ETSI 3G Letter to US House of Reps:
ETSI sets the record straight on Third Generation Technology Issues
In the recent hearings of the United States House Committee on Ways and Means, relating to Trade Relations with Europe and the New Transatlantic Economic Partnership, ETSI was repeatedly mentioned but was not invited to testify. In order to avoid further misconceptions, the ETSI Director General is sending an open letter (copy attached) to the Chair of the Subcommittee on Ways and Means. The letter sets the record straight on a number of issues concerning ETSI's objectives and intentions, status and membership, as well as addressing a number of incorrect claims.
This open letter follows one previously sent to Chairwoman Constance Morella of the Subcommittee on Technology of the US House of Representatives. ETSI continues to affirm its openness to all market players in the telecommunications industry, and its working methods adhere to the Code of Good Practice established under the World Trade Organization Agreement on Technical Barriers to Trade.
ETSI supports the role of the International Telecommunication Union (ITU) for global standards. It is participating actively in the work leading towards the ITU's initiative on the IMT-2000 family concept, and collaborates with other standards bodies from around the world (ie ACIF (Australia), TSACC (Canada), ARIB (Japan), TTC (Japan), TTA (Korea), T1 (US), TIA (US), and ITU (International) in the GSC/RAST.
Open Letter to Chairman Philip M. Crane
The Honourable Philip M. Crane
Subcommittee on Trade
Committee on Ways & Means
US House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Dear Chairman Crane,
In the July 28 hearings of the Subcommittee on Trade of the House Committee on Ways and Means, relating to the Trade Relations with Europe and the New Transatlantic Economic Partnership, the name of the European Telecommunications Standards Institute (ETSI) was repeatedly mentioned but ETSI was not invited to testify. It is my duty to set the record straight on a number of items that are leading to confusion in the marketplace and that are misrepresentations of ETSI, its activities and its intentions.
Incorrect claim number 1: "ETSI's adoption of a standard that lacks technical or economic advantages over competing standards and, unlike the alternative, is incompatible with most existing standards, is an action that creates an unnecessary barrier to trade, in violation of the TBT"
On January 21, 1996, ETSI notified its acceptance of the World Trade Organization Agreement on Technical Barriers to Trade Code of Good Practice. This means that ETSI endorses and applies the principles of
Non-discrimination
Transparency
Harmonization
Avoidance of unnecessary obstacles to trade
ETSI is an autonomous, independent, non-profit organization under French law. As such it has been officially recognized by the European Union as one of the three European Standards Bodies.
The technical orientations pursued in ETSI are predominantly decided by market representatives. A small number of ETSI outputs are used for regulation of the European internal market to control scarce resources. These tools are called Technical Bases for Regulation (TBRs) and are elaborated in full respect with the World Trade Organization's General Agreement on Trade and Services.
ETSI supports the role of the ITU for global standards. Therefore it participates actively in the work leading towards the ITU's initiative on the IMT-2000 family concept and collaborates with other standards bodies from around the world (i.e. ACIF (Australia), TSACC (Canada), ARIB (Japan), TTC (Japan), TTA (Korea), T1 (US), TIA (US), and ITU (International)) in the GSC/RAST. UMTS is the ETSI contribution to this work and is a 3rd generation evolution from the existing set of GSM standards. (However, it should be noted that in order to provide as much flexibility as possible in the definition of the new air interface, no backwards compatibility with GSM radio has been required in UTRA.)
It may be noted that the Committee on Technical Barriers to Trade, in its first triennial review of the Agreement meetings (held throughout 1997) agreed to exchange views on the concept of "unnecessary barriers to trade" as given in the paragraph E of the Code, for it is subject to multiple interpretations and distortions (see § 5 regarding IPRs).
Incorrect claim number 2: "The EU for years has closed its markets to all but one wireless technology, one that happens to be manufactured by large European concerns…(the EU) embarked on a policy of denying GSM's competitors entry into the European market".
