308 lines
17 KiB
Plaintext
308 lines
17 KiB
Plaintext
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# <Tolmes News Service> #
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# ''''''''''''''''''''' #
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# > Written by Dr. Hugo P. Tolmes < #
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Issue Number: 07
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Release Date: November 19, 1987
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Much of this issue deals with cellular phreaking and cellular technology.
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$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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TITLE: Federal Sting Nets 26 for Cellular Phone Fraud in NYC
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FROM:
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DATE: April 15, 1987
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NEW YORK-
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A free ride on the nation's airwaves ended abruptly here late last month when
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FBI and Secret Service Agents rounded up 26 people for using illegally re-
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programmed phones that billed other parties, some of them fictitious, for an
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estimated $40,000 a month worth of airtime.
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The arrests culminated a six-month undercover operation by the FBI and
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Secret Service in cooperation with NYNEX Mobile Communications Co., during
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which agents managed to infiltrate a network of fraudulent instlation shops,
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the FBI said.
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Those arrested, including a plumber, a hair stylist, a bus driver, a real
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estate businessman, and an electronics technician, were arraigned the week of
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the roundup in U.S. District court in Brooklyn, but no trial dates had been
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set by press time, according to NY FBI press officer Joe Valiquette.
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A maximum jail term of 10 years and a fine of up to $250,000 could be levied
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for the most serious offence with which the arrested were charged, law
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enforcement officials said here.
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The 26 were charged in the investigation allegedly were using mobile phones
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with counterfit electronic serial numbers and number assignment modules that
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enabled other parties to be billed for airtime use.
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The arrests "represent the first of a series of inatives undertaken jointly
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by the FBI and Secret Service to target fraud in emerging technologys" the FBI
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said. The bureau added that the investigation was conducted in accordance
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with federal fraud ststutes and made aggresive use of a statute drafted
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originaly to address credit card fraud.
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At a press conference here after the arrests, the FBI reportedly estimated
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the undercover operation put an end to fraud costing local operators about
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$40,000 a month. Officals added that carriers accross the country loose about
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3 million annualy to fraud.
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Thomas Sheer, FBI assistant director and head of the office here, complemented
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NYNEX' participation in the sting operation, saying, "Recent technological
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advances in computerized telephone switching equipment and billing systems
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were instrumental in allowing law enforcement to ficus on this crime problem
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and will assist investigators in keeping this problem in check.
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The arrests prompted Audiovox Corp. of Hauppauge, NY to dash off a press
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release to the mobile industry highlighting aones to prevent fraud oof the kind
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charged in the FBI and Secret Service
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operation.
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An algorithm built into the software of Audiovox phones prevents the
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illegal alteration of memory chips, the firm said.
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NOTA:
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The next article also deals with cellular phone fraud busting.
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$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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TITLE: 18 Are Seized in Illegal Use of Mobile Telephones
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FROM: The New York Times
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DATE: March 27, 1987
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Yesterday's arrests, which started at 6 AM and took place at homes and
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places of employment, mostly in Brooklyn was carried out by 70 FBI and
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Secret Service agents.
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The 18 people who had the illegally altered chips installed "awoke
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this morning to find that their cellular telephones had been disconnected"
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electronically, Mr. Sheer said at a news conference at the bureau's office
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at 26 Federal Plaza in lower Manhattan.
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The officials said the arrests followed a six-month investigation that
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used the use of a confidential informer who installed the chips and Federal
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agents working under cover. The authorities acknowledged the cooperation
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of the Nynex Mobile Communications Company in the investigation.
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Mr. Sheer said that the fraud, which was not the product of an organized
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conspiracy, cost local mobile telephone companies about $40,000 a month and
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that nationwide, carriers of cellular services were losing about $3 million a
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year because of the frauds.
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The authorities gave not details about he alteration of the chips.
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Among the cellular telephone users who were arrested were a plumber, a
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hair stylist, a gasoline station owner, a physician, a student and a diamond
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merchant, as well as several business executives. Most lived or worked in
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Brooklyn, but they did not know each other, the authorities said.
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Andrew J. Maloney, the United States Attorney for the Eastern
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District, said in a statement that the cases against those arrested would be
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presented to a Federal grand jury in Brooklyn. The most serious charge that
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could be brought against each carries a maximum term of 10 years in prison and
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a possible fine of $250,000.
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According to the Federal authorities, each cellular mobile telephone
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has a memory chip containing a mobile identification number, or MIN, and
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another containing an electronic serial number or E.S.N. When a mobile
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telephone call is made, the two numbers are automatically transmitted.
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The mobile carriers make a computer check of the E.S.N. to see if it is
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valid. If it is, the call goes through and the cost is billed to the billing
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number provided by the M.I.N. chip.
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By using illegally reprogrammed chips, the Federal complaint said, other
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people were billed for calls made by those participating in the fraud.
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Those arrested were arraigned in United States District Court in
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Brooklyn and released in their own recognizance.
