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AT&T Wireless launches high-speed service

Subscribers in four U.S. cities now can dial up broadband speed on their cell phones.

AT&T Wireless on Tuesday began selling next-generation cell phone service in the San Francisco Bay Area, Detroit, Phoenix and Seattle.

Two other cities, San Diego and Dallas, will get the service by the end of the year, AT&T Wireless Chief Executive John Zeglis said.

The service will let subscribers transfer data at speeds between 220 kilobits per second and 320kbps, with bursts of up to 384kbps if they have a specific cell phone based on UMTS (Universal Mobile Telecommunications System) technology or a laptop with a UMTS card, the carrier said.

To use the nation's first UMTS network, AT&T Wireless requires a one-year service contract, either the Motorola A845 or Nokia 6651, a $25 per month unlimited AT&T Wireless data plan and one of several eligible voice plans. The suggested retail price of both phones is $300. The company said it also sells a UMTS modem from Lucent Technologies and Novatel Wireless for $149.99 with a rebate.

AT&T Wireless is offering UMTS subscribers a $5 per month streaming video and audio service with movie trailers, news and sports highlights supplied by ABCNews, Fox Sports and others. Videos will only be available, however, on the Motorola phone.

"We've been talking about streaming video for years," Zeglis said. "Today the talk stops."

The upgrade satisfies an agreement AT&T Wireless has with NTT DoCoMo, the Japanese cellular service provider that owns a 16 percent stake in the carrier. AT&T Wireless' choice was either to launch a 3G network in four cities by year's end or pay a significant amount of money to NTT DoCoMo.

By escaping the threat of a payment that could have been in the billions of dollars, AT&T Wireless is erasing a possible roadblock of its proposed acquisition by Cingular Wireless. The sale is expected to close by end of the year.

The six-city launch of UMTS in the United States may end up being AT&T Wireless' last technological hurrah as an independent company. Cingular Wireless is already trialing UMTS technology in Atlanta and will take over the release in 2005, Zeglis indicated.

"Anything more than our six cities will have to come from Cingular," he said.

Half of the top six U.S. cell phone service providers have now launched 3G, or third-generation, cell phone networks, which create Net access that carriers assert can compete with the wired variety. These networks also add desperately needed voice-calling capacity to wireless carriers' overtaxed networks.

Verizon Wireless' next-generation cell phone network, which Zeglis admitted is faster than that of AT&T Wireless, currently operates in San Diego and Washington, D.C. But the reigning North American wireless speed king remains Nextel Communications, which sells wireless broadband using equipment considered a generation ahead of what Verizon Wireless and AT&T Wireless use.

Sprint will likely be the next major cell phone service provider to make the push to 3G, having sunk $1 billion into building a network set to launch later this year.

It remains to be seen how the AT&T Wireless service will measure up to the competition and whether the company will ever get a chance to extend service beyond its current markets.

Still, AT&T Wireless may be the cheapest of the 3G networks in the United States, priced at about $25 per month for unlimited access. AT&T Wireless is also offering a higher-quality business-class UMTS service for $80 a month, which is what Verizon Wireless charges for unlimited access to its 3G network.