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Wireless Ops Learn to Love Net

New Orleans -- Internet euphoria swept over the
mobile-wireless industry last week, ensuring that from now on, the pace of industry
transition to ever-higher-speed-data services will be dictated largely by events beyond
the control of individual carriers.

Top executives from Microsoft Corp., America Online Inc.,
Amazon.com Inc., Sun Microsystems Inc., Compaq Computer Corp. and a legion of
wireless-oriented start-ups descended on the annual Cellular Telecommunications Industry
Association convention here, where they told attendees their days of fretting over how and
when to facilitate better access to data services are over.

The solution: the compelling market advantages that go with
anytime, anywhere connectivity to the Web.

"Individuals should be able to receive the information
they want, when they want it and where they want it, without the sender having to be
concerned about the communication devices involved," Microsoft chairman Bill Gates
said.

The disconnect between Internet-industry ambitions and
wireless carriers' traditional perspectives on data-service issues was evident
throughout the three-day event, as carrier representatives continued to debate marketing,
bandwidth-allocation and technology issues that have dogged progress on data. Meanwhile,
Internet executives went about explaining why the Web was about to transform every facet
of the wireless business, no matter which strategies are in place.

For example, if the market expects flat-rate pricing for
access to the Internet, that's what it will get from wireless, Amazon.com CEO Jeff
Bezos said, adding that he takes issue with strategies that seek to "own the
customer."

But John Zeglis, chairman and CEO of AT&T Wireless
Group, expressing a widely held carrier view, said the model to follow is the one
represented by NTT DoCoMo Inc.'s "i-Mode" wireless-data service in Japan.
After one year, it is generating an average of $25 in added monthly spending per wireless
customer.

"DoCoMo has its service right where we all want to be
-- collecting revenues monthly by the bit from the customer and being able to collect
additional revenues from Web transactions and from what's generated in the content
sphere," Zeglis said.

In an exchange that further mirrored the gap in thinking
between the two sectors, CTIA president Tom Wheeler asked Bezos whether he agreed with
carriers that believe they must test the data waters with low-speed services until
consumers are educated to appreciate the advantages of higher-speed access. Such thinking
fails to appreciate the mind-set of the early adopters driving electronic commerce, Bezos
said.

"If you can provide a fatter pipe and a better
display, and all of those things sooner, rather than later, you're going to get more
customers, not fewer," Bezos said. "It would be a mistake to artificially slow
things down assuming that there's some sort of learning curve that can't handle
a faster progression."

Bezos predicted that within the next decade or so, his
industry might be doing "everything wirelessly. That's how big things can be and
why we and so many others are investing so much in this wireless future."

Amazon.com launched a wireless Web site that will deliver
content to client devices designed to interact with the Wireless Access Protocol and to
wireless devices that work with other access protocols, as well, ensuring the widest
possible distribution of its services to handhelds around the world.

Amazon.com president Joe Galli said the firm has devoted a
team of engineers and developers to preparations for the transition to broadband-enhanced
content on the assumption that "broadband will change many aspects of what we
do."

Early on, big online players have been aligning with
specific carriers to create branded portals as points of entry for e-mail, instant
messaging and data content, which generally has to be stripped of graphics and other
nonessentials in order to work with slow-speed links and small screens.

Microsoft introduced a new version of its "MSN
Mobile" service in conjunction with new distribution deals involving Nextel
Communications and AirTouch Communications Inc. Those carriers' wireless customers
can interact with The Microsoft Network's "Hotmail" e-mail service in real
time and gain access to many other wireless-configured components of the MSN online
service.

Microsoft also plans to configure forthcoming versions of
its "Windows 2000" operating system with software supporting point-and-click
connectivity to the Web via wireless phones and other devices, Gates said.

Not to be outdone, AOL struck deals with Sprint PCS and
various paging interests that will afford AOL subscribers access to AOL e-mail, instant
messaging and wireless-adapted content.

But the larger force behind the sudden surge of Web
presence in wireless is the de facto adoption of WAP as a means of configuring Web content
to the thin-client parameters required for delivery to handsets, regardless of
air-interface protocol. "This is happening right now, not in the future," Bezos
said.

If, as Bezos insisted, the wireless industry doesn't
have to worry whether demand will justify investment in network support for access speeds
beyond today's commonly used 14.4-kilobit-per-second rate, the challenge becomes how
to quickly meet market demand for higher speeds.

Here, Zeglis made it clear that he is in agreement with the
Web view, noting, "As long as we sit here and try to list what the killer
applications will be, we will fail."

Calling on the industry to "unleash the power of the
fusion of voice and data," Zeglis said this power would apply to fixed wireless, as
well as mobile, as a "natural evolution" of wireless providers' position in
the market.

While Zeglis said he could not discuss AT&T
Corp.'s fixed-wireless "Project Angel" because the company is in a quiet
period preceding the issuance of a new wireless tracking stock, he asserted that the
economics strongly favored adding fixed services to the company's existing wireless
infrastructure, given the fact that two-thirds of fixed-service costs are incurred only
when paying customers are signed up.

As previously reported, AT&T has begun contracting with
field engineers and other outside entities, and it is seeking vendors for its proprietary
fixed system in preparation for commercial launches later this year.

AT&T CEO Michael Armstrong has said that the company
will use fixed-wireless services in markets where it is unable to consummate
cable-transmission deals.

How fast the wireless industry in general will move to
higher-speed data platforms remains to be seen, but there is clearly new pressure from
carriers on vendors to come up with high-speed solutions sooner, rather than later.