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Updated Monday, 23 November 1998. Next update Monday, 14 December 1998.
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CWI News Listing for Issue 215, Monday, 23 November 1998
Perspective
There's more to 3G than a choice of technology
By Roger Tuckett
Despite recent attention, the broadband wireless market is still in a pioneer phase. Much room remains for both technological and commercial developments.
The focus could be on mobile, semi-mobile or fixed, offering narrowband or broadband. The target market could be consumers, the business market, or the
world's "mobile elite." The degree of integration and substitution of mobile systems with fixed systems is particularly unclear. The market size is uncertain and
killer applications have yet to emerge. Businesses and investors will take risks, but they will not all be winners.
Now a new round of problems has arisen where competing technologies vie for global dominance. Various (mainly U.S.) interests have challenged the
European approach of a single set of UMTS standards developed by industry within the European Telecommunications Standards Institute (ETSI).
Considerable positioning takes place with escalating political involvement. Intellectual property disputes begin to take center stage. The perception is that
massive market opportunities exist and serious trade policy issues will become involved.
Even without the tensions over choice of standards, public policy-makers in Europe face a challenge. Spectrum remains a scarce resource. General allocation
of frequency - for example, as between satellite or land-based systems - will invariably favor some systems developers over others. Individual assignment
allocation of operating frequencies, and the associated policies, will favor some types of operators over others.
Decisions on what frequencies are allocated, the price paid into public funds for such use of spectrum, and the timetable and criteria for granting a limited
number of licenses will all impact the market. Governments must tread a fine line between defending their national interests, promoting efficiency of spectrum
use, enabling market forces to function most effectively, and pursuing other broader "Information Society" objectives.
The European institutions have thrown their hat in with UMTS, albeit more as a technical platform than as a clearly defined range of services.
Support has been mobilized from industry within the UMTS Forum, from national governments and regulatory authorities as well as from pan-European
decision-making bodies such as ETSI and the Conference of European Postal and Telecommunications administrations (CEPT). UMTS frequencies are
currently being discussed within regional spectrum allocation bodies and will be decided upon at the next World Radiocommunications Conference in 2000.
But the overpowering presence of UMTS on the political front, important though it may be to the future development and pan-European rollout of
third-generation mobile, could sideline other wireless businesses. These particularly include fixed radio access broadband systems. Decisions on pan-European
spectrum allocation and licensing that are required today for these other wireless technologies are being delayed and subsumed into the UMTS timetable.
Furthermore, the policy decisions reached in the UMTS environment - for example, a high spectrum pricing regime - may be simply carried across to other
areas where they are not suited.
European policy-makers should pause to remember former examples of what can happen when attention is focused too much on technological standards
instead of a market concept. Both the IT sector and high definition TV bear witness to good intentions to promote European industry gone astray.
This is not to say that UMTS will not be a success, but policy makers need to acknowledge their limited ability to forecast market development.
Meanwhile, other viable technologies with a claim to bandwidth do, or will, exist. European governmental bodies should try to separate their market
intervention role and trade policy responsibilities from their role in promoting the rapid uptake of new technologies for the benefit of users and consumers alike
through open and competitive markets. To do this effectively, they must stand well back from particular technical solutions.
Roger Tuckett is Managing Director at WRQ Consultants, Henley-on-Thames, England.
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