Wireless pioneer returns New technology: The PCS network is aiming to challenge the cellular network in the fast-growing field of wireless communications

November 12, 1995|By Michael Dresser | Michael Dresser,SUN STAFF

Twelve years ago, Baltimore's Wayne N. Schelle helped spark a revolution in communications by starting a pioneering wireless telephone network serving his hometown and Washington.

The network, only the second in the country, was called Cellular One. It has since become a nationwide brand.

This week Mr. Schelle will be up to his old tricks -- attempting to overthrow an "old" technology in favor of a new one.

On Wednesday, his American Personal Communications Inc. will announce the launch of service on the nation's first digital "PCS" network here and in Washington. The service will carry the name of APC's corporate partner, Sprint.

PCS stands for personal communications services, although the cellular industry jokingly calls it "plagiarized cellular services."

But the telecommunications industry isn't treating PCS as a joke. Cellular prices have already been dropping in anticipation of the challenge, and they're certain to fall even more as competition becomes a reality. Probe Research, a Cedar Knolls, N.J., telecommunications research firm, is projecting 20 million PCS handsets will be in use by 2000. Currently there are about 30 million cellular phones.

It isn't just the cellular carriers that are watching PCS nervously. Local telephone companies such as Bell Atlantic Corp. are taking seriously the possibility that PCS could present a wireless challenge to their stranglehold on the residential telephone market.

In fact, some of the nation's largest telecommunications companies have bet more than $7.7 billion that PCS is no pipe dream.

That's what they shelled out earlier this year when the Federal Communications Commission put 99 PCS licenses up for auction in the largest public sale of radio spectrum ever conducted. Among the players were AT&T Corp., the regional Bell companies and an alliance of Sprint and three large cable TV companies.

Bethesda-based APC didn't participate in that auction because it had been certified by the FCC as a pioneer in developing PCS technology. It was thus granted one of the two broadband (high-capacity) PCS licenses for the Baltimore-Washington area without having to go through the auction process. An AT&T Corp. subsidiary bought the other one for $211.7 million.

That allowed APC to get a head start on the construction of the network of antennas and advanced electronics that will drive its PCS system. And that's why the PCS industry will be born in the Baltimore-Washington area.

Mr. Schelle, the 61-year-old chairman of APC, and his son Scott Schelle, the company's 34-year-old chief executive officer, are keeping many of the details of the service under wraps until Wednesday's announcement.


Nevertheless, the two men were exuberant last week as they showed off their soon-to-be-unwrapped downtown Baltimore store -- now hiding behind brown paper on the ground floor of the IBM Building next to Jos. A. Bank on Pratt Street. APC also will open stores in downtown Washington and Tyson's Corner, Va.

"How do I feel about this new business? Yabba Dabba Doo!" exulted Wayne Schelle.

Mr. Schelle, a lifelong Baltimorean and a onetime educator turned entrepreneur, said PCS will be far more than "me-too cellular" -- as prominent skeptic Herschel Shosteck, a market economist who follows the wireless industry, described the way PCS has been marketed.

"When I was involved in cellular, I thought cellular technology was terrific," Mr. Schelle said. Now his theme could be the old Groucho Marx refrain: "Even though it was I who commenced it, I'm against it."

Methodically, he recounted the offenses of present-day cellular service -- cost, dropped calls, static, the size of the handsets, short battery life, the inability of the signals to penetrate deep inside buildings. Cellular, Mr. Schelle said, is the equivalent of a Boeing 707. "We're a 777," he said.

Scott Schelle weighed in to assert the virtues of APC's service -- built-in voice mail and paging at no extra charge, greater privacy, smoother handoffs from cell to cell, fewer busy signals, better penetration of buildings, easier data transmission and other services yet to be announced.

All this, he said, will cost 10 percent to 40 percent less than cellular -- depending on the plan the user chooses. And by early next year, a customer will be able to insert a credit card-sized device into a handset and use it as a modem to send computer data.

But the single biggest selling point, the younger Mr. Schelle said, is the clear digital signal, which uses a stream of ones and zeros rather than an analog wave that can be distorted.

"It's like a CD. There is no static because the digital technology says make a sound or don't make a sound," said Scott Schelle.

But along with APC's advantages come significant drawbacks.

Limited territory

At launch, the fledgling network will cover a more limited territory than Cellular One or Bell Atlantic Nynex Mobile, the two local cellular systems.

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