PCS Providers Encountering Static
Providers of personal communications services, once heralded as pioneers of the ultimate form of mobile communications, are running into so much interference that many of them are having trouble getting their ventures off the ground.
Even as the final phase of bidding for the parts of the radio spectrum reserved for PCS reaches stratospheric levels, some previous winners of the coveted wireless communications licenses are beginning to wonder if they will ever see a return on their investment.
Some formerly high-flying joint ventures have been laid low by bickering among partners. Other plans have been waylaid by feisty homeowners worried that an onslaught of new wireless-communications towers will despoil their neighborhoods, and by senior citizens groups concerned that PCS will interfere with their hearing aids.
In fact, nearly two years after the first federal government auction of radio spectrum for PCS, there are only two regions where the technology is available for personal use: the Washington-Baltimore area and Hawaii.
“This was never going to be as easy as some people suggested it would be,” said David Abraham, a telecommunications investment banker who heads his own Westport, Conn., firm. “There are complicated technical decisions to make and complicated real estate decisions to be made.”
That’s a far different appraisal from the one offered at the beginning of the decade. Back then, industry officials predicted the rapid development of PCS networks that would enable ordinary consumers to dispense with separate office, home and cellular phones and instead carry an inexpensive device the size of a wristwatch that would operate not only as a telephone but as an answering machine, a pager and a means to keep track of stock prices and other data.
But would-be PCS providers have scaled back some of their technological ambitions and now aim mainly to compete head-on with traditional cellular services. Even those more modest ambitions have run into trouble, mostly because--in their mad scramble to secure PCS licenses--entrepreneurs ruffled the feathers of a lot of folks whose blessings they need to help PCS succeed.
Perhaps the most surprising discord has been among the PCS companies themselves. The PCS Prime Co. of Bell Atlantic Corp., Nynex Corp., US West Inc. and AirTouch Communications Inc. has reportedly argued over everything from selecting which company should make its PCS phones to choosing a brand name for the service.
Meanwhile, Sprint Spectrum, a limited partnership that has paid the federal government $2 billion to offer PCS in 29 regions throughout the country, has had to reshuffle its strategic plans in an effort to keep the peace with its three cable company partners.
While acknowledging that not everything has gone smoothly with PCS, Lee Cox, president of AirTouch Communications, insisted that his company’s deployment of PCS is on schedule.
“There are always some problems,” Cox said. “ . . . Everybody doesn’t meet you with open arms. But that is business. The fact is, we were one of the very first to announce our technology decision.”
In some instances, however, racing the clock has left a lot of bruised egos, especially among existing users of the wireless spectrum--mostly local police and fire departments, utility companies and railroads--that must be moved to other airwaves in order for PCS services to be launched. Users complain that some of the PCS negotiations have not been very neighborly.
Gung-ho PCS providers, critics say, do not understand the challenges that existing wireless users face in having to dismantle, relocate, test and rebuild communications networks for such critical services as police, fire and utility service.
“A lot of these PCS guys are hot to trot,” said Charles M. Meehan, executive director of the Utilities Telecommunications Council, a Washington-based trade group that represents about 2,000 utility companies. “They come in saying, ‘We want you out of here in 90 days.’ And I’m thinking, ‘What are these guys smoking?’ ”
PCS operators have also run aground with some local planning officials who have objected to their large and elaborate towers.
“The telecommunications industry should be good neighbors,” Donna Halstead, a member of the Dallas City Council, told the American Planning Assn., a Washington-based trade group representing local planning officials. “Towers are often as high as 180 feet, and communities are rightly concerned that they be built on appropriate sites which protect health and safety as well as the appearance of our communities.”
The irony of the PCS saga, said Bill Bane, a vice president at the Washington office of Mercer Management Consulting, is that there appears to be a lot of pent-up demand for PCS, whose digital signal offers sound quality and security superior to that of traditional analog cellular phones.
“Sprint Spectrum here in the Washington area has been a rolling success,” Bane said. “Just like many people hate their cable company . . , a lot of people dislike their cellular provider and are eager” to move to PCS.
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