WASHINGTON-In an embarrassing political blunder that lends insight into the tricky third-
generation wireless debate, Sen. Chuck Robb (D-Va.) last week joined two fellow Finance Committee members in
urging the Clinton administration to use renewed Super 301 trade authority to make Europe open its market to
American-engineered digital wireless technology.
The problem is, Robb’s state of Virginia is home to L.M.
Ericsson’s largest mobile phone and base station plant. The manufacturing facility in Lynchburg, Va., employs 3,200
people.
It apparently did not occur to Robb that starting a trade war over next-generation digital wireless technology
would not be in the best interests of a major constituent in his state, however.
The two-page letter, sent last Tuesday
to U.S. Trade Representative Charlene Barshefsky and signed by Robb, Sen. Kent Conrad (D-N.D.) and Sen. Max
Baucus (D-Mont.), was meant to further the interests of U.S.-developed Code Division Multiple Access technology by
encouraging the United States to exert pressure on Europe to remove trade barriers keeping U.S.-developed CDMA
technology out of the mobile phone market that Ericsson and Nokia dominate.
“The EU’s (European Union)
use of technical barriers to trade is profoundly unfair to American workers and consumers,” the lawmakers
stated.
CDMA technology is locked out of the European Union, while European wireless technologies are used in
the United States.
A Senate Finance Committee hearing that was expected to address wireless trade and other issues
was postponed last week because of impeachment proceedings.
Ericsson, Finland’s Nokia Corp. and U.S mobile
telephone operators that use European-based Global System for Mobile communications technology are locked in a
fierce battle with Qualcomm Inc., Lucent Technologies Inc. and U.S. CDMA carriers for rights to the multibillion
dollar 3G market.
Motorola Inc., a top mobile communications supplier in the United States and around the world,
is trying to remain neutral.
The Clinton administration, for its part, continues to push for multiple 3G standards and
harmonization of standards where possible. But while the White House is scoring points with Qualcomm and its allies
for pressing the 3G issue with the EU, it is ruffling the feathers of other American firms.
AT&T Corp., the top U.S.
mobile phone carrier, BellSouth Corp. and SBC Communications Inc. feel the administration’s preoccupation with
CDMA could end up marginalizing 3G Time Division Multiple Access technology, which they plan to deploy here and
abroad.
“Perhaps the full information was not available to Sen. Robb,” said John Giere, Ericsson’s vice
president of marketing and public affairs here.
Robb could not be reached for comment.
The International
Telecommunication Union, which is overseeing 3G standardization, said it intends to meet the March 31 deadline when
it likely will approve a family of 3G standards.
That is a tall order, given the nasty patent dispute between
Qualcomm and Ericsson.
The standardization process, subject of negotiations earlier this month in Kuala Lumpur,
will culminate in a critical ITU meeting, March 8-19, in Fortaleza, Brazil. Also in March, U.S. and European Union
officials will meet for bilateral talks.
On Wednesday, 3G will be a hot topic at a TransAtlantic Business Dialogue
meeting in the nation’s capital.
With super 301 trade authority alive again, USTR is expected to move swiftly to
provide Congress with a report on global trade barriers March 31-the same day ITU is to announce 3G standards. At
the end of April, the list will be narrowed down, and the United States will begin trade negotiations to resolve
disputes.
If talks are not successful, the United States most likely would launch investigations-taking six to 18
months-which ultimately could lead to trade sanctions.
“It is not clear there is an unfair market barrier that
deserves 301 action,” said William Plummer, Nokia’s vice president of government and industry affairs
here.
That Nokia, Ericsson, Lucent, Motorola and others are multinational corporations complicates trade aspects of
the 3G debate, as Robb discovered.
Like Ericsson, Nokia has a respectable presence in the United States. The firm
has more than 5,000 employees on its payroll in the states.
One of Nokia’s largest infrastructure and mobile phone
plants is located in the Dallas-Fort Worth area. In Boston, Dallas-Fort Worth and San Diego, Nokia operates research
and development facilities. It also has offices in Silicon Valley, where it is developing Internet technology that wireless
carriers plan to capitalize on.
All told, according to Plummer, Nokia’s U.S. subsidiaries export close to $1 billion
annually.
