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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: P2V who wrote (2456)	12/20/1998 11:06:00 PM
From: P2V	Read Replies (2) \| Respond to of 5390

The case against Convergence ! gsm-pcs.org Quote from Economic White Paper on National Third Generation Wireless Standards -Executive Summary- by Joseph Farrell and Michael D. Topper " Moreover, it can create stronger incentives for innovation, allow the market to resolve uncertainty regarding the relative performance of competing standards, and reduce the need for regulatory or consensus management of the industry. 2 Second, we understand that proponents of a mandated standard point to economies of scale in production and seamless nationwide roaming as putative benefits of a single U.S. standard. However, examination of the U.S. wireless service market and of the wireless manufacturing market indicates that economies of scale and efficient nationwide roaming in third generation wireless are likely to come about even absent a single U.S. standard. Thus, there is no need for a single national standard, let alone for a government mandate with its attendant harms. Third, we understand that some interested parties point to the alleged prospect of job creation as a reason to mandate a standard. But the primary consideration of a standards policy should be economic efficiency and the long-run interests of consumers — not the special interests of specific manufacturers and associated claims about jobs. The wireless manufacturing industry is only a fairly small part of the picture. U.S. consumers, U.S. service providers, and the federal budget all benefit when the market is allowed to choose the best mix of technologies. Fourth, even taking the “jobs” argument on its own terms, manufacturing jobs and manufacturing leadership depend very much on a host of factors that affect manufacturing advantages, not simply on the country of origin of a standard. It would therefore be a leap of faith to assume that a U.S.-mandated third generation standard would lead to lasting benefits for U.S. manufacturers or manufacturing workers. The evidence is that wireless manufacturing jobs are internationally mobile. 2 Allowing multiple standards need not stop the emergence of a single US standard through market forces or private standard setting bodies. In other words, mandating a single standard is not necessarily required in order to achieve any benefits associated with having a single US standard (although we believe that the latter benefits are quite limited in this case). A single standard that emerges from market forces or consensus voluntary standard-setting is likely to be less damaging to innovation and competition than a compulsory government mandate. November 17, 1998 Page 2 to resolve uncertainty regarding the relative performance of competing standards, and reduce the need for regulatory or consensus management of the industry.2 Second, we understand that proponents of a mandated standard point to economies of scale in production and seamless nationwide roaming as putative benefits of a single U.S. standard. However, examination of the U.S. wireless service market and of the wireless manufacturing market indicates that economies of scale and efficient nationwide roaming in third generation wireless are likely to come about even absent a single U.S. standard. Thus, there is no need for a single national standard, let alone for a government mandate with its attendant harms. Third, we understand that some interested parties point to the alleged prospect of job creation as a reason to mandate a standard. But the primary consideration of a standards policy should be economic efficiency and the long-run interests of consumers — not the special interests of specific manufacturers and associated claims about jobs. The wireless manufacturing industry is only a fairly small part of the picture. U.S. consumers, U.S. service providers, and the federal budget all benefit when the market is allowed to choose the best mix of technologies. Fourth, even taking the “jobs” argument on its own terms, manufacturing jobs and manufacturing leadership depend very much on a host of factors that affect manufacturing advantages, not simply on the country of origin of a standard. It would therefore be a leap of faith to assume that a U.S.-mandated third generation standard would lead to lasting benefits for U.S. manufacturers or manufacturing workers. The evidence is that wireless manufacturing jobs are internationally mobile. 2 Allowing multiple standards need not stop the emergence of a single US standard through market forces or private standard setting bodies. In other words, mandating a single standard is not necessarily required in order to achieve any benefits associated with having a single US standard (although we believe that the latter benefits are quite limited in this case). A single standard that emerges from market forces or consensus voluntary standard-setting is likely to be less damaging to innovation and competition than a compulsory government mandate."