WASHINGTON-The Clinton administration, invoking powerful references to the World Trade
Organization, competition and convergence, last week said the European Commission’s response to U.S. concerns
about potential trade barriers to third-generation mobile phone standards fell short, and urged Europe not to implement
3G before the International Telecommunication Union’s standards-setting process is completed.
“I welcome
Commissioner Bangemann’s assurance that European standardization will proceed in concert with the ITU process,
recognizing that some key European and American industry participants in that process are unfortunately at
loggerheads regarding intellectual property rights,” said William Daley, secretary of the Commerce
Department.
“We would therefore expect that EC member states will ensure that their 3G licensing process
accommodate, on an equally timely basis, any newly converged standard(s) and all others agreed by industry and
recommended by the ITU,” Daley added.
Qualcomm Inc., a leading San Diego-based pioneer of Code
Division Multiple Access technology, has been lobbying U.S. policy makers for access to the European market
generally and convergence of 3G CDMA proposals specifically.
Qualcomm in recent months has won bipartisan
support from key members of the GOP-led Congress and the Democratic White House.
In December, Daley,
Secretary of State Madeleine Albright, U.S. Trade Representative Charlene Barshefsky and Federal Communications
Commission Chairman William Kennard wrote European telecommunications Commissioner Martin Bangemann to
express concerns about the prospect of Europe implementing a directive requiring the 15 member states to deploy a 3G
wireless technology-Wideband CDMA-favored by Sweden’s L.M. Ericsson and Finland’s Nokia Corp.
In a letter to
President Clinton the same month, Senate Majority Leader Trent Lott (R-Miss.) and Assistant Majority Leader Don
Nickles (R-Okla.) warned that an evolving European Union industrial policy discriminates against U.S. wireless
firms.
Today, Europe is closed to CDMA technology, while the U.S. market is a mixture of European-developed
Global System for Mobile communications, Time Division Multiple Access and CDMA technologies.
W-CDMA is
the only 3G standard approved by the European Telecommunications Standards Institute.
W-CDMA, lacking
backward compatibility to second-generation CDMA mobile phone systems here and abroad, requires a large block of
spectrum and fresh investment in infrastructure. The EU has set aside frequencies for that purpose.
Europe believes
a single mandated standard best ensures pan-European roaming. That policy governed the deployment of digital
cellular service in Western Europe.
Cdma2000, the standard Qualcomm claims essential intellectual property rights
to, has a slower chip rate but is backward compatible to existing CDMA systems. The United States is contemplating
reserving some spectrum (2110-2150 MHz) for 3G.
“If the costs of upgrading existing second-generation
infrastructure can be successfully minimized in the United States, Japan and the Americas, and, if Europe and others
license multiple technologies and competitors, we can achieve by 2010 a worldwide mobile telecommunications
subscribership that will exceed traditional fixed wireline subscribership,” said Kennard.
Kennard and other
administrations officials, perhaps overstating the case, boast that wide-area roaming is possible under the U.S. system
of market-driven wireless standards. While roaming has advanced significantly in the United States, it remains far from
ideal.
Bangemann, in a Jan. 15 response to the United States that blended conciliation with combativeness, said the
EC will not interfere with the ITU’s March 31 deadline for deciding key characteristics of proposed 3G standards or
with the Dec. 31 deadline for completing 3G standards.
At the same time, Bangemann said U.S. spectrum policies
constrain access by foreign firms to the American wireless market.
The U.S. response to Bangemann mixed pleasant
plaudits with veiled threats.
Barshefsky, welcoming Bangemann’s commitment to let the ITU process run its course
without political interference, reminded Europe of its obligation to competition under the WTO telecom free trade
accord.
“EC member states should now license and assign radio spectrum to the maximum number of service
providers without regard to technology, based on the standards that emerge from the ITU negotiations,” she
stated.
3G is one of several trade disputes brewing between the United States and the European Union in what could
be a foreshadowing of things to come as Europe evolves into a unified economic force on the world scene.
