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 Federal  Communications  Commission  FCC  99-  136 
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 APPENDIX  G:  FIXED  TELEMETRY  SERVICES 
 Some  companies  can  now  use  fixed  wireless  technology  to  monitor  their  remote  equipment  from  a  central  location,  such  as  utility  companies  monitoring  residential  meters.  Traditionally, 
 company  employees  had  to  travel  to  each  device  and  record  measurements  manually.  However,  wireless  sensor  devices  installed  in  each  remote  piece  of  equipment  can  now  transmit 
 measurements  back  to  a  company's  central  office  or  headquarters,  eliminating  the  need  for  time-consuming  travel.  Customers  of  such  companies  can  even  monitor  or  make  changes  to  the 
 equipment  themselves  from  a  remote  location  using  the  wireless  sensor  devices.  This  new  technology  is  called  fixed  wireless  telemetry.  1  The  uses  of  fixed  wireless  telemetry  include  the 
 monitoring  of  gas,  electric,  and  water  utility  meters  (often  referred  to  as  automatic  meter  reading  ("  AMR")  devices),  HVAC  systems,  gas  and  oil  pipelines,  vending  machines,  alarm  systems, 
 parking  meters,  streetlights,  smoke/  fire  detectors,  personal  computer  printers,  factory  process  systems,  photo  copiers,  and  railway  and  other  transportation  systems. 


 Fixed  wireless  telemetry  is  similar  to  mobile  data  wireless  services  in  that  both  involve  the  transmission  and  measurement  of  data  from  equipment  in  a  remote  location.  The  only  difference 
 is  that  with  fixed  wireless  telemetry,  the  objects  that  contain  the  wireless  sensors,  such  as  utility  meters  or  vending  machines,  are  stationary. 


 A.  Current  Market  Structure 
 The  fixed  wireless  telemetry  market  has  grown  since  the  publication  of  the  Third  Report,  largely  due  to  continued  deregulation  in  various  segments  of  the  utility  industry.  In  the  past  few  years, 
 many  states  have  shifted  their  utility  rate  setting  policies  away  from  asset-  based  rate-  of-  return  systems  to  performance-  based  systems  that  calculate  rates  on  factors  such  as  costs,  efficiency, 
 and  quality  of  service.  The  provision  of  fixed  wireless  telemetry  services  has  assisted  utilities  in  promoting  these  factors.  2 


 1.  Non-  CMRS  Providers 
 Both  non-  CMRS  and  CMRS  providers  are  players  in  the  telemetry  market.  The  two  major  non-CMRS  providers  are  Itron,  Inc.  ("  Itron")  and  CellNet  Data  Systems,  Inc.  ("  CellNet").  Itron  is  the 
 leader  in  the  AMR  telemetry  market.  As  of  December  31,  1998,  Itron  had  shipped  13.5  million  AMR  units,  a  22  percent  increase  from  the  previous  year,  to  403  utilities.  3  CellNet's  installed 


 1  Telemetry  is  the  transmission  and  measurement  of  data  from  a  remote  source. 
 2  Jeanine  Oburchay  &  Brian  Park,  CELLNET  DATA  SYSTEMS,  INC.,  Bear,  Stearns  &  Co.  Inc.,  Feb.  5,  1999,  at 
 8  ("  Oburchay  &  Park"). 
 3  Itron  Announces  Fourth  Quarter  and  Year-  End  Results,  News  Release,  Itron,  Inc.,  Feb.  3,  1999. 
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 telemetry  base  has  doubled  since  the  writing  of  the  Third  Report  from  one  to  two  million  units.  4  As  of  February  1999,  the  company  had  connected  two  million  telemetry  devices  5  and  was  adding 
 an  average  of  100,000  devices  each  month.  6  CellNet  has  a  total  of  4.8  million  devices  under  contract  7  and  a  Memorandum  of  Understanding  for  an  additional  312,000  devices  with  utilities 
 that  have  7.5  million  meters  in  their  service  territories.  8  When  CellNet's  wide  area  networks  under  contract  are  fully  built  out,  the  company  will  cover  more  than  35  million  POPs.  9  CellNet 
 currently  has  operational  networks  in  six  metropolitan  areas,  10  but  has  licenses  to  offer  service  in  58  of  the  top  60  MSAs.  11  In  addition  to  serving  utilities,  the  company  provides  remote 
 monitoring  for  photocopying  machines,  vending  machines,  and  home  security  systems.  12  It  is  planning  to  branch  further  into  the  non-  energy  telemetry  markets  as  it  grows.  13  Whisper 
 Communications,  Inc.  ("  Whisper")  is  a  third  provider  of  fixed  wireless  telemetry  services  to  utility  companies.  In  December  1997,  Whisper  was  awarded  a  contract  to  connect  1.1  million 
 electric  and  gas  meters  to  wireless  AMR  networks.  14 
 2.  CMRS  Providers 
 Certain  CMRS  providers  have  continued  to  branch  into  the  fixed  wireless  telemetry  market.  The  major  players  include  SkyTel,  PageMart,  American  Mobile,  Metricom,  and  Aeris 


