Wireless Propaganda
If you thought keeping up with the three or four different
wireless standards was tough, try the industry groups.
International, national, and lobbyist consortiums hover around
wireless companies like vultures over roadkill. Investors
researching the wireless industry need to know who they can
trust, what motivates these organizations and what they stand
for. Here is a look at several of the most talked about institutes,
unions, and associations.
By Todd Lebor (TMF TeeTime)
December 1, 2000
When it comes to telecom associations, who
can you trust?
In last week's Rule Maker column, I
mentioned the "alphabet soup" of names
floating around the wireless industry in
reference to different wireless standards
-- CDMA this, GSM that. This week I look at
the numerous acronyms for industry groups
and trade associations with names like ETSI,
ITU, and UWCC.
There are more groups and consortiums than
I can cover in this column, so I'll highlight
the big guns, the ones you'll read
about in wireless articles. I set out to
answer three questions:
1.What authority does the entity have?
2.What is the objective of the organization?
3.Who does it represent?
ITU -- International Telecommunications Union
Authority -- The ITU determines what technologies are acceptable for
third-generation mobile systems, known as 3G. It has no legal power,
but global wireless companies know that if they do not adhere to ITU
standards they could find themselves without any dance partners. The
ITU developed the key features for 3G known as IMT-2000.
Objective -- To promote global telecommunications through (1)
sharing technical information, (2) standards, and (3) development
assistance (i.e., financial aid, technical education) where needed. Now
that 3G standards are set, the ITU is set to take on fixed mobile
access, IP telephony, and electronic signatures and certifications.
Representation -- Countries and companies. Countries get to vote,
but companies do not. Voting rights are structured so that, for
example, the U.S. doesn't have more pull than Kenya. It's one country,
one vote. The power of the ITU is in the hands of countries, not
companies.
ANSI -- American National Standards Institute
Authority -- ANSI is the gatekeeper of the U.S. voluntary
standardization system. It's not just about technology or telecom.
American National Standards (ANS) dictate all sorts of specifications
from screw thread depths to defibrillator voltage. ANS are not law,
unless they are specifically accepted by a law-making authority.
Objective -- ANSI is about promoting conformity among American
companies and then ensuring that those standards are also accepted
around the world. Perhaps the most important function of ANSI is as
an accreditor. ANSI qualifies or accredits companies so that the rest
of the world knows exactly what to expect from their product. ANSI
accreditation is a global stamp of approval. ANSI also represents the
U.S. in the two international standards-setting organizations: the
International Standards Organization (ISO) and the International
Electrotechnical Commission (IEC).
Representation -- ANSI represents American standards (more
than 14,500 of them) around the world. Membership is open to all --
corporate, academic, government, non-profit, and even foreign. It is
structured more like the Olympic symbol than a pyramid to promote
balance and a lack of dominance among its members.
ETSI -- European Telecommunications Standards Institute
Authority -- ETSI is the European equivalent to ANSI, except it
focuses purely on telecommunications standards. It has no true
authority, yet it helps develop European standards that might or might
not be accepted by the European Commission (EC), the true rule
maker in Europe.
Objective -- ETSI sets out to promote universality among Western and
Eastern European telecommunications.
Representation -- ETSI has open membership with three levels: full,
associate, and observer. Voting privileges are reserved for full
members, and only entities from one of the 40-plus countries
represented by the European Conference of Postal and
Telecommunications Administrations (CEPT) can be full members.
Unlike the ITU, votes are weighted by contribution. The bigger, the
better. Nokia (NYSE: NOK) has more votes than some unknown
carrier.
CTIA -- Cellular Telecommunications Industry Association
Authority -- None.
Objective -- The CTIA lobbies for telecom companies. It also puts on
conferences and provides industry publications. The CTIA is a
non-profit organization, but it owns 100% of a for-profit company
called CIBERNET that is the leading provider of inter-carrier roaming
billing and financial settlement services for the wireless industry. In
other words, it is a clearing house for wireless billing. Both parties
maintain there is no conflict of interest.
Representation -- The CTIA has three memberships: general, supplier,
and associate. General members are entities that hold Federal
Communication Commission (FCC) licenses or construction permits.
Supplier members are service providers and equipment manufacturers.
Associate membership is set aside for lawyers, consultants, and the
like for an annual fee of $5,000. General and supplier members are
charged dues based on their North American wireless revenues.
Therefore, one can only assume that bigger is better, although the
CTIA appears to remain bipartisan between the two dominant
standards in the U.S.
It seems that each wireless standard has its own propaganda factory.
TDMA and EDGE (Enhanced Data Rates for Global Evolution) are
represented by the Universal Wireless Communications Consortium
(UWCC). CDMA has the CDG or CDMA Development Group. It focuses
on cdmaOne (2G), is progressing toward cdma2000 (3G), and is not
real big on W-CDMA. Then, of course, you have 3GPP2 and 3GPP. The
former promotes cdma2000 and the latter touts W-CDMA.
What is to be learned from all these groups? Make sure you
understand who is responsible for those growth rates you base your
decision on. The ITU, ETSI, and ANSI are standards-setting
organizations. The ITU and ANSI, for example, can't be influenced by
money or the size of a contributor. Each member gets one vote.
The CTIA, UWCC, and the CDG are lobbyists with an agenda to
push. Investors should understand that Qualcomm (Nasdaq: QCOM)
is probably forking over big dollars to fund the CDG, and AT&T (NYSE:
T) is probably doing the same for the UWCC. Take information from
these groups with a grain of salt. Get both sides of the story. As I
highlighted in a recent Rule Maker article, don't limit your exposure to
one source.
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