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Broadening Horizons

by Grace Casselman

Predicting demand and driven by competition, Alberta’s biggest telecom players continue to invest in the next generation of hardware and network technologies.

Alberta companies and researchers are working hard at the rapidly advancing field of telecommunications - even while the rate of change in many other areas of technology has slowed down.

In the computer industry, for instance, incrementally faster computers or new versions of software just aren't revolutionizing business and society the way they once did. But in telecom, new technology continues to be developed, and with significant impact.

Nortel Networks Ltd. spent $2.2 billion US on R&D last year, says Steven Kos, director of product design control. Of that, $80 million US was spent right here in Alberta, specifically Calgary.

Much of Nortel Networks' research initiatives in Calgary focus on the integration of voice and data networks, says Kos, particularly with a hardware/software technology called the Business Communication Manager "The network continues to evolve. There's more and more pressure around getting the cost down."

Of note, 400 of the Calgary facility's 1,500 employees are focused on R&D. (Nortel production worth $2.6 billion US in revenue flows through Calgary annually, to 96 countries around the world, says Kos.)

Telus corp. says it spent $42 million in 2002 on R&D ($39 million was capital in nature). Like most telecom companies, TELUS is spending heavily developing around the Internet Protocol (IP) standard. In fact, the IP standard is sweeping across every area of electronic communications. Initially, of course, the impact was felt on data transmissions, as standardizing on IP communications let us hook up our e-mail, news groups and eventually web pages. With IP, communications are "packetized" – so bits of data travel in packets across the networks. At first, that approach was questionable for voice conversations, as users are accustomed to high-quality voice transmission (via the traditional circuit-switched networks), without pauses or delays. Yet, as the technology has developed, it's become increasingly suitable to also carry voice traffic, known as voice-over IP, or VoIP.

Last July, TELUS Corp. announced it is "transforming" its networks from traditional circuit-based infrastructure to IP technology. The first phase, migrating national long distance voice and data traffic on to a national high-speed network, is scheduled for completion by the second quarter of 2003.

"We're focused heavily on transforming the company into an IP data and wireless company; that's top of our strategy," says Tim Fell director of technology strategy for TELUS Edmonton. "There's a cost advantage to building one network rather than two."

The IP network will allow TELUS to offer new services within 12 to 18 months, such as integrated messaging. That means customers will be able to listen to and manage the voicemail messages from a computer, even forward them as e-mail attachments.

The next big hot area is expanding the concept to wireless, with corporate wireless local area networks (LANs), for instance. And Alberta's efforts are being noticed, particularly when it comes to the city of Calgary wireless research. "Calgary is the wireless capital of Canada," acknowledges Lawrence Surtees, director of telecom research firm IDC Canada in Toronto.

"There's a lot of activity in wireless," says Christian Schlegel, Canada research chair and University of Alberta professor in the area of high-capacity digital communications. (He's a professor with the provincial government's iCore initiative, meant to foster "an expanding community of excellent university-based researchers in information and communications technology.")

"The issue is making communication between A and B, as reliable as possible," notes Schlegel. To that end, he is researching error control technologies, to address problems of reliability in wireless voice communications. "Bits get misinterpreted, reducing voice quality," he explains. And as we move into higher-speed communications, this will be increasingly important. "The higher the speed, the more critical the issue."

Development efforts at TELUS Mobility, the company's wireless division, focus on emerging applications for its IX cellular network (often considered 2.5G, although some observers call it 2.75 or even 3G.) It theoretically offers data rates of 144 kilobits per second, but most users of the shared network will see 40- to 60 kilobits per second, says Chris Langdon, director of product marketing for TELUS Mobility. New applications for the technology include vehicle and fleet tracking, or expanding access to corporate customer relationship management systems to mobile devices. Meanwhile, Langdon also predicts upcoming products will incorporate integration between cellular and LAN technology. "We see down the road that these things will start to interoperate," says Langdon. (Of note, TELUS has just started to sell BlackBerry handheld devices, which connect to 802.11 wireless networks.)

Wireless research and development is also a significant part of business activity at Calgary's Wi-LAN Inc. The company spent $5.1 million on R&D in 2002 - 22% of its annual revenue of $23.1 million. And in April, the company announced it had entered into an $8.8-million R&D investment agreement with the Government of Canada.

Hatim Zaghloul, Wi-LAN's chairman and CEO, says his company's research and development efforts are generally pursuing one of three considerations: cost, size and power. Specifically, technologies need to be cheaper, smaller and consume less energy. That's particularly true in the mobile, cellular-like space, he says.

Wi-LAN is in partnership with Korea's Electronics and Telecommunications Research Institute, defining the high-speed 4G (fourth generation) phone/networking standard, which is expected to emerge in the market around 2005, reaching consensus by about 2012, says Zaghloul. However, he says trials are already underway in Korea. The companies are seeking collaboration from other partners to promote standardization.

