US warning on mobile phone standards

Date: 07/01/1999

By Peter Chapman

US government big guns have fired a warning shot across Telecoms Commiss-ioner Martin Bangemann's bows over alleged Union plans to corner the next generation of wireless phone technology.

The dispute is souring EU-US trade relations still further as the war of words over the Union's banana regime continues.

In a letter to the Commissioner signed by US Secretary of State Madeleine Albright, Trade Representative Charlene Barshefsky, Commerce Secretary Bill Daley and Federal Communications Commission chairman William Kennard, Washington claims that EU member states and the European Commission are set to favour a single standard, known as Universal Mobile Telecoms System (UMTS), already approved by the European Telecommunications Standards Institute (ETSI) in Nice.

They warn that this could result in American firms offering equipment which does not meet this standard being shut out of the next lucrative development in the multi-billion-euro mobile telecoms market in breach of World Trade Organisation rules. “The United States is troubled by the unfortunate precedents the European Community and its member states could set by adopting a single mandatory standard for wireless equipment and services,” states the letter.

It follows complaints by US mobile firm Qualcomm Inc which claims it has been shut out of Europe's standards-setting process even though it is a leader in the core technology which European firms have chosen for their UMTS norm.

The letter warns the EU against “taking other steps which would effectively promote a particular standard or standards” ahead of a key decision-making process at the world telecoms policy body - the Geneva-based International Telecommunications Union (ITU).

The ITU is expected to reach a final decision on the characteristics of the third-generation ('3G' ) standards which it will accept by the end of the year. It is currently looking at ten different systems, including the European UMTS norm, which are likely to be whittled down to three or less approved technologies.

But Washington fears EU governments will only offer licences to the ETSI-approved UMTS standard services when they begin the process of allocating them later this year, before the ITU has reached a decision. “We understand that several EU member states will begin the process of licensing providers for 3G services as early as 1999,” states the letter, adding: “EC and member state regulations must ensure non-discriminatory access to European markets and not impose unnecessary barriers to trade.”

However, the scarcity of radio spectrum in some member states such as Italy could mean non-UMTS services are effectively left on the shelf once the first licences are awarded - even if they are not outlawed.

The US administration claims the American system is fairer, because service providers can choose the technology which best meets their needs regardless of whether it matches an approved standard.

But a spokesman for Bangemann fiercely denied that the EU was effectively freezing standards other than UMTS out of the market.

He insisted that the Union had not mandated any one technology, adding that ETSI's members - and not EU governments or the Commission - decided the UMTS standard. “We have said we want standards to be inter-operable. That is our only political goal and we stick to it,” he added.