In addition to its usual collection of literary fiction, lifestyle features and advertisements from the likes of Wheaties breakfast cereal, the issue of the Saturday Evening Post magazine dated July 28, 1945, featured an article titled “Phone Me by Air.” In it, the FCC commissioner E.K. Jett described an idea for dicing selected electromagnetic frequencies into small geographic zones so that the same frequency could be re-used from zone to zone.
In the pages of what was then the nation’s dominant magazine, the FCC commissioner was introducing the public to a novel and even unthinkable concept: that telephone conversations could be conducted literally out of thin air, with no wires connecting callers on either end.
Historians believe the article was inspired by a secretive demonstration Jett and his fellow FCC commissioners had seen in the winter of 1944. At a classified meeting staged by the U.S. Office of Secret Services, a predecessor to today’s Central Intelligence Agency, scientists had demonstrated a type of two-way radio system that had been used by OSS operatives in occupied territories during World War II. OSS agents behind enemy lines had used the walkie-talkie-style radios to communicate with allied aircraft. To avoid detection by German spies, the system made use of previously unexplored spectrum above 200 MHz. The creator of the system, a Cleveland inventor named Al Gross, was an ahead-of-his time wireless communications pioneer who did in late 2000.
The OSS demonstration apparently impressed the FCC and Jett, who endeavored to explain in the pages of a magazine that ritually featured Norman Rockwell illustrations how a two-way wireless phone system might work for the everyday Joe: “The same wave lengths may be employed simultaneously in thousands of zones in this country. Citizens in two towns only fifteen miles apart – or even less if the terrain is especially flat — will be able to send messages on the same lanes at the same time without getting in one another’s way.”
Today’s wireless phone business is far more prodigious that Jett could possibly have imagined in 1945. According to the wireless phone industry’s U.S. trade association, there are now 182 million wireless phone subscribers in the country who spend an average of $50.64 per month for their service. The $102 billion in annual revenues produced by the wireless industry tops the cable industry’s estimated annual revenue by $40 billion.
But it is a strategic imperative, more so than purely an economic lust, that has compelled a serious attempt by the cable industry to find a suitable wireless mate 50 years after Jett wrote about cellular communications.
The prima facie reasoning for a cable-wireless marriage is to produce a quadruple-play service the cable industry can use to match similar offerings from rivals like SBC and Verizon Communications. A combination of video services, high-speed data, wireline and wireless telephony is deemed to be essential in the new bundled services era of telecommunications. Yet for the most part, cable still lacks a deep presence in the wireless phone sector.
But a secondary pressure ultimately may prove to be more important. While cable pursues a role in connecting callers over wireless phones, the companies that are in the wireless phone business are quickly making corresponding inroads into cable’s bedrock business of subscription television. It is the emergence of this so-called “third screen” that both compels and worries the modern-day cable strategist. The idea that people are paying $15 and more each month to subscribe to a package of television channels delivered to wireless hand-held phones hits awfully close to home for the cable industry. Especially considering that the quality of telecasts and the screens embedded into phones are only apt to improve over time.
If it sounds absurd to think that hand-held phones pose a threat to cable’s historical subscription-television domain, remember that in 1981, when the FCC began to allot a pair of cellular phone licenses across U.S. cities, the idea was that a relatively thin slice of the market might want to use “car phones” to make occasional emergency calls. Today, millions of mobile phone users have untethered themselves altogether, substituting hand-held portable devices for traditional household phones connected to traditional household phone wires. That’s reason enough for the cable industry to pursue a wireless play with conviction. The last thing the cable industry wants to see is a successor to Norman Rockwell portraying the iconic American consumer who gathers ‘round the TV set, with nary a cable in sight.
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