SEPTEMBER 2, 2005 10:25 PM
SPECIAL REPORT: KATRINA: THE AFTERMATH
By Olga Kharif
BusinessWeek Magazine
After Chaos, Changes in Calling?
Damage from Katrina spurs demand for satellite phones. The disaster zone
may also become a proving ground for wireless technologies like WiMax
http://businessweek.com/bwdaily/dnflash/sep2005/nf2005092_8957_db094.htm?chan=tc
John Dark, senior marketing manager for satellite-calling provider
Globalstar, says his company is overrun with orders for phones in the wake
of Hurricane Katrina. Globalstar has signed up 5,000 new customers over the
past three days, about 20 times normal volume.
"We've seen an absolutely astronomical demand," Dark says, highlighting an
unintended consequences of what's likely to end up as one of the costliest
natural disasters in U.S. history.
"TOTAL WRITE-OFF." After Katrina's storms left hundreds of thousands of
residents without phone service and other communications, survivors and
emergency responders were forced to stay in touch by any means possible.
And there wasn't much.
Vast areas of the Gulf Coast, from Louisiana to Florida, had no regular
telephone or wireless service. Thousands of the switches and cell towers
that form the region's telecommunications network were inaccessible or left
without power -- if not demolished.
According to a memo from the Homeland Security Dept., the
telecommunications "infrastructure in New Orleans, Biloxi, and Gulfport is
considered to be total write-off." BellSouth (BLS ), the biggest local
phone company in the Southeast, estimates that 750,000 of its customers
hail from areas most heavily affected by the hurricane.
PRIORITIZING SAFETY. Albert Tobin, managing director of property
syndication for Aon Risk Services, a division of specialty insurance
underwriter Aon (AOC ), says it may take as long as a month to restore 80%
of phone services, once the flooding subsides and affected areas become
accessible. "Given the scope of the damage, the entire restoration effort
in the hardest-hit areas will take more time than BellSouth would normally
expect," according to a company statement.
In the New Orleans area, "we're not restoring anything. We're just making
sure our [13,000] employees [who work in the affected areas] are safe,"
says Joe Chandler, a BellSouth spokesperson (see BW Online, 8/31/05,
"Tackling Swamped Communications").
Little surprise, then, that survivors, police, and other emergency-service
providers are relying on satellite phones. The devices communicate via
signals beamed to and from satellites in the sky, rather than earthbound
lines or wireless infrastructure -- and so remain operable in cases where a
natural disaster has devastated networks on the ground.
ALTERING THE BALANCE? The American Red Cross, in the midst of the
largest-ever response to a natural disaster, is shipping in satellite
phones, while Globalstar donated more than 100 phones to the governors'
offices in Louisiana and Mississippi.
In the wake of Katrina, parts of the Southeast may also turn into a proving
ground for other wireless communications, such as WiMax, the technology
that provides high-speed Internet access to large areas from a single
transmission point. For starters, New Orleans might become more reliant on
wireless vs. traditional phone connections
"This may permanently alter the balance in New Orleans for the usage of
cellular vs. traditional wire-line phone service," says Roger Kay,
president of technology consultancy Endpoint Technologies Associates.
Later, the city could become the test bed for new technologies such as
WiMax, where a single antenna could blanket a town or part of a larger city
that would otherwise require a number of cell towers, he says.
WiMax is just getting off the ground, and Katrina may speed up adoption of
the largely untested technology (see BW Online, 6/21/05, "Warp Speed for
Wireless Networks").
AWAITING REENTRY. Even if they won't implement WiMax for some months,
local wireless carriers will likely replace their damaged cell sites with
the latest gear available, allowing for the fastest data transmission and
the most capacity, says Craig Mathias, founder of wireless consultancy
Farpoint Group. "When they replace the equipment, they're going to put in
newer equipment. I guarantee it'll be 3G equipment."
In the meantime, mobile-phone carriers, including Cingular Wireless, are
rebuilding where they can. On Sept. 1, Atlanta-based Cingular, the largest
U.S. cellular provider, said it had almost completely restored service in
Mobile, Ala., and Baton Rouge, La.
Disruptions continued in parts of Mississippi, including Jackson, Biloxi,
Pascagoula, Bay St. Louis, Hattiesburg, Gulfport, and Brookhaven, said
BellSouth, which dispatched helicopters to conduct aerial surveys. More
than 100 Cingular crews are working with 500 power generators and 240,000
gallons of fuel to restore communication.
Further rebuilding will hinge in part on getting the go-ahead from federal
and state authorities to reenter key areas. "We just have to wait and see
how commercial power restoration and flooding go," says Cingular spokesman
Clay Owens. "We want to get in there and start restoring the service, but
we're limited in what we can do."
MORE STORMS TO COME? A spokesman for Verizon Wireless, the No. 2 carrier,
says "service is improving in surrounding areas near New Orleans." There
are still disruptions in Mississippi and around New Orleans. The company
has rolled out cells on wheels, used to temporarily restore service. It has
also brought in technicians from around the country to do surveys and
repairs in the disaster areas.
As BellSouth surveys Katrina's physical damage, it's also tabulating the
financial cost. While the outfit hasn't yet released its own figure, CIBC
World Markets estimates Katrina will cost BellSouth about $300 million in
restoration services and equipment, plus $150 million in forgone revenue.
Verizon Communications (VZ), the largest U.S. local-telephone company, says
it's poised to lend a hand to BellSouth's efforts. The companies have been
involved in informal talks. As soon as Verizon receives a formal request,
probably some time next week, it will jump in. "We'll be doing what we
can," says a Verizon spokesperson. "We're standing at the ready."
And as Katrina marks only the beginning of what the National Hurricane
Center says may grow into a worse-than-normal hurricane season, so is the
rest of the region.
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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