Enter the so-called third generation--or 3G--which generally refers tonetworks capable of connecting to the Internet at speeds 40 times therate of today's cell phones. This level of service promises Internetconnections fast enough to download streaming audio and video files,swap digital photos, and hold teleconferences. It also uses theexisting spectrum space more efficiently and increases the speeds withwhich basic data can be transmitted over wireless devices.

While leading wireless advocates concede that 3G technology in theUnited States is not ready yet, they remain optimistic about itsfuture. "A 3G wireless device will become a portal to the office,"says Liz Altman, vice president and director of business developmentin Motorola's Personal Communications Sector in Libertyville, Ill."With all of 3G's amazing abilities, being out of the office willbecome less of a perceived handicap."

Why 3G is going nowhere, fast

So why the delay in moving toward the new world of wireless? To beginwith, the telecommunications industry hasn't been immune to theslumping economy. Motorola, in particular, laid off about a quarter ofits workforce by the end of 2001 in an attempt to get back in theblack in 2002.

Another major obstacle is a shortage of available spectrum--theairwaves that carry the calls and messages. Much of the availablespectrum has been allocated to the U.S. Department of Defense, whichisn't willing to part with it. Prior to Sept. 11, the FederalCommunications Commission had been negotiating for spectrum, but thosenegotiations are no longer a priority for the Defense Department. Inaddition, carriers and vendors alike need to commit billions ofdollars to licensing fees for the spectrum space and investments inhardware for the new technology. Finally, although most people areimpressed when they see the fancy handheld devices associated with 3Gservices, they blanch at the prices, which are predicted initially tocost 50 percent to 80 percent more than current cell phones.