Wi-LAN is also involved in promoting a new kind of IP standard specifically for wireless, called 802.16. Much of Wi-LAN's research is currently in the area of W-OFDM (Wideband Orthogonal Frequency Division Multiplexing). Basically, it's meant to extend the idea of the wireless LAN, to let users roam and connect between base stations. Much of Wi-LAN's research budget has been going into its W-OFDM-based LIBRA product line. The goal is to evolve those products to support 802.16a compliance. (Currently, Wi-LAN's products reportedly are about 70% compliant.)

Zaghloul says phones and mobile units will eventually be able to switch from the LAN to the cellular system. However, unlike some other efforts, it won't be a matter of switching between two systems built into one device. Rather, the one technology will be able to accommodate both systems. "It will be the same technology, just a minor shift in frequency," says Zaghloul.

At Wi-LAN Inc.'s offices, visitors (using a special communications card in their notebooks), can currently connect to the Internet via Wi-LAN's wireless corporate network. This kind of service is expected to become increasingly common among businesses. As far as wireless voice-over IP, Zaghloul predicts the voice quality in calls will be good - better than today's cellular, but there may be some small delays.

Not only are corporations starting to offer wireless LAN access on their premises, "hot spots" are springing up at airports, train stations, hotels, restaurants and cafes, although adoption seems to be further along in such cities as Toronto, Ottawa and Montreal. While some early models propose charging users for each access, Zaghloul says the future will mean "free" access for users - or specifically, costs will be absorbed and structured into the product and service fees at airports and restaurants, for instance. "To nickel and dime people - they're tired of that."

TELUS recently invested $6 million in a Toronto company called Spotnik, which has set up a long list of hot spots (also called Wi-Fi networks, based on the 802.11b standard) in Toronto. Spotnik is pushing the technology with the promise of boosting visitor traffic to various commercial locations.

When it comes to telecom research and development in Alberta, "there's a lot happening," says Richard May, vice-president of advanced technologies for Inno-centre Alberta in Calgary, a company that helps technology entrepreneurs evolve to commercial ventures (May was also the master of ceremonies for this spring's Wireless Connections 2003 conference.) Of interest, Inno-centre Alberta is looking to work with "very early stage companies with outstanding telecom technology that if could be brought to market would make a big difference."

Meanwhile, research consortium TRLabs reportedly spends $12 million annually in Western Canada in telecom research. A long list of partners in the venture includes Nortel, TELUS, the University of Alberta and the University of Calgary.

TRLabs' Network for Emerging Wireless Technologies (NEWT) is setting up a hot spot at its facilities. NEWT provides test platforms for wireless development on 802.11, CDMA cellular, and Bluetooth. (Bluetooth is a connection standard between devices in close proximity, so that cell phones, notebooks, or printers, for instance, could easily exchange information wirelessly.)

Founding members of NEWT include Sun Microsystems, IBM, Hewlett-Packard, Nortel Networks, TELUS, Calgary Technologies, the Government of Alberta, the Communication Research Centre and Western Economic Diversification Canada. Eric Larson, marketing director for NEWT, says these partners all see wireless as very huge to economic development, particularly in Western Canada.

As telecom companies push the limits of the technology's capability, they find themselves moving into new areas of business. Phone companies are not only moving into computer companies' territories, they're getting ready to compete directly with cable companies to offer television. At the same time, cable companies are apparently poised to start offering voice services.

TELUS has applied to the CRTC to sell television services over an ADSL IP network, providing set-top boxes to consumers. If that's approved, the company may launch those services later this year, says Fell, in direct competition with cable and satellite companies. Fell says TELUS expects to offer "more flexibility in the way you can purchase content, more a la carte."

In Saskatchewan, SaskTel is already selling television services. Last September, the company rolled out its Max Interactive Services, which brings high-speed Internet to consumers' televisions, as well as digital TV channels.

Meanwhile, a number of cable equipment and service vendors are working together on IP television technology, in something called the IP Television Alliance, announced in 2001. Charter members were Minerva Networks, Nortel Networks, SG1, Philips CryptoTec, Motorola, DemandVideo, Elastic Networks, Allop-tic, Inprimis, nCUBE, Pace Micro Technology, World Wide Packets, InfoSpace and Terayon.

The current "digital cable" offerings are considered the first step in that direction, says IDC's Surtees. Of interest, certain U.S. cable companies, such as Cox Communications, based in Atlanta, Ga., are publicly talking about their plans to offer VoIP services. Locally, Shaw Communications would not return calls about the issue.

However, IDC's Surtees predicts the Canadian cable companies will be players in offering voice services, although they'll let the Americans lead in the experiment. "The Canadian guys are not going to rush to be the first."

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