target. Most cable experts doubt he can make much of a dent.

This view may be shortsighted. Clearly, Cellular Vision – and its likely imitators – can compete in the many areas with incompetent cable systems, in areas yet unreached by cable or in new projects launched by developers such as the Hovnanians. In the rest of the world, cable systems are rare. Cellular Vision is finding rich opportunities abroad, from Latvia to New Zealand. Most of all, as time passes, Cellular Vision might find itself increasingly well positioned for a world of untethered digital devices.

Such a cellular system could be adapted to mobile telephone or computer services. With a bit-error rate of one in 10 billion, it could theoretically transmit computer data without error correction. With one gigahertz of bandwidth, the system could function easily as a backbone for PCN applications, collecting calls from handsets operating at lower frequencies and passing them on to telephone or cellular central offices or to intelligent network facilities of the local phone companies.

The future local loop will combine telephone, teleputer and digital video services, together with speech recognition and other complex features, in patterns that will differ from neighborhood to neighborhood. Easily customizable from cell to cell, a system like Bossard’s might well offer powerful advantages.

In an era of bandwidth abundance, the Negroponte switch – with voice pushed to the air and video onto wires – may well give way to this division between fibersphere and atmosphere. With the fibersphere offering virtually unlimited bandwidth for fixed communications over long distances, the local loop will be the bottleneck, thronged with millions of wireless devices. Under these conditions, a move to high-frequency cellular systems is imperative to carry the increasing floods of digital video overflowing from the fibersphere.

In any case, led by Qualcomm, Steinbrecher and Cellular Vision, a new generation of companies is emerging to challenge the assumptions and structures of the existing information economy. All these companies are recent startups, with innovations entirely unexpected by international standards bodies, university experts and government officials. They are the fruit of an entrepreneurial America, guided by the marketplace into the microcosm and telecosm.

Why Imitate European Failures?

Meanwhile, the European and Japanese experiences with government-guided strategies should give pause to proponents of similar policies here. Thirty years of expensive industrial policy targeting computers has left the Europeans with no significant computer firms at all. The Japanese have done better, but even they have been losing market share across the board to the U.S.

In the converging crescendos of advance in digital wireless telephony and computing, progress is surging far beyond all the regulatory maps and guidebooks of previous years. If the entire capacity of the 28-gigahertz band, renewed every three miles, is open to telephony and video, bandwidth will be scarcely more limiting in wireless than it is in glass.

In this emerging world of boundless bandwidth, companies will prevail only by transcending the folklore of scarcity and embracing the full promise of the digital dawn. In an era of accelerating transition, the rule of success will be self- cannibalization. Wire-line phone companies are not truly profitable today; their reported earnings all spring from slow depreciation of installed plant and equipment that are fast becoming worthless. As George Calhoun of IMMC demonstrates in his superb new book, Wireless Access and the Local Telephone Network (Artech, 1992), new digital wireless connections are already less than one-third the cost of installing wire-line phones. For the RBOCs, aggressively attacking their own obsolescent enterprises is their only hope of prosperity.

As Joseph Schlosser of Coopers & Lybrand observes, self- cannibalization will not appear to be in the financial interests of the established firms; it will not prove out in net-present- value terms. There will be no studies to guarantee its success. Executives will have to earn their pay by going with their gut. As semiconductor and computer companies have already learned, phone and cable companies will discover that self-cannibalization is the only way to succeed in this era – the only way to stop others from capturing the heart of your business.

This is the lesson of the last decade. When Craig McCaw sold his cable properties and plunged into cellular telephony and $2 billion of Michael Milken’s junk bond debt, there was no way to prove him right. Today AT&T is preparing to launch him as a rival to Bill Gates as the nation’s richest man. Yet McCaw cannot rest on his laurels; the hour of the cannibal is at hand.

In theory, the transition should not be difficult for this resourceful and ingenious entrepreneur, who has long been a leading prophet of ubiquitous wireless phones and computers – his predicted personal digital assistant, “Charles.” But a company that has paid billions for its 25-megahertz national swath of long and strong frequencies faces especially acute dilemmas in moving toward a regime of wide and weak. As a man – and company – that has made such transitions before, McCaw is favored by history and by AT&T. As a giant pillar of the new establishment, though, McCaw may find it as difficult to shift gears as did the computer establishment before him. The stakes are even higher. The next decade will see the emergence of fortunes in ever- changing transmutations of PCN, digital video, multimedia and wireless computers that dwarf the yields of cable and cellular. The window of opportunity opens wide and weak.

George Gilder

Senior Fellow and Co-Founder of Discovery Institute
George Gilder is Chairman of Gilder Publishing LLC, located in Great Barrington, Massachusetts. A co-founder of Discovery Institute, Mr. Gilder is a Senior Fellow of the Center on Wealth & Poverty, and also directs Discovery's Technology and Democracy Project. His latest book, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (2018), Gilder waves goodbye to today's Internet.  In a rocketing journey into the very near-future, he argues that Silicon Valley, long dominated by a few giants, faces a “great unbundling,” which will disperse computer power and commerce and transform the economy and the Internet.