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The Download, Shannon Henry

Wireless Abounds; The Focus Now Is on Improving It

By Shannon Henry
Thursday, December 16, 2004; Page E01

Nextel was the big story in telecommunications yesterday, thanks to the Reston company's mega-merger with Sprint, but the future of wireless may be percolating in dozens of Washington area start-ups.

"It is no longer the network that is the key, it is the edge that is the key," said Tom Wheeler, a venture capitalist with Core Capital Partners in Washington and the former president and chief executive of the Cellular Telecommunications & Internet Association.

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In other words, Wheeler said, it will be less about nuts-and-bolts cellular systems and more about imaginative marketing and innovative services.

Washington's new generation of wireless companies competing to develop such offerings includes Ztango of Reston, which provides wireless messaging and content such as musical ring tones, and Washington-based wireless services and devices seller InPhonic, which recently went public. Then there are wireless security firms Koolspan in North Bethesda and Trust Digital in McLean. Cibernet in Bethesda sells billing services to the wireless industry. And Defywire, based in Herndon, creates wireless-services software for large corporations.

Some of the area's wireless experts and entrepreneurs gathered recently at the Ritz-Carlton in Tysons Corner for a roundtable discussion titled "What's Next in Wireless?"

The panelists agreed that one of the most interesting and potentially lucrative wireless niches will be "micropayments," finding ways to use a cell phone to pay small amounts, such as $1 or $2, for a new ring tone or a game. "That's a gigantic opportunity," said Mark Ein, founder of District-based venture capital firm Venturehouse Group.

Vern Poyner, Ztango's chief executive, predicted someone will come up with a single device that deftly combines phone, portable music player and mobile Internet access that will prove a hit with young consumers. "Your phone is going to be your iPod," he said.

Some new wireless services involve tracking people. Defywire of Herndon recently launched a pilot project along with Reston-based WebMethods to provide wireless access to student medical records in Fairfax County Public Schools. The service, which is partially funded by the Department of Commerce, allows bus drivers, nurses, principals and other school officials to call up the records through personal digital assistants.

So if a child on a bus is stung by a bee, the bus driver can punch in the name and find out whether the student is likely to have an allergic reaction.

The system also will be able to track where buses are in real time. "You as a parent can track your kid," said Defywire chief executive Jill Stelfox. She acknowledged such tracking systems inevitably bump against concerns about privacy and security. "Over time we will adjust to the right and wrong of the privacy issues," she said.

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