3G Opinion>
From the December 21, 1998 issue of Wireless Week
Guest Opinion: 3G Standards Policy:
Government Shouldn't Intervene In Debate
By Michael Topper
Should the United States government intervene in the current debate over third-generation wireless standards? Based on our review of the evidence, the answer is
no! Such intervention would do more harm than good.
Market competition among multiple 3G standards likely will create many important benefits for U.S. consumers and society, including greater service and product
variety, reduced incremental buildout costs and more innovation. Moreover, competition among multiple standards allows the market, rather than government
regulators, to resolve uncertainty regarding the best technology for meeting future consumer needs.
Are there corresponding benefits to a single national standard? One argument for a single standard is easier nationwide roaming. However, recent technological
advances, such as multi-mode, multi-frequency communication devices promote multi-standard roaming. Moreover, second-generation wireless providers (or
alliances) with near-nationwide footprints increasingly are offering easy roaming within each 2G standard. 3G service providers can be expected to respond similarly
to consumer demand for roaming.
A second claim is that a single standard facilitates economies of scale in production. Here again, the evidence suggests that any economies of scale in production are
realized within each 2G standard and that a similar situation would prevail in 3G.
A third claim is that the United States will lose manufacturing jobs and leadership if the U.S. government fails to mandate a standard. However, manufacturing jobs
and leadership depend on a host of factors, not simply on a standard's country of origin. Since wireless manufacturing jobs are internationally mobile, a
U.S.-mandated 3G standard is unlikely to lead to lasting benefits for U.S. manufacturers or manufacturing workers. Moreover, the vast majority of American
manufacturers already serve multiple 2G standards. In addition, the primary consideration of a standards policy should be the interests of consumers, a goal that is
undermined by giving special consideration to any particular standard.
Rather than follow calls to retaliate against Europe's anticipated move to adopt a single standard by adopting a single U.S.-backed standard or by forcing
convergence of standards, the U.S. government should redouble efforts to persuade the European Union to embrace multiple standards. U.S. consumers and society
are best served by allowing multiple standards to compete. The U.S. government should not forsake its enlightened policy of "letting the market decide."
Dr. Michael Topper specializes in antitrust and intellectual property issues at Cornerstone Research and is a lecturer in Stanford University's department
of economics. Joseph Farrell, professor of economics at the University of California, Berkeley, and former chief economist at the FCC, also contributed
to this editorial. Farrell and Topper recently authored a white paper sponsored by the North American GSM Alliance.
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