 4  More  Than  Two  Million  Devices  Now  Online  in  CellNet  Data  Systems  Wireless  Networks,  PR  NEWSWIRE, 
 Feb.  16,  1999  ("  PR  NEWSWIRE  2/  16/  99");  CellNet  Data  Systems  Announces  1997  Fourth-  Quarter  and  Year-  End  Results,  News  Release,  CellNet  Data  Systems,  Inc.,  Feb.  9,  1998. 


 5  PR  NEWSWIRE  2/  16/  99. 
 6  CellNet  Data  Systems,  Inc.,  Integrated  Wireless  (visited  Feb.  17,  1999) 
 <http://  www.  cellnet.  com/  Home/  welcome.  html>. 
 7  Oburchay  &  Park,  at  1. 


 8  PR  NEWSWIRE  2/  16/  99. 
 9  Id. 
 10  Kansas  City,  St.  Louis,  Minneapolis-  St.  Paul,  Seattle,  Indianapolis,  and  the  San  Francisco  Bay  Area. 
 11  Oburchay  &  Park,  at  6. 
 12  PR  NEWSWIRE  2/  16/  99. 
 13  Oburchay  &  Park,  at  16. 
 14  Whisper  Communications,  Inc.,  About  Whisper  (visited  Feb.  19,  1999) 
 <http://  www.  whisper.  com/  about.  htm>. 
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 Communications,  Inc.  ("  Aeris"). 
 SkyTel  uses  its  narrowband  PCS  network  to  provide  fixed  wireless  telemetry  services.  15  SkyTel  had  104,500  devices  under  contract  at  the  end  of  1998;  however,  only  6,700  of  these  units  were 
 in  service  at  that  time.  16  SkyTel  secured  a  6-  year  contract  with  Enron  to  supply  at  least  69,000  AMR  units  to  an  integrated  natural  gas  and  electric  company  for  residential  use.  17  SkyTel  also 
 has  a  contract  to  provide  20,000  fixed  wireless  telemetry  units  to  Barringer  Instruments,  Skywire  Corporation,  the  Williams  Companies,  and  XP  Systems.  18 


 PageMart  also  uses  its  narrowband  PCS  licenses  to  offer  fixed  wireless  telemetry  services.  It  currently  has  contracts  to  provide  telemetry  services  for  environmental  control  systems,  19 
 photocopying  and  imaging  systems,  20  and  home  security  systems.  21  PageMart  plans  to  have  its  telemetry  networks  fully  operational  by  mid-  1999.  22 


 American  Mobile  acquired  ARDIS  in  April  1998  and  uses  ARDIS's  wireless  data  licenses  to  provide  fixed,  as  well  as  mobile,  telemetry  services.  For  example,  American  Mobile  provides 
 AMR  service  to  Enron's  commercial  and  industrial  customers.  23  Enron  not  only  monitors  electricity  use  by  its  customers  using  American  Mobile's  network,  but  also  allows  its  corporate 
 customers  to  monitor  electricity  use  in  their  own  regional  offices  from  remote  locations.  24 


