(More on) NYT article today on "Holy War."
I am pretty sure that the NYT link will "expire" tonight, so here is the text of the article :
February 15, 1999
'Holy War' Over the Future of Wireless
By SETH SCHIESEL
Perhaps the most far-reaching battle in telecommunications these days is
not being waged in board rooms or stock markets. It is being fought in
places like the Mines Beach Resort and Spa outside Kuala Lumpur,
Malaysia.
There, in a conference room not far from the ocean, representatives of 34 of
the world's largest communications companies joined official delegates from
14 nations on Feb. 6 to try to forge a consensus on the next generation of
wireless phones.
That they failed was hardly surprising. For the
last 18 months, the biggest players in the
wireless business, both carriers and equipment
makers, have been embroiled in what an AT&T
spokesman describes as a financial, regulatory
and political holy war for control of the
wireless future.
In six weeks, the International
Telecommunication Union, a United Nations
agency that set up the meeting in Malaysia, is
scheduled to start approving international
standards for wireless technologies for the next
decade. But that process is being threatened by
a general reluctance to compromise on arcane
technical standards and in particular by
intransigence on the part of Ericsson of
Sweden and Qualcomm Inc., of San Diego,
two big communications manufacturers that
have feuded for years.
The stakes are immense for both consumers
and the companies. Over the next few years,
most of the world's wireless carriers intend to
introduce services that could prove technically
momentous. With an emphasis on bringing
high-speed data services to customers
wherever they are, proponents of so-called
third-generation wireless technology predict
that the next wave of mobile phones will
incorporate World Wide Web browsing and
video conferences. Billions of dollars in revenue
could await the companies that manufacture
and sell the equipment that will make this
happen.
At the same time, a wave of consolidations is
creating bigger and broader wireless carriers.
Last month, for instance, the Vodafone Group,
Britain's biggest wireless company, agreed to
acquire Airtouch Communications of San
Francisco, another huge wireless provider, for
$60 billion.
And as carriers extend their coverage, there is rising potential for callers to be
able to use one phone, with one number, almost anywhere and at rates that
are widely affordable. But to make that happen, the carriers, manufacturers
and, to some extent, governments would have to agree on a single standard.
Many industry insiders now think that will not happen.
"The idea of one standard or a universal standard sounds good," said Jim
Brewington, who runs the wireless business for Lucent Technologies, North
America's largest communications equipment maker and a relatively neutral
party in the dispute. "We would like to see it happen. I frankly don't think it's
going to happen."
Fabio Leite, a wireless counselor for the telecommunications union in Geneva,
said, "We have a lot of reasons to be pessimistic." And even the adversaries
concede that the fight, though couched in highly technical language, is really a
political struggle.
"If you're asking me is it a political issue or a technical issue, I'll say it's a
political issue," said Keith Paglusch, a senior vice president of Sprint PCS, a
big U.S. wireless carrier that essentially belongs to the Qualcomm camp. "It
really is a business/political issue."
The roots of the row over third-generation
wireless technology were put down in the
early 90s, when it became clear that the
first generation of wireless phones, analog
cellular, was going to be replaced by a
second digital generation known as PCS --
personal communications services.
At that time, Qualcomm was basically
alone in advocating a wireless approach
known as CDMA, for code division
multiple access. This works somewhat
like the Internet in that it breaks messages
into small bits, which are then scattered
throughout the wireless telephone
spectrum and reassembled at their
destination. The idea that CDMA, which
was originally developed for military
purposes, could be adapted to civilian use
was heresy to many wireless engineers
and their companies.
Perhaps the most vociferous in its
criticism was Ericsson, which had built a
big second-generation wireless business
on a competing technology called time
division multiple access. That technology
uses relatively narrow batches of wireless
frequencies, which it then breaks up many
times a second to convey many messages.
It is in a lot of ways similar to a third
technology in the wireless alphabet soup:
GSM, or global system for mobile communication, which is the dominant
second-generation standard in Europe and many other areas. It is largely
associated with Ericsson but is also supported by Nokia of Finland, Siemens
of Germany and others.
Despite the engineers' early doubts, CDMA, which was chosen by Sprint PCS
and a few other carriers, turned out to work just fine -- and perhaps better
than fine. So Qualcomm was upset when in October 1996, