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To: Kenneth V. McNutt who wrote (20216)	12/21/1998 9:34:00 PM
From: SKIP PAUL	Read Replies (1) \| Respond to of 152472

More on NTT compromise debate> AWSJ: Tokyo Taxis Turn To Mobile Communications Technology By WAYNE ARNOLD Dow Jones Newswires Staff Reporter THE SEARCH for the future of portable communications takes us this week into the backseat of a Tokyo taxi. As anyone who's hailed a cab in Japan's sprawling capital knows, when the flag drops at $5.60, pocket change isn't enough to get you where you're going. Fortunately, MasterCard International has teamed up with a cab company and a cellular-network operator to let you charge your fare. MasterCard says nearly 700 Anzen company taxis are outfitted with portable terminals that drivers can use to swipe a MasterCard or one of the company's Maestro debit cards and check to see if your credit is good. This isn't the first time cabs in Asia have been able to take credit cards. Taxis in Australia and Singapore have been credit-card ready for a few years now. MasterCard launched similar systems in Seoul last year and earlier this year began introducing one in Taiwan. Japanese cabs used to accept credit cards, too. But because they weren't able to call into the credit card's network, they couldn't check to see if cards were good. After getting burned enough, companies stopped accepting credit cards. Now, MasterCard says, plastic will once again find its way into Japanese taxis. Mastercard's new system in Tokyo is a good example of how today's digital cellular networks can be used for more than just talking. Cellular operators say the advent of such information-oriented services explains the urgent need for a new generation of cellular technology for devices that can download big chunks of data like Web pages at least as fast as the latest personal computers - something regular readers will remember as the third generation of cellular communications, or 3G. Well, time for an update. First, some background for those new to 3G, which is still in the drawing-board phase: operators like Japan's NTT Mobile Communications Network, or Docomo, and Hong Kong's SmarTone Mobile Communications are in a rush to develop new information services so they can get customers to spend more money as competition drives down prices for plain old voice connections. At the same time they're taking on so many customers that they're running out of room on the limited amount of radio spectrum they can use with their technology. DoCoMo and SmarTone, as well as operators in Europe, most of Asia and parts of North America are rallying behind a technology called wideband-CDMA that DoCoMo helped develop with Ericsson and Nokia. W-CDMA's backers are hoping the International Telecommunications Union, or ITU, will back it as a global standard, one that would promote innovation by making any piece of W-CDMA equipment usable around the world. BUT NOW a blood feud between Ericsson and a company that opposes W-CDMA, Qualcomm, threatens to derail W-CDMA's acceptance and tear the cellular world asunder. Operators eager to adopt W-CDMA are so worried that last week several of them, in a rare display of common interests, issued a joint plea for a ceasefire. DoCoMo, SmarTone, SingTel Mobile and eight other companies from Japan and Europe urged the combatants to think about the greater good and stop holding 3G hostage to their commercial differences. Though couched in fancy acronyms and technical jargon, the battle between Ericsson and Qualcomm is really over money and markets. Neither wants to yield to the other's technology and waste research-and-development money. And both are trying to use the new technology to grapple over market territory in the U.S., Europe and Asia. Operators are worried that they'll upset the entire 3G apple cart in the process. On the surface, the latest feuding centers around something called a chip rate, a technical term for the way a mobile phone communicates via radio waves to the network. W-CDMA uses a chip rate that won't work with any existing technology - not Japan's, not the global system for mobile communications standard, or GSM, that dominates Europe and Asian networks and not Qualcomm's own standard CDMAOne. That means that anybody who uses it has to reinstall all the antennas that they use to cover their area of operation. W-CDMA's backers believe the benefits of broadband are worth the expense. Qualcomm doesn't. It backs a different wideband technology called CDMA2000 that is designed to work with CDMAOne. Qualcomm says the effort to create a global standard that won't work with CDMAOne is a deliberately unfair attempt by Ericsson to block it from new markets, especially Europe where no one uses CDMAOne, but also China where CDMAOne has suffered some serious setbacks lately. Ericsson says W-CDMA's chip rate gives it greater capacity for conversations. Qualcomm says it doesn't and demands that W-CDMA be "harmonized" to work with networks using its older technology. UALCOMM HAS TAKEN its case to the U.S. government, which is now agitating on its behalf in Europe and China, warning that moves toward making W-CDMA a lone standard could constitute an invisible trade barrier, even though American companies such as Motorola and Lucent Technologies are also gearing up to make W-CDMA equipment. Just to show how unhappy it is, Qualcomm has threatened to withhold licenses to any manufacturer on the many CDMA patents it holds that it says apply to W-CDMA. Qualcomm's critics say what it's really trying to do is establish a new source or royalty income instead of entering cross-licensing agreements to hold down costs. Qualcomm says that's hooey, since it earns less than 10% of its sales from selling rights to its technology. The ITU this month issued the companies an ultimatum: settle the patent dispute by the end of this month or it might just disqualify both W-CDMA and CDMA2000. It's the prospect of this that prompted the operators to beg for a compromise. In their statement, the operators appeared to back a compromise in which phones could operate on both standards. Keep the meter running, because this could get uglier: Qualcomm and Ericsson have been mud-wrestling since 1995, when Ericsson sued Qualcomm in Texas over patents it says applied to CDMAOne. That suit is scheduled to go to trial in February.