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Verizon Wireless takes the road less traveled

The carrier's chief technical officer, Dick Lynch, talks strategy as the mobile industry enters a new era.

Verizon Wireless, jointly owned by Verizon Communications and European cell phone operator Vodafone, has always been a bit of a maverick.

When most mobile operators in the world built their networks on the GSM (Global System for Mobile Communications) transmission standard, Verizon went for CDMA (code division multiple access), a transmission technology that enables multiple calls to be carried over a single channel.

When other mobile carriers adopted Java for developing cell phone applications, Verizon went with Qualcomm's BREW (Binary Runtime Environment for Wireless). And now, as it looks as if mobile operators in Europe are leaning toward DVB-H to deliver streaming video on cell phones, Verizon has already committed to another technology: MediaFlo.

Verizon's risk taking seems to have paid off. The company has consistently scored high in customer satisfaction surveys, which has translated into some of the lowest churn rates among wireless carriers in the United States.

The man behind much of this success is Dick Lynch, Verizon Wireless's executive vice president and chief technical officer. In cell phone years, Lynch is what you might consider an old timer.

As CTO of Bell Atlantic Mobile back in 1995, and later as Verizon's CTO, he led several industry initiatives, including the advancement of CDMA into a commercial wireless offering and the deployment of the EV-DO (Evolution Data Optimized) wireless protocol for third-generation networks. Earlier this year, he became a fellow of the Institute of Electrical and Electronics Engineers (IEEE), one of the most prestigious distinctions in the field of electrical engineering.

CNET News.com caught up with Lynch at the industry's recent CTIA Wireless IT & Entertainment 2006 conference in Los Angles to get his take on a variety of hot topics, including mobile advertising, 4G networks and mobile TV.

Q: There's been a lot of talk recently about mobile-phone operators inserting advertising into their services. I know that Verizon Wireless has been testing mobile ads. How do you envision that the experience will be for consumers?
Lynch: From a technology standpoint, we will use SMS (for text messages) and MMS (for multimedia content) messaging to do a lot of the push advertising. There could be electronic coupons that will have a reader device, so people can redeem them. We'll be able to do some location service functions, so when you go to a new city, you'll get restaurant or hotel information. We'll just push that information to the phone when you arrive.

Before I decide on a particular technology, I'd rather take my time and see what the technology requirements will be, then have a bake-off between technologies.

What if people don't want these advertisements?
Lynch: There will be an option to opt out of the process. We won't be ramming ads down people's throats. Some people may not see any advertising, and they'll be willing to pay accordingly. And people who want to see them will also pay accordingly.

Verizon has agreed to be the first mobile operator to use Qualcomm's MediaFlo mobile broadcast network to offer live television on mobile phones. Last year, there was talk from Qualcomm that the network would be ready in the fourth quarter of this year. How are things shaping up?
Lynch: Some of the cities are up and running now. And I expect we will have service in some cities available by the end of the year.

Verizon already has its V Cast mobile-video service. Why do you need MediaFlo, too?
Lynch: V Cast and MediaFlo were designed for different things. MediaFlo offers real-time streaming video services and scheduled programming. V Cast is an on-demand clip service.

One of the nice things about MediaFlo is that it provides a high-quality network for streaming video. Other carriers' mobile services that say they are streaming over an EV-DO network quite frankly don't have the proper quality of service in place.

Why did Verizon Wireless choose MediaFlo, which is a brand-new technology, instead of DVB-H (Digital Video Broadcasting--Handheld), which is based on existing standard technology?
Lynch: That's easy. We did a bake-off of the technologies, and MediaFlo came out the early market leader. It also has long-term characteristics that make it a better technology.

Right now, Verizon Wireless is the only operator supporting MediaFlo. And the No. 1 and No. 2 handset manufacturers in the world--Nokia and Motorola--are throwing their weight behind DVB-H. Does that concern you?
Lynch: Not really. We have multiple handset manufacturers for our MediaFlo phones in advance of our launch.

So which companies are making the handsets for you?
Lynch: We haven't announced that yet. But look where our handsets have traditionally come from. You shouldn't be surprised to see some of the same names. And I wouldn't be surprised to see one of these others you mention, that are supporting DVB-H, also making handsets for MediaFlo.

Verizon Wireless has been rolling out its 3G network based on EV-DO for more than a year. And now you're upgrading the network to EV-DO Revision A. How does the landscape change, once you have Revision A deployed?
Lynch: We have three networks right now. There's the 1XRTT network, which we use for voice and SMS services. We'll have no problem serving customers on that for years to come.

