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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (207)	7/4/2000 3:22:17 PM
From: William Hunt	Respond to of 197445

EC to question legality of 3G auctions By Keith Nuthall, Total Telecom 03 July 2000 An open letter from Dutch broadband multimedia company Versatel is to be used by the European Commission in a probe into whether third generation spectrum auctions break European Union law. Brussels is examining whether these auctions meet mandatory principles laid down in EU directive 97/13 - namely, that they be objective, non-discriminatory, transparent, detailed and proportionate. The letter, by Gary Mesch, chief executive of Versatel Telecom International NV, asks the EC to halt the auctions. It says: "Versatel wishes to stop developments whereby European governments create huge barriers for both new entrants and incumbents....The UK auction of UMTS spectrum demonstrated that mobile operators will go to extremes to protect their foothold in the mobile market." His company faces being excluded from the 3G market in the Netherlands; the government is auctioning five licences and there are five incumbent mobile operators. Versatel offers broadband network services and so would be well placed to enter the mobile market via 3G technology. Mesch's letter said his company would "pursue all options, including the use of legal and political channels" to gain a fair chance of being able to do so. Per Haugaard, spokesman for EU information society commissioner Erkki Liikanen, said the EC would "look very carefully" at the letter as part of a "monitoring" exercise to check whether the auctions break EU law. He said: "For the time being - although Mr Liikanen has expressed concern about the economic consequences of the high prices in the auctions - the use of auction procedures in itself would not appear to be contrary to the principles laid down in legislation. We're following the licencing processes with great attention to ensure that these are respected." Regarding the Dutch case, he said it was "too early to come out with a reaction on these specific facts." Mesch's open letter reads as follows: Open Letter To EU Commissioners Liikanen And Monti (29 June, 2000) Dear Mr Liikanen, dear Mr Monti, Versatel Telecom International N.V. ("Versatel"), a facilities based broadband multimedia company active in the Benelux and Germany, has already addressed the European Commission on 19 June 2000 with a complaint requesting your immediate action to save Europe's advanced position in the mobile multimedia industry. Versatel wishes to stop developments whereby European governments create huge barriers for both new entrants and incumbents by organising auctions to allocate frequencies for third generation mobile communications. The UK auction of UMTS spectrum demonstrated that mobile operators will go to extremes to protect their foothold in the mobile market. Many European countries will follow with auctions or variations of auctions, which will weaken the position of the advanced European mobile industry as huge debts will be created to pay-off license fees. As a direct effect, the auctions lead to unfair European market disturbances, since incumbents of countries where license fees are lower, or absent, will have a huge advantage over companies forced to bid in order to keep or gain a market position. Versatel is not alone in its objections. We refer to the complaint of Bouygues Telecom, which also turned to the Commission with a formal complaint to address the situation on the French, Dutch, German and Belgium markets, where very high license fees are expected. A possibly more extreme example than the UK-and so far unique in Europe- is the auction planned to start next week in the Netherlands where 5 licenses are offered in a market containing 5 incumbent operators (see annex). This arrangement makes not even the smallest gesture to newcomers. Taken together with the uncertain implications of the recent WRC conference, which provided additional frequency spectrum, and the absence of a clear government plan on site and infrastructure sharing for some 20.000 sites which have to be constructed, it appears that the planned auction in the Netherlands is intended only to maximise revenues. Versatel is determined to gain a substantial foothold in the 3G mobile market, so that we can serve our customers fully and enable them to benefit from 3G mobile internet services and devices. Versatel will pursue all options, including the use of legal and political channels, if necessary. We would be willing to buy our own access to spectrum, at reasonable costs, and are prepared fully to share such spectrum, since we believe our customers will benefit from fair competition. Versatel can not, however, accept a closed shop arrangement for a limited group of incumbent operators, nor can we accept prices determined by rules which are discriminatory, anti-competitive or which lack transparency. We trust and hope that the EU Commissioners will be protective of this major European industrial and economic interest. A clear message to the governments involved is required to maintain key policy objectives for the 21st century Information Society. Yours sincerely, Versatel Telecom International N.V. R. Gary Mesch, CEO

To: slacker711 who wrote (207)	7/4/2000 3:43:07 PM
From: John Biddle	Read Replies (1) \| Respond to of 197445

Slacker & Skip Paul, thanks for the info. I wasn't thinking about all the imported components of the cell phones manufactured in Korea and now that you have pointed it out I see more clearly how the ban helps balance of payments concerns. Another reason that I read was that the constant upgrading of cell-phones was a "waste of resources". I read a couple of editorials that applauded the ban for this reason. I had not read this anywhere. I assume these editorials from Far East papers rather than US? Surprised to see such sentiment is apparently widespread.