 15  Oburchay  &  Park,  at  23. 
 16  SkyTel  Earns  Positive  Net  Income  in  4Q98,  News  Release,  SkyTel  Communications,  Inc.,  Feb.  17,  1999. 
 17  Id.;  Mtel  and  Enron  Energy  Services  Announce  Major  Service  Agreement,  News  Release,  SkyTel 
 Communications,  Inc.,  Dec.  15,  1997;  Oburchay  &  Park,  at  23. 
 18  Mtel  Signs  Contracts  for  20,000  Fixed  Wireless  Units,  News  Release,  SkyTel  Communications,  Inc.,  Sep. 
 9,  1997. 
 19  PageMart  Wireless  Announces  Strategic  Alliance  with  Pentech  to  Provide  Telemetry  Solutions  for  the 
 Environmental  Control  Industry,  News  Release,  PageMart  Wireless,  Inc.,  Sep.  15,  1998. 
 20  PageMart  Wireless  Reports  Fourth  Quarter  Results;  Narrowband  PCS  Network  Launched  Nationwide,  PR 
 NEWSWIRE,  Feb.  4,  1999. 
 21  PageMart  Wireless  Forms  Strategic  Alliance  with  ITI  to  Provide  Telemetry  Solutions  for  Home  Security 
 Industry,  News  Release,  PageMart  Wireless,  Inc.,  Sep.  15,  1998. 
 22  Antony  Bruno,  PageMart  Starts  Two-  Way  Service,  RCR  RADIO  COMMUNICATIONS  REPORT,  Dec.  21, 
 1998. 
 23  Oburchay  &  Park,  at  23;  Tony  Kontzer,  Electricity  Meter  Reading  Joins  Digital  Era,  INVESTOR'S 
 BUSINESS  DAILY,  Jul.  6,  1998. 
 24  Tony  Kontzer,  Electricity  Meter  Reading  Joins  Digital  Era,  INVESTOR'S  BUSINESS  DAILY,  Jul.  6,  1998. 
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 American  Mobile  and  Enron  will  bring  at  least  55,000  meters  on-  line  by  July  2001.  25 
 Metricom,  the  producer  of  Richochet,  uses  spread-  spectrum  radios  in  the  unlicensed  902-  928  MHz  band  of  radio  spectrum  to  offer  a  fixed  wireless  telemetry  service  called  UtiliNet  to  utility 
 companies.  26 
 Aeris  offers  a  telemetry  product  with  fixed  and  mobile  capabilities  called  MicroBurst  that  uses  the  control  channel  infrastructure  of  cellular  networks.  27  Aeris  offers  MicroBurst  by  partnering 
 with  cellular  carriers,  which  in  turn  offer  it  to  their  end  users  (including  Bell  Atlantic,  Ameritech,  U.  S.  Cellular,  and  AirTouch).  28  These  agreements  give  Aeris  a  footprint  that  covers 
 80  percent  of  the  cellular  licenses  areas  in  the  United  States  and  200  million  POPs  in  North  America. 


 Another  company,  Cellemetry  LLC  ("  Cellemetry"),  offers  telemetry  services  using  the  underutilized  portions  of  cellular  telephone  networks  to  send  short  data  messages.  29  Forty 
 cellular  carriers  offer  Cellemetry  in  their  license  areas,  including  BellSouth,  which  owns  40  percent  of  Cellemetry.  30  With  these  agreements,  Cellemetry  covers  82  percent  of  the  cellular 
 license  areas  in  the  U.  S.,  which  cover  80  percent  of  the  U.  S.  population,  and  has  the  highest  number  of  deployed  telemetry  units  connected  to  cellular  networks. 


 In  addition  to  Cellemetry,  BellSouth  offers  telemetry  services  to  systems  that  must  transmit  larger  amounts  of  data,  such  as  commercial  alarm  systems  and  vending  machine  monitoring 
 systems,  through  BellSouth  Wireless,  previously  RAM  Mobile  Data.  This  network  covers  93  percent  of  the  business  population  in  the  U.  S.  BellSouth  plans  to  double  the  number  of  base 
 stations  it  uses  for  its  telemetry  operations  from  May  1998  to  May  2000.  31 
 25  Id. 
 26  Metricom,  Inc.,  Products  and  Services  (visited  Feb.  22,  1999) 
 <http://  www.  ricochet.  net/  products/  corp.  htm>;  Metricom,  Inc.,  Welcome  to  UtiliNet  (visited  Feb.  22,  1999)  <http://  www.  metricom.  com/  products/  industrial/  utilinet.  html>. 