Europe is made up of more than 40 countries and each country has a heritage of a large number of different rules and regulations. The EU has had as one of its primary aims the creation of a single market where these rules and regulations are harmonized.
In the case of technical systems like communications, standards are the main means of achieving this harmonization. This is recognized on both sides of the Atlantic. Just as the US government recognizes the importance for itself, to encourage long-term growth for enterprises and promote efficiency and economic competition through harmonization of standards (cf OMB A-119), so does Europe.
It should be noted that major North American manufacturers (e.g. Lucent, Nortel, Motorola) are members of ETSI via their European affiliates, and contribute actively to the development of GSM standards. In a similar way, major Japanese manufacturers participate in the development of GSM as do GSM network operators from all over the world.
For GSM standards, the major part of the registered essential Intellectual Property Rights emanate from US companies. This information is openly available on the ETSI web-site and contained in an ETSI Special Report (SR 000314).
Incorrect claim number 3: "Once Europe had its common cellular standard, the game changed from devising legitimate technical standards to create an exclusionary industrial policy that would enable European manufacturers to market GSM around the world from their protected home market."
GSM was first developed within the CEPT (Conférence Européenne des Postes et Télécommunications) in the early 80's to allow pan-European roaming and services for public networks in an increasingly integrated European Community.
One of the main drivers for the development of GSM was the forecasted shortage of capacity in existing analogue systems. The principle aim was to develop an advanced, future proof system, which would allow high volume production at low cost and with international roaming possibilities.
CDMA technology was thoroughly studied and tested but was not selected since it had inferior performance compared with the GSM TDMA technology.
Being an indisputable commercial success (over 100 million users as of today in 128 countries), the market dynamics, and these dynamics only, can explain why GSM has spread so widely around the world. This is a very good example of market determination, which was made possible by the choice of a unique standard that automatically created a strong home market. Moreover, GSM is a good example where standardization led to a more competitive market where consumers benefit from the liberty of choice and where liberalization was achieved.
From the very beginning of the GSM standardization within ETSI, interested parties were invited to participate in the standardization process leading to international contributions and recognition of technologies available world-wide. ETSI pursues this philosophy allowing for continuous improvement of the GSM standards.
Incorrect claim number 4: "Anti-competitive aspects of the ETSI process"
ETSI is a voluntary standards body which works by consensus, and which plans, develops, establishes standards using agreed-upon procedures, which meet the criteria of:
Openness
Balance of interest
Due process
Consensus
An appeals process
ETSI's membership is drawn from 47 countries coming from all five continents, and includes manufacturers (53%), operators (16%), private service providers (15%), Administrations (9%), and users (5%). In total, over 500 organizations participate in ETSI's work (see list of ETSI members on etsi.org.
ETSI is open to influence from all of its members. Technical work is driven by work items. Each work item must be supported by at least 4 members. The standardization programme is completely open and can be consulted on the ETSI Web site. Members contribute to the elaboration of standards by providing inputs to the work of technical bodies. No member is favoured or excluded from taking part in this work.
Since the ETSI General Assembly held in April 1997, Qualcomm Israel LTD is ETSI associate member. Since then, Qualcomm has the right to submit its technology according to article 1.6.2 through the work item procedure.
During the ETSI General Assembly held in November 1997, Qualcomm Europe SARL was accepted as a full member. During the ETSI General Assembly held on March 26-27 1998, Qualcomm Inc. applied to become an associate member. This new membership was accepted by ETSI but Qualcomm Inc withdrew on April 15, 1998.
Contributions to the ordinary account by members is addressed in Annex 2 of ETSI Directives. Article 5 of Annex 2 of ETSI Rules of Procedure provides that "the class of contribution shall be determined according to the latest or available figure of its telecommunication related turnover or its equivalent". Because ETSI is an open organization and accepts membership from all the participants in the telecommunications field it relies on organizations' declarations of their telecommunications related turnover, indifferent on whether this declaration is made on a European or global basis.
