Vol. 12, No. 3,009 - The American Reporter - October 19, 2006

Market Mover

by Mark Scheinbaum
American Reporter Correspondent
Clewiston, Fla

Printable version of this story

CLEWISTON, Fla. -- In the center of the Florida Peninsula's hurricane zone, with the new storm season two weeks away, the importance of mobile cellular communications has ascended to pre-eminence in the realm of public safety and personal security.

Cellphones are the new lifeline, the new hope, the new dial tone.

The American Reporter asked the six largest national cellphone providers to respond to a questionnaire involving what they have done since Hurricanes Katrina, Rita, and Wilma to prepare and/or upgrade for a possible new round of killer hurricanes (three major storms are expected to hit the United States this year). Only Sprint Nextel responded.

I had been a client of AT&T Wireless analog and digital, personal and corporate, data and voice services for 15 years, and was grandfathered into the new Cingular Wireless. The fact that Sprint Nextel was the sole provider to care enough to respond to you (through me), and respond in detail with an invitation to seek more information on emergency communications, makes them a likely candidate for my future business.

As laymen in the world of high tech, it is tough for us as mere consumers to grasp the importance of what is going on in the world of emergency preparedness.

On April 24 of this year, a public interest group called the First Response Coalition issued a report which concluded, in part:

"... Many first responders in eight hurricane-prone states in the Gulf Coast and Atlantic regions still do not have the necessary equipment and resources for communications interoperability ... in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Texas ... improving first-responder communications before the next catastrophic storm arrives is imperative."

Okay, civil defense amateurs, let's take this one item at a time. The lack of radio contact between fire, police, para medics, state governors, National Guardsmen, etc., which was so tragically evident immediately after the terrorist attacks on 9/11 and replicated in New Orleans and elsewhere last year are still with us. Joe can't talk to Mary, and Officer Friendly is not on the same frequency as Captain Courageous.

On the macro level, the installers and developers of the latest wireless technology need to step up and solve these compatibility problems. Read further on and you will see that Sprint Nextel claims to be doing just that. On the micro level of your living room, garage, bedroom, office, or den, things are still a little scary. I used the "dialtone" example because of my own experiences growing up in New York and working as a young newsman through major blackouts in big cities, and then elsewhere in the country. and sometimes overseas, covering a number of man-made and natural calamities. The dialtone was the constant. Some phone executive once explained to me that the big concrete buildings called "telephone exchanges" in every neighborhood housed big wheeling, whirling generators giving out cycle tones which let you know, even in total electric failures, that your residential or commercial phone worked - proof through the night that the dialtone was still there. When more private communications systems in our offices and cordless phones in our homes came into wide use, and super-hurricanes resulted in weeks instead of days without power while diesel-fueled phone-company emergency generators eventually ran out of fuel ... well, you get the idea.

In South Florida in recent years we found ourselves in post-Frances, post-Jean, post-Charlie, post-Katrina (yes, Katrina hit South Florida before Louisiana), and post-Wilma with no residential dialtone and little or no cellular phone service.

Residents literally drove up the Florida Turnpike to a rest-stop area where the Florida Highway Patrol had gotten one phone tower operational so the could telephone loved ones before their batteries went dead. For several days, AT&T Wireless customers heard a recording each time they dialed out saying that if callers provided a credit-card number their calls would be routed through an unnamed and unknown provider in the Bahamas for $2.99 per minute. In Clewiston, at the southern tip of Lake Okeechobee, hurricanes are a way of life - and too often a way of death. Only the historic Clewiston Inn - the unofficial meeting-place and hostel of the American Sugar Company - looks recovered from last year's storms. Impoverished towns nearby - Belle Glade, South Bay, Pahokee and Moore Haven - have heard Army Corps of Engineers reports (although their veracity is in dispute) predicting failures of dikes around the gigantic, landlocked lake. There, communications that are rapid and reliable will save lives. Sukhi Sahni, a spokesperson for Sprint Nextel, says that her company's "disaster preparedness efforts set us apart from the rest of the industry." What Sprint Nextel, its resources and employees have done and are doing can be summarized as:

  • A corporate Emergency Response Team is in place to work with public safety officials, and an Enterprise Incident Management Team has been prepped and drilled to oversee deployment of manpower and resources around the clock in case of a hurricane or another emergency, what they call a "large-scale" event. As far as I can tell, no cap on overtime, salary, or equipment spending has been placed on these teams, period.
  • If all local phone lines and cell towers are down, Sprint Nextel will bring in "SatCOLTS," a system which can "deploy cell coverage anywhere, without the need to connect to the incumbent phone company." Yes, I've seen similar set-ups at the World Series and concerts, but it's nice to know that they will be here in Florida for emergency deployment. They are also "hardening" the physical towers and antenna sites to hopefully diminish any down time.
  • The SatCOLTs and something called COWs are on standby throughout Florida and elsewhere, ready to be dispatched immediately to any impact area. In tandem, these two systems eliminate the need for any hookups to brand-new switching facilities.
  • Basically, Sprint Nextel has a bunch of mini-mobile phone companies ready to roll into the field, with independent power supply and transmission capability. My guess is that Verizon, T-Mobile, Cingular, Alltel and others have similar capabilities, but you can't tell by their responses to us. Maybe they only given that information to the National Security Agency along with a list of our phone calls.
  • In the first quarter of this year, Sprint spent $1.1 billion primarily and specifically to improve network quality, expand capacity, and build a greater "mobile broadband footprint." They claim this first-quarter commitment was not by accident; in reality, it's part of an effort to focus on "hardening cell sites to ensure maximum network uptime, even after intense storms." By the end of this year, Sprint Nextel plans to spend more than $6 billion on wireless and wireline networks.
One might suppose that even if our residential phones (which many of us hardly use) and cellphones are dead for two or three weeks, we would get some communal solace in the knowledge that the wireless industry has solved or almost solved that macro problem of "first-responder communication."

But this is false on its face. The nation is at war, and for those of us with kids serving in the military, since 9/11 we have seen the first responders - "and they are us," as Pogo said. Our ability to call in a downed electric line, a woman trapped beneath a tree, a diabetic neighbor in need of a bag of ice to preserve his last few doses of insulin, or the elderly uncle who evacuated but whose location is unknown, is a vital part of the first response to any disaster.

Only history will tell whether the public information officers I emailed just dropped the ball or are grossly underprepared for a new round of hurricanes. Only another major hurricane will tell if Sprint Nextel caught a lucky break by lucky timing, or if they are head and shoulders above the three players still on top of the wireless industry.

Keep in mind that the SP in SPRINT came from the Southern Pacific Railway. Sprint figured out that the tens of thousands of miles of railroad siding could be used to carry pipes, conduits, and lo and behold, conventional and fiber optic cables, housings, and equipment for long distance communications on land that they already owned. Their innovation was the easiest and biggest "Duhhhhhh?" on Wall Street, as in "Duhhhh, why the hell didn't I think of that?"

So, to see if Sprint Nextel is just talking the talk or walking the walk, let's all play Wall Street analyst and tune in May 22 at 8am ET for the Lehman Brothers Wirelines, Wireline and Media Conference. Sprint Nextel CFO Paul Saleh will be speaking, and you can listen to the live audio feed at http://www.sprint.com/investors to find out where else they are spending money. The webcast will be maintained on their site for 30 days afterwards.

AR Correspondent Mark Scheinbaum comments on business on Doug Stephan's "Good Day" RadioAmerica network program and serves as chief investment strategist for the Boston Stock Exchange member firm Kaplan & Co. Securities in Boca Raton, Fla.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

Site Meter