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To: Peter J Hudson who wrote (5036)	5/26/2000 10:17:00 PM
From: Ruffian	Respond to of 34857

TECHNOLOGY Is The U.S. Really Playing Catch-up? These days the conventional wisdom, as espoused by the media, is that the United States seriously lags behind Europe in development of wireless technology. The eye-popping penetration rate figures quoted for some European countries are making news, as are their plans for deployment of third-generation systems that are, apparently, years ahead of the United States. No one can question that wireless has been hugely successful in Europe, but is America really at risk of being an ?also ran? in one of the most vital and rapidly growing industries in the world today, particularly in the critical area of technology leadership? Considering the current and historical differences between American and European wireless industry environments, the answer is not so clear. Much of the relative market success of wireless in Europe undoubtedly stems from the higher prices consumers there typically pay for conventional phone service. In most areas of the United States, local wireline service is billed at a flat rate. In Europe, metered service?even for local calls on residential lines?is the norm. Until a few years ago, American consumers generally viewed wireless service as a high-priced luxury. For many Europeans, wireless prices weren?t much more, on a per call-minute basis, than what they paid for wireline service. In some countries the less-than-stellar quality of landline services and unresponsiveness of state-owned telephone bureaucracies further enhanced the relative advantages of much more modern, and highly competitive, wireless networks. Another explanation for relative wireless market penetration comes from differences in the way networks in Europe and America evolved. In the United States, the FCC allocated wireless licenses in a patchwork of regional markets. Until the recent industry consolidations and emergence of ?nationwide? service plans, frequent travelers?a critically important market segment? were faced with highly confusing and expensive roaming situations that reduced the usefulness of their wireless service. In Europe, licenses usually are issued on a nationwide basis with seamless roaming, a competitive, if not regulatory, requirement. Furthermore, Europe is on average much more densely populated, which has allowed operators there to provide ubiquitous coverage more quickly and at much lower cost. Clearly, several factors have favored rapid market acceptance of wireless in Europe, but does that translate to technological leadership? Given today?s focus on wireless data services, it may appear so. After all, we hear stories of Europeans using their phones to make vending machine purchases while Americans suffer the frustration of never having the right change. In this narrow context of service and feature development, Europe appears to be more advanced, again largely due to the way their networks evolved. For better or worse, all European operators were compelled to deploy a single second-generation standard, GSM. This provided a stable and well-defined platform for development of various data services. The existence of complete open network standards for GSM also has led to highly competitive pricing of infrastructure equipment. The technology ?holy war? in the American wireless industry has created a less stable environment for development of data features, but it also gave rise to what most experts believe to be a far superior air interface technology, CDMA. Indeed, capacity and data rate constraints in GSM certainly are factors driving rapid deployment of 3G in Europe using CDMA technology initially developed?and already widely used?in America. The unique market and regulatory environment in Europe has led to highly visible commercial and technical success for their wireless industry. But taking a broader view that encompasses core air interface technologies, the American industry is very much a leader as well. E-mail: drucker.assoc@worldnet.att.net