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$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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NOTA:
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I have only article. Certain portions of this article
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have appeared in an issue of 2600 Magazine, but only a very small section.
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$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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TITLE: Hello Anywhere
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FROM: Business Week
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DATE: September 21, 1987
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For longer than he cares to remember, Peter Preuss has been the
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kind of customer that phone companies dream about. Anxious to keep abreast of
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his various interests, including a San Diego cancer research foundation,
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Preuss has always kept a phone within arm's reach. There are 24 of them in
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his three-bedroom house, two in the master bedroom alone. Then, in 1985,
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Preuss reached nirvana. General Electric Co. introduced a
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battery-powered cellular phone that he could use almost anywhere. Now there's
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a phone in each of Preuss's three cars- and, of course, in his attache case.
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One day last month, impatient with standing in a long airport ticket line,
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he used his briefcase phone to get his seat assigned through the airline's
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reservation system- and went directly to the gate. A couple of days later he
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used the same phone to wind up an interview as his plane taxied down the
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runway at Washington's Dulles International Airport. It may not be
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the Industrial Revolution, but cellular phones are transforming the way
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individuals communicate. In the 111 years since Alexander Graham Bell
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summoned Mr. Watson, cars have replaced the horse and buggy, planes have
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displaced passenger trains, and computers have made other business
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machines obsolete. But the telephone has stayed essential the same: a box
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connected by wire to a wall. Now, in one swift stroke, mobile phones are
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shrinking the world even more.
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EASY AS RADIO
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Anyone who can drive and talk can drive and phone. Nils Ingervar Lundin,
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chief press officer of Swedish telecommunications equipment maker L.M.
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Ericsson, even likes to ring up reporters in Stockholm. Cellular phones
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mean less wasted time, higher productivity, faster-arriving ambulances,
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and smarter cops-smarter crooks, too. Can't find a pay phone? Use your
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briefcase. Raves Barbara Schultis, a Freeport (N.Y.) real estate borker who
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makes about $150 worth of car phone calls a month arranging deals. "I'd die
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without it." One note of caution: Mobile phones also may mean no place to
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hide. There certainly won't be a phone in every car until prices fall from the
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current $1,200 per phone, a fixed month charge of $25 to $50, and 35 to 50
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cents a minute in calling charges to the average customer- vs. the pennies
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per minue charge for regular residential phone calls. The magic
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figure for developing a mass market is less than $500 for the phone, says
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Geroge L. Lindemann, chairman and co-owner with Fort Worth investors Sid
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Bass and Richard Rainwater of New York-based Metro Mobil CTS Inc. But he
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expects to see such prices within five years. In the meantime, a lot of buyers
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aren't waiting. True, the so-called churn rate for carriers is high:
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One-third of the industry's customers drop out every year. Still, the
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Cellular Phone Industry Assn. predicts that more icans will
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have mobile phones by the end of this year, up 40% from a year earlier.
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The amount spent in the U.S. on cellular phone service jumped eightfold
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from 1984 to 1986, to $600 million. That figure is likely to nearly double
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this year, says market researcher
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Dataquest Inc. and by 1990 the seven Bell regional operating companies, GTE
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Corp., big independents such as McCaw Communications and Linn Broadcasting-
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plus dozens of smaller carriers - should rake in $2.6 billion a year from
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cellular service. Equipment sales are rising, too. Motorola, NovAtel, NEC and
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other top manufacturers will sell about $285 million worth of cellular phones
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this year, a 22% top over 1986. And Motorola, AT&T, and others will sell
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the phone companies $555 million worth of cellular network equipment in
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1987-up 37% from 1986.
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Cellular phones are becoming riqueuer for anyone who spends a lot of
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time in the field, and not just for construction executives, architects,
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and traveling salespeople. when James Webb, a sweet-corn farmer near Albany,
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N.Y., put a mobile phone in his tractor last year, he eliminated a broker and
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doubled his 20 or so distributors to order directly, boosting revenues at
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his Gold-Harvest Farms & Nursery by 15%. That far offsets the $250 or so a
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month he spends on mobile calls during the harvest season.
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"The potential is almost unlimited," declares John T. Stupka, chief
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executive at Southwestern Bell Mobile systems. At least he hopes so.
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Southwestern Bell Corp. is awaiting court approval for its $28 billion
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acquisition of the cellular paging businesses of New Jersy financier John
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W. Kluges's Metromedia. That will make Southwestern the nation's
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second-largest cellular operator. Analysts say that because of the hoopla
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over the industry's projected growth, only sugar-plum fairies float farther
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that the market values of key independant cellular phone companies.
