WASHINGTON-A critical European Parliament vote last week, which could effectively mandate a third-generation mobile phone standard dominated by Sweden’s L.M. Ericsson and Finland’s Nokia Corp. and lock out American technology, will ratchet up the stakes in upcoming negotiations here among U.S., European Union and the European Telecommunications Standards Institute officials on 3G.
The European Union directive, set to become law before year’s end, provoked loud protests from the Federal Communications Commission and U.S. company Qualcomm Inc., which stands to lose the most from the debate on a standards issue that some policy makers believe the EU has finessed into a technical trade barrier.
“The commission continues to be very concerned about the EU-proposed directive regarding the implementation of third-generation wireless systems in Europe,” said Peter Pappas, assistant chief of the FCC’s International Bureau.
Pappas added: “There are legitimate concerns within U.S. industry and U.S. government that this action may have the effect of precluding standards other than W-CDMA (wideband Code Division Multiple Access) from the European market).”
Yet U.S. wireless carriers and manufacturers are anything but united on 3G. Major mobile phone operators, like AT&T Wireless Services Inc., BellSouth Corp. and SBC Communications Inc., have mounted an aggressive counter-lobbying effort in recent weeks to persuade U.S. policy makers not to embrace Qualcomm’s call for 3G CDMA convergence.
Staff members of several Senate Finance Committee members were briefed on 3G last Wednesday by Don Abelson, a U.S. trade representative negotiator, and Dorothy Robyn, a member of the White House’s National Economic Council.
The two U.S. officials, according to sources, made a strong case against European industrial policy on 3G just as they did in Charlotte, N.C., several weeks ago at the TransAtlantic Business Dialogue forum.
While some members of Congress are warming to CDMA convergence, the administration appears to be emphasizing the trade issue as a way to leverage EU movement on its 3G standards policy.
“The EU’s actions prejudge the outcome of the ITU (International Telecommunication Union) process and are clearly inconsistent with commitments made at the TABD,” said Jonas Neihardt, Qualcomm’s director of government affairs.
The ITU is evaluating 15 3G standards from around the world, many based on CDMA technology. ITU is expected to approve a family of 3G standards next March.
ETSI, European mobile phone manufacturers and U.S. carriers that deploy European wireless technology, having watched Congress and the administration’s interest in 3G snowball in recent months, have hired a slew of top-notch lobbyists to contain Qualcomm.
Some observers speculated last week’s announcement that Bell Atlantic Mobile will team with Lucent Technologies Inc. to deploy cdma2000-the 3G technology Qualcomm embraces-in 1999 may have startled European officials.
Indeed, ETSI sent out conciliatory signals from Dresden, Germany, last week on 3G CDMA convergence.
Representatives from the EU and ETSI-which has approved only W-CDMA technology for 3G-are expected to meet with Clinton administration officials soon for more talks on an increasingly contentious issue that if not defused in coming months could segue into a TransAtlantic trade war. That would require more political capital than the administration has demonstrated it is willing to expend on 3G to date. Up to now, it’s just been a lot of sabre rattling.
Qualcomm’s army of lobbyists are pressing the administration and Congress to force the EU to open its market to CDMA. At the same time, Qualcomm wants the ITU to harmonize U.S. and European CDMA standards for 3G. Qualcomm has threatened to withhold its intellectual property rights for any CDMA standard and sue in patent court if 3G differences are not resolved.
U.S. CDMA, which Qualcomm developed, and Europe’s W-CDMA-a successor to Global System for Mobile communications technology that is exclusive to Europe and popular in other parts of the world-are not interoperable. Qualcomm believes Europe intentionally engineered W-CDMA technology not to be backward compatible with U.S. CDMA technology.
Qualcomm critics contend the San Diego firm simply wants the U.S. government to force Europe to endorse its business plan, something they say that would force an inferior Internet-friendly mobile phone technology on consumers in the next century.
