Really portable telephones: costly, but coming?

It's 2 in the afternoon and you're starving. Breakfast was half a tangerine and a cookie, but you can't go to lunch until the branch manager in Pawtucket returns your call. You stare at the phone, your stomach rumbling like a diesel engine, and wish the cord were long enough so you could take the receiver with you to the Burger King next door.

Soon you might be able to do just that. A long-delayed Federal Communications Commission decision may pave the way for cellular telephones, a sophisticated type of mobile communication that would let businessmen have their lunch and answer the phone, too --as well as increase productivity for such fast-moving workers as construction project managers and TV news crews.

"This is the most exciting thing to happen in telephones since Bell said, 'Mr. Watson, come here, I want you,'" says one industry observer.

Critics claim the FCC's decision -- which gives a major portion of the potentially explosive new market to the giant American Telephone & Telegraph Company -- is not in the consumer's best interest. And others caution that cellular phones aren't close to becoming mass-market items, like calculators or electronic football games.

Currently, mobile telephone service is provided by one transmitter in each city. Since only a few channels are available, only a few can afford service -- for the most part limiting portable phones to the limousine crowd.

But the demand for such service is terrific. The Bell System, for instance, has 20,000 people on its mobile phone waiting list.

Cellular technology, developed in the 1960s, is a way of reusing frequencies so more people can talk on the move.

It's a logical extension of techniques used in the broadcasting industry. For instance, almost every city in the country has a TV station on Channel 2. Each Channel 2 is broadcast on the same frequency, but they don't interfere with each other because the cities are far apart. "Cells" are set up throughout the country, reusing the frequency.

Cellular phones take the same method and shrink it down to the size of a single city. Small transmitters are spaced throughout a service area, dividing it into a grid. Since the transmitters are low-powered, frequencies can be repeated at regular intervals without interfering with each other.

Computerized switches hand off callers from one frequency to another as they move between cells. It is these sophisticated electronic "operators" that have made the technology feasible. Thousands of customers can be served, instead of a few dozen.

Serving 2,000 customers in the Chicago area, AT&T's AMPs is the only cellular system being test-marketed in the US today. Its 10 transmitters, about 10 miles apart, cover a 2,000-square-mile area.

You can hop in your car in Kenilworth, speed down the Gold Coast, and call your commodities broker downtown -- enabling you to go short on pork bellies even before arriving at the office.

The FCC is developing a procedure to license cellular systems. A proposal, approved last week, is currently undergoing "minor editorial changes" -- and will take effect when released by the commissioner sometime in the next few weeks.

"This really is the coming of a new era," said FCC's acting chairman Robert E. Lee, "Dick Tracy comes true, [referring to the wrist phones worn in the popular comic strip.]"

The FCC would fence off half the radio frequencies in each city for the local phone company. The other half would be up for grabs for any nonwireline carrier -- but they would have to battle through time-consuming FCC hearing procedures.

By giving the phone company a head start, says the FCC, consumers will get cellular phone service sooner, without licensing or development delays.

Others, however, think the real beneficiary is AT&T -- and they're crying foul.

"I think they've given a de facto monopoly to Bell," says Bernard C. Nelson, vice-president of Millicom Corporation. "This guarantees an expensive, elitist service which doesn't realize the system's true potential."

Millicom markets a cellular system which they claim is superior to Bell's. They say their phone can turn on the lights in your house, automatically answer your calls, and print out messages.And they predict it will be lighter and much cheaper than Bell's.

Nelson says Bell wants to keep mobile phones in limousines. He says Millicom , on the other hand, is committed to making cellular technology the local phone lines of the future.

Millicom has filed suit in the US Court of Appeals to stop the decision. Their own application for a demonstration project, filled out in May 1980, has yet to receive a reply.

A lawyer representing radio common carriers ("beeper" companies) says it is likely his clients will file a protest petition with the FCC. Motorola, which has invested $40 million in cellular technology, will likely follow suit.

Motorola is particularly concerned that the decision allows AT&T to manufacture cellular hardware. "If they chose to they could just take over the marketplace," says Marty Cooper, Motorola's director of research.

And two congressmen -- Rep. Timothy Wirth and Sen. Jesse Helms -- have sent letters to the FCC requesting the reasons for their decision.

The question of FCC licensing aside, what is the potential of cellular phones? Will they make local service obsolete?

"Initially, it'll make a big difference to the individual business customer," says David Loring, Bell's cellular project manager. "The limiting factor is the price of the terminal device. If it [goes down], you could get a spillover into residential use."

Jan David Jubon, a telecommunications consultant, estimates it costs $1,500 to install a residential phone in an urban area. Under the most optimistic conditions, he says a cellular system could match that.

"But who, today, will say I'm going to ditch the wires in my house and carry the phone around?" he says.

Jubon believes cellular phones could have an immediate positive effect on less-populated areas, where phone service is often spotty.

"Cellular phones will absolutely not replace local wire systems," says Marty Cooper. "Even if you project it beyond our lifetimes, it won't be cheap enough."

But he says the investment would be worth it for companies after productivity gains.

"People don't realize how tied they are to a single place," he says.

For instance, another industry executive reports that both NBC and ABC called him after the assassination attempt on President Reagan, when communication with reporters was d ifficult -- showing up in less-than-perfect broadcasts.

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