 27  AirTouch  to  Offer  Aeris  MicroBurst  for  Short-  Burst  Data  Applications;  Aeris  Nears  Completion  of 
 National  Footprint,  BUSINESS  WIRE,  Feb.  8,  1999. 
 28  Id. 


 29  Cellemetry  LLC,  Technical  Overview  (visited  Feb.  22,  1999) 
 <http://  209.86.119.56/  html/  techoverview.  html>. 
 30  Recent  Agreements  Give  Company  "Largest  Cellular  Data  Services  Network  in  World,"  News  Release, 
 Cellemetry  LLC,  Jan.  11,  1999. 
 31  Nancy  Gohring,  Telemetry  Takes  the  Lead:  Small-  Volume  Wireless  Data  May  Be  First  to  Make  a  Profit, 
 TELEPHONY,  May  11,  1998. 
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 B.  Potential  Growth 
 There  is  still  great  potential  for  the  fixed  wireless  telemetry  industry  and  many  segments  of  the  market  remain  untapped.  32  An  analyst  from  the  Yankee  Group  stated,  "We  believe  that 
 telemetry  will  grow  significantly  over  the  next  five  years,  making  a  noticeable  impact  on  the  $200  billion  deregulating  energy  industry  and  other  industries.  The  value  of  telemetry,  though 
 virtually  unrecognized  today,  is  increasing  as  it  becomes  technologically  feasible  and  cost-effective.  Its  possibilities  are  vast."  33 


 Only  two  percent  of  the  more  than  270  million  utility  meters  in  the  United  States  have  been  telemetrized.  34  The  Strategis  Group  believes  37  percent  of  those  will  be  connected  to  fixed 
 wireless  networks  within  the  next  five  years,  with  the  majority  being  electric  or  gas  meters  in  hard-  to-  reach  rural  areas.  35  One  analyst  has  stated  that  there  is  an  "opportunity  for  130  million 
 [non-  utility]  remote  monitoring  sites  nationwide"  in  addition  to  the  millions  of  potential  utility  sites.  36  Another  analyst  has  predicted  that  telemetry  systems  using  Motorola's  ReFLEX 
 technology  (a  technology  also  used  for  narrowband  PCS  applications)  will  have  11  million  units  in  service  by  the  end  of  2001  and  40  million  by  the  end  of  2005.  37  And  CellNet  itself  admits  that 
 is  has  hardly  scratched  the  surface  of  the  market,  stating  that  its  two  million  deployed  telemetry  devices  represent  only  one-  half  of  one  percent  of  the  potential  U.  S.  utility  metering  market.  38 


 32  Yankee  Group  Predicts  Telemetry  Growth,  PAGINGNOW,  Jan.  8,  1999;  CellNet  Data  Systems,  Inc.,  What 
 the  Media  and  Analysts  Are  Saying  about  CellNet  (visited  Feb.  17,  1999)  <http://  www.  cellnet.  com/  News/  mediaMain.  html>. 


 33  Yankee  Group  Predicts  Telemetry  Growth,  PAGINGNOW,  Jan.  8,  1999. 
 34  Whisper  Communications,  Inc.,  About  Whisper  (visited  Feb.  20,  1999) 
 <http://  www.  whisper.  com/  about.  htm>. 
 35  Nancy  Gohring,  Telemetry  Takes  the  Lead:  Small-  Volume  Wireless  Data  May  Be  First  to  Make  a  Profit, 
 TELEPHONY,  May  11,  1998. 
 36  Oburchay  &  Park,  at  1,  17. 


 37  DRC  Projects  Telemetry  Applications  for  ReFLEX,  PAGINGNOW,  Feb.  17,  1999  (quoting  Brian  Cotton,  an 
 industry  business  manager  for  wireless  communications  and  telecommunications  transmission  practices  for  Frost  &  Sullivan). 


 38  CellNet  Data  Systems,  Inc.,  Integrated  Wireless  (visited  Feb.  17,  1999) 
 <http://  www.  cellnet.  com/  Home/  welcome.  html>. 
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