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For instance, shares of Seattle-based McCaw Communications
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Inc., the nation's largest cellular carrier, with holdings in 94 markets,
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were tentatively priced at $17 to $20 in early August when underwriter
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Burnham Lambert Inc. announced plans to sell 12% of the company- some 10.5
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million shares. On Aug. 8 the stock opened at 21.75 and eventually settled
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at 24.75, putting McCaw's market value that day at $2.4 million. The McCaw
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offereing underscores the huge gamble some people are taking in cellular
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investments. McCaw, with a record much like most cellular carriers, lost $38.5
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million in 1986, almost double its $12.9 million loss in 1985. Still, the
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market is valuing it at about $70 per initial customer, which the industry
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translates by taking the population of a sample market and multiplying it by
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the percentage ownership a company has in a real cellular franchise. That's
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three times what it cost into cellular companies just a year ago. Indeed,
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last-minute investors could not keep holding the bag. The more conservative
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ones are using one of the several regional Bell companies spun off in
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American Telephone & Telegraph Co.'s breakup as a cellular plalar operators in t
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he so-called top markets- big cities where commuters
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travel long distances - are likely to prosper. But independant operators in
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the hundreds of smaller markets around the country might not. Warns Robert B.
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Morris II, vice-president and telecommunications analyst at Prudential
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Bache Capital Funding, says "they're not all created equal. With the bigger
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markets, you're picking the low-hangin fruit."
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The primary reason for cellular's popularity is that is works. One
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relative, the citizens band radio, brocasts more static than information
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and is open to eavesdropping for miles around. An ancestor, the original car
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phone, relied on a central antenna and an operator to connect a call. Put a
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hill between you and the antenna, and communicatons stopped.
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By contrast, cellular technology keeps signals pure. A call from a car
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or portable phone travels via radio waves to "cell" stations that have been
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places strategically throughout a calling region. A central switching
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station does two things: It connects that radio signal to the regular public
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phone network. Also, as the car cum phone travels from one cell to the
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next, the switch seamlessly hands off the signal from one receiving tower to
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the next. The result: fire battalion chiefs in Colombus, Ohio, can instantly
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tap expert advice on how to handle even the most obscure chemical spill. At a
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disaster scene, they simply connect their portable computers to their
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cellular phones and log onto a national emergency materials data base. There's
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no denying that mobile phones carry a certain cachet. "Have you ever
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noticed," says Richard H. Conroy, a sales representative at Georgia-Pacific
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Corp. in Los Angeles, "that when people call you from a car phone they always
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make sure to point out they are calling you from a car phone?"
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Even gimmick makers have been quick to capitalize on this. W-D
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Industries Inc., of New York City, sells a "Sport-E Imitation Cellular
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Phone Antenna" that lets any caller give off the power vibes of a cellular
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phone owner- for only $4.95.
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Snob appeal aside, however, many people need mobile phones.
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Wheelchair-bound grandmother Jane Miller, in Oklahoma City, keeps a
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portable handy when she's away from her home phone. In Scandinavia, many
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fishing fleets now communicate via cellular radio instead of over the
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public airwaves via ship-to-ship radio. the idea is to map strategy without
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competitors listening in. Felix Grucci, president of the Long Island company
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that staged the fireworks at last year's Statue of Liberty centennial
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celebration, says Fireworks by Grucci Inc. often uses cellular phones to
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coordinate detonations- because they pick up less interference than
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walkie-talkies. When the phone system crashes at Nordstrom Inc.'s department
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store in Seattle, employees open a suitcase-size bag, pull out a
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five-phone portable system, and plug it into a wall socket- and the store is
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back in business.
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Cellular technology also promises to help hold down the cost of phone
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service in rural areas. Currently, some carriers charge cusregions a small fortu
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ne to run phone lines. Now some are looking to cellular
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phones to bring down these costs. U.S. West, one of the seven regional AT&T
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spinoffs, is test-offering "fixed" cellular phones. It's charging a $1,795
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one-time fee for the cellular phone and installation, plus a $19.95-a-month
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per-line charge and a usage fee to run service to Evergreen, Colo., a
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mountatin town near Denver. The cellular phone's versatility also is
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winning big fans in local governments across the country. the Sheriff's Dept.
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in Boulder County, Colo., uses 13 cellular phones for more extended and
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private conversations than it can get from its regular police radios,
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according to Captain charles C. Pringle, head of staff services at the
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department. But criminals are going high-tech, too. For some time now, drug
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dealers in New York City's South Bronx have used radio-paging devices to reach
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customers. Now that they've gone cellular, these people can make calls
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that automatically are switched among the cellular system's 333 frequencies-
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and law-enforcement officials are finding it increasingly hard to
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eavesdrop on perpetrators.
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Most other mobile phone innovations are more mundane. Customers of L.A. Cel
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lular, and independent
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network, get a service called Star Jam that warns of traffic tie-ups on Los
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Angeles freeways. Farther south, Orange County, Calif., plans to set up a
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network of 1,000 cellular call boxes along the freeways to aid motorists.
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The move is expected to save the county about $44 million over what a regular
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land-line system would cost. Orange County's project raises another issue:
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how cellular will affect the $6 billion pay-phone business.
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NOTA:
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