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To: Sawtooth who wrote (21710)	1/20/1999 5:16:00 PM
From: Ruffian	Respond to of 152472

Ericy Propaganda Machine At Work> ERICY/ETSI Propaganda in today's FT --> by: unibitri 13963 of 13973 FT Commentary (print copy p. 13) or http:\\www.ft.com: CROSSED LINES Arguments about technical standards are rarely the stuff of international diplomacy. So the recent flurry of exchanges on the subject between senior US officials, led by the secretary of state, and the European Union's industry commissioner is a sure sign that something bigger is at stake. The source of discord is US unhappiness about Europe's efforts to win international acceptance of its planned common standard for a new generation of mobile telephones. Washington suspects a European plot to use the standard to discriminate against US suppliers - a charge which Brussels firmly rejects. The US stance appears influenced partly by lobbying by Qualcomm, a US leader in cell-phone technology, which fears Europe's proposed standard would jeopardise its own business interests. But the dispute also reflects divergent philosophies. The US prefers standards to be set by the market. But in Europe, the trend - particularly in telecommunications - is increasingly to set common standards through institutionalised industry co-operation. Each approach has its virtues. But in mobile telephony, Europe's model has already proved itself, by encouraging adoption of the GSM system throughout the region and in much of Asia. In the US, by contrast, four incompatible types of mobile network co-exist. Standardisation not only benefits users, by enabling them to use the same telephone in many different places. Europe's experience shows that by enlarging the available market it improves scale economies, cuts costs, encourages competition and stimulates demand. GSM's success gives European industry a head start in setting the next international standard for mobile phones. If US manufacturers are at a disadvantage, it is largely self-inflicted. As well as failing to unite behind one standard, most have spurned offers to join the European effort. Such rugged individualism is an inefficient use of resources and inconsistent with the development of a global market for equipment and services. This week's planned merger between Britain's Vodafone and AirTouch of the US is a sign of the pressures in that direction. Standard-setting must keep pace. The US industry needs to recognise that sensible co-operation can expand markets and enhance competition. It also needs to take a more international approach. Europe should reciprocate by encouraging the widest possible industry participation in its decisions, as a stepping stone towards truly global standards.