Then we have EV-DO Revision Zero, and we've had some good success with that so far. We've got embedded chips in laptops and mobile devices. With Revision A, we get the benefit of higher uplink speeds and lower latency. It gives us a real path to a nice push-to-talk service that's even better than the one we have now.

Revision A also gives us an opportunity to do real (Internet Protocol)-based services, like interactive gaming, laptop video conferencing and things like that. Revision A also has quality-of-service controls. And since it's a pure IP network, it gives us a great runway for future services. So I think we are in good shape until we need to find a 4G network.

Speaking of 4G, Sprint Nextel announced recently that it plans to use WiMax to build a new 4G network. What do you think of that?
Lynch: Well, first of all, the ITU, International Telecommunications Union, which defines 3G and 4G, hasn't even defined 4G yet. So we don't even know what 4G is yet. What we do know is that the next-generation wireless network will offer faster speeds and lower latency.

I think Sprint is using 4G terminology in an attempt to suggest what they would like to see. But I'll hold judgment for now. For me, to build another network implies that I have a need for a network that isn't being served by my current networks. I acknowledge that day will come, but I don't see a need now.

Before I decide on a particular technology, I'd rather take my time and see what the technology requirements will be, then have a bake-off between technologies.

What do you think of WiMax as a technology? Is it even a contender to become the basis of 4G wireless?
Lynch: WiMax is certainly one of the technologies we are considering. But it also makes sense for us to look at EV-DO Revision C and LTE (Long Term Evolution). I have to know the application that I want to enable before I can choose a solution. I have time to look at all of them.

One more thing we know about 4G is that all the technologies being considered--WiMax, EV-DO Revision C and LTE--are all based on OFDM (orthogonal frequency division multiplexing). So we probably can surmise one more thing about 4G, which is that it will likely be based on OFDM. But I'm not making a premature decision on any one of these technologies.

T-Mobile is supposedly getting ready to launch a new service that will allow customers to switch between its cellular network and a home Wi-Fi network when they're in their homes. Will Verizon Wireless offer a similar converged Wi-Fi/cellular service?
Lynch: I see Wi-Fi as being synergistic with any wide-area technology, and eventually, all wide-area technologies will have a hook to Wi-Fi. But the systems out there today are premature. How do you hand off between the cellular network and the Wi-Fi network transparently? And how do you handle security? When that device is on the Wi-Fi network, there is an opportunity to get all kinds of worms and viruses that can then be brought onto the cellular network.

Until I see the right focus, I will be reluctant. We won't put out a half-baked offering that will disappoint customers. I also think only a subset of customers really want this service, anyway. Most people just want a voice service that works everywhere.

What's the biggest challenge Verizon Wireless faces in the next few years?
Lynch: Our biggest challenge is going to be enabling the network for voice over Internet Protocol (VoIP). We just need to do it. Not because the customers are unhappy. The 1XRTT network is doing just fine and will be there for years.

But landline and enterprise worlds are moving full speed ahead with VoIP. And it will be necessary for us to move in that direction to enable converged services. There will be certain applications for voice and video that will be IP-based. And while it isn't there yet, eventually, there will be a cost benefit to using VoIP instead of the circuit-switched network we use today.

When will you be able to move to VoIP?
Lynch: When we have the EV-DO Revision A network ubiquitously deployed. The latency and throughput on 1XRTT network aren't such that we can do VoIP on that network. And it wouldn't make sense for us to put it on MediaFlo, because it's a broadcast network. Even though Revision Zero is IP-based, its uplink speed is too slow. Revision A is a high-quality network with faster uploads, so it's logical to use that network.

How big a deal is it to make this switch to VoIP?
Lynch: Well, we've already got the basic network in place. And we're already upgrading to Revision A. Then it's just a matter of layering higher-level capabilities and adding some hardware and software throughout the network. It's actually much easier than trying to build a network from scratch.

Verizon Wireless consistently gets high marks for its reliable network. What are you doing differently from your competitors?
Lynch: I've been an absolute fanatic about making the network better every year. We spend about $6 billion every year on the network. Yes, we're spending some of this on EV-DO and EV-DO Revision A, but a big portion of that money goes toward just making the network work. It's like that saying, "It's the basics, stupid!" You've got to get the basics right. The vast majority of our customers do nothing but voice and text messaging.