FDIC to Test '3G' Wireless Technology

FDIC to Test '3G' Wireless Technology

Jason Guesman

Jason Guesman

The Federal Deposit Insurance Corp. is preparing to test cutting-edge "third-generation" wireless technology that will make possible the high-speed transfer of data over mobile devices.

By the fourth quarter of this year, the FDIC plans to roll out a pilot program with new wireless applications that can significantly boost the productivity of employees who spend most of their time away from their offices.

"My goal, my vision, is to be able to do away with the whole idea of an office," said David Sequeira, chief of corporate telecom at the FDIC, which insures deposits in the United States' more than 9,900 banks and savings institutions.

"I believe information has a very short shelf life," he said. "The idea is, how do we get information to people on a real-time basis?"

Third-generation wireless ? "3G," as it is called in the telecom industry ? is the hot new trend in the world of wireless communications. The first generation was analog; the second was digital for voice communications. 3G will be the creation of digital networks capable of transmitting data at ultrahigh speeds, 20 times or more above today's common speeds of 9.6 to 14.4 kilobits per second.

The major wireless telecommunications companies ? AT&T Wireless Group, Cingular Wireless, Sprint PCS Group, Verizon Wireless Inc. and VoiceStream Wireless Corp. ? all have begun to jockey for position in this not-yet-established market.

Sequeira said the first application he is considering is to provide this advanced data communications technology to the organization's field service people, so they can perform their jobs without coming back to the office for assignments.

The FDIC is working with AT&T, Sprint, Verizon and VoiceStream and likely will create a solution using all four companies because none of them has a sufficient coverage area, or footprint, to meet FDIC's needs, he said.

Sequeira did not reveal the cost of the pilot project testing the 3G application, but said funding was coming from within his current budget.

Jason Guesman, director of business marketing for Sprint PCS, the wireless subsidiary of Sprint Communications Corp. based in Overland Park, Kan., said the government could benefit greatly from high-speed wireless applications.

"Think of all the field service workers employed by the federal government: child welfare, health services, tax department, Treasury Department, Census Bureau," he said. "These people are collecting all this information and they could be accessing [it] in real time in the field."

Sprint and other telecom companies are trying to push federal agencies toward 3G technology, but the level of interest among agencies is unclear. Industry observers said agencies are probably waiting for the technology to mature.

"Considering the federal government as a whole, we haven't been great risk takers in this area," said April Ramey, director of the innovations center at the General Services Administration's Federal Technology Service.

Ramey said she is eager to explore the potential for 3G applications, but no federal agency has approached her group about trying a pilot program.

"Everybody's going in and saying, 'Gee, that would be nice, but without the stuff actually available and the [applications] in place, we're going to keep doing the same things,' " she said.

The potential size of the 3G market remains unknown, though experts agree it is likely to be in the billions of dollars. Sprint's Guesman declined to provide a market estimate, saying simply, "We know it's big enough."

One problem holding up this market is there is no single standard protocol for 3G. While the International Telecommunications Union and its standards-setting groups have defined data transmission speeds for 3G, there are competing technologies that could attain those rates, and there are conflicting migratory paths to get there.

For instance, Sprint PCS has opted for CDMA2000, primarily because it is an extension of the CDMA standard the company chose in 1995 to set up its Personal Communications Services network, Guesman said.

Sprint PCS will not have to make huge upfront investments to get its 3G network up and running, he said. "We're looking at spending less than $1 billion to upgrade," he said.

Because CDMA2000 is an extension of Sprint's existing technology, the company will realize an immediate doubling of its voice capacity regardless of the gains in data transfer capabilities. That will make it much easier for the company to recover its investment, Guesman said.

Meanwhile, Cingular Wireless of Atlanta, a joint venture between SBC Communications Inc. and BellSouth Corp., has opted for a standard called GSM, which is compatible with the protocol being pursued by overseas telecommunications companies. This standard requires greater investment at the beginning for new equipment and additional spectrum, which is why many European companies have started choking on more than $100 billion in debt trying to get there.

Eddie Hold, director of telecom services with Current Analysis Inc., a competitive intelligence research firm based in Sterling, Va., said he doesn't believe there will be a single standard for 3G in the United States. It is not likely to matter if the American 3G market is not compatible with Europe; there are technological ways around that which will be unnoticeable to users, he said.

There are other challenges facing the eventual emergence of the 3G market, both federal and commercial, such as the availability of spectrum to carry information.

The auctioning off of spectrum by the Federal Communications Commission is one factor that has led to the astronomical start-up costs of 3G networks, as companies tried to outbid each other for spectrum in key geographic areas.

Hold also said that what Sprint, Cingular, Verizon and others are referring to as 3G really comes closer to being something like "2.5G," a significant step beyond current wireless capabilities primarily for voice, but well short of the speeds that true 3G is supposed to attain.

Like other experts, Hold said it's too early to provide accurate estimates of the 3G market.

"There's been some outrageous claims for market size out there, [just as] there have been outrageous claims for the wireless Web market, and they've fallen on their face," he said.

The long-term market potential, he said, depends upon the service providers marketing 3G well and providing the applications.

"It doesn't matter how fast your network is or how fantastic your phones are, if you don't have the applications, no one will buy your [solution]," Hold said.

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