It is important to note that it is each member that must self-declare its telecommunications related turnover.
Although work is driven in principle by consensus, votes can and do take place within a fair and democratic process. When these votes pertain to the development of ETSI standards and Technical Specifications all members have the same right to vote according to the same rules. No difference is made whether a member organization comes from a European base or from another region of the world. Voting weights are attributed in proportion to the members' declaration of its own telecommunications turnover. Furthermore, it is still possible to apply the "one member-one vote" mechanism if all parties involved agree to do so.
The objective to select a single standard and the process to define the radio technology was agreed unanimously in the SMG#21 Plenary in February 1997. The basic parameters of W-CDMA were agreed unanimously in the SMG#24bis Plenary in January 1998 which was attended by 316 delegates (see list of participants in Annex 2). The solution, called UTRA (UMTS Terrestrial Radio Access), draws on both W-CDMA and TD-CDMA technologies. The more detailed definition for submission to the ITU was agreed unanimously in the SMG#26 Plenary in June 1998. All these decisions were supported by Qualcomm Europe SARL, which as mentioned previously is an ETSI member. All involved major US manufacturers were represented in these Plenary meetings.
GSM has brought about a pan-European service with roaming extended to different countries and this has led not only to an end of the fragmented market and incompatible systems but also to an increased level of competition amongst the network operators and manufacturers of terminals (including outwards suppliers) as well as cheaper communications. It is desirable that competitive advanced technology further enhances the level of service and degree of interoperability at the world level. The competition in third generation standards will be world-wide. ETSI welcomes this competition.
Incorrect claim number 5: "Faced with a protectionist European industrial policy and ETSI's non-objective standard setting process, Qualcomm has been forced to fall back on its IPRs to protect its current customers and its position in the next generation of wireless technology"
ETSI acknowledges that Qualcomm holds CDMA IPRs. In this context the following observation is particularly relevant:
"With respect to proprietary status, AMPS, NA-TDMA, GSM and IS-41 are essentially in the public domain. In the case of CDMA, Qualcomm holds strong intellectual property rights, which it asserts through licensing agreements with an array of equipment vendors…
…(the growing number of telecommunications standards) covered in part by IPRs has played a major role in the transformation of standards organizations from forums of experts seeking consensus on technical issues into battlegrounds for the assertion of competing commercial interests".
("Standards for personal communications in Europe and the United States", David J. Goodman, Harvard University, April 1998)
ETSI Rules of Procedure (Annex 6, the ETSI Intellectual Property Rights policy) establish that "when an essential IPR relating to a particular standard is brought to the attention of ETSI, the Director General of ETSI shall immediately request the owner to give within three months an undertaking in writing that it is prepared to grant irrevocable licenses on fair, reasonable and non-discriminatory terms and conditions(…). This is the tribute ETSI members pay to non-discrimination, transparency, harmonization and avoidance of unnecessary obstacles to trade.
On August 6, Qualcomm notified to ETSI that "(Qualcomm) is not prepared to grant licenses for the proposed W-CDMA standard in accordance with the terms of Clause 6.1 of the ETSI interim IPR policy". The development of the third generation standards within ETSI will thus progress according to this decision and ETSI's Rules of Procedure.
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About Getting Authoritative Information about ETSI and its Working Methods:
We invite you to look at our Statutes, Rules of Procedure and much more on etsi.org
Yours sincerely,
Karl Heinz Rosenbrock
ETSI Director General
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For further information about this news release, contact:
Tom Eriksen, at ETSI, tel: +33 (0)4 92 94 43 12, E-Mail: tom.eriksen@etsi.fr or
Beverley Wing, Kingston Public Relations, UK, tel: +44 (0)1482 352255,fax: +44 (0)1482 352588, E-mail: BeverleyWing@compuserve.com
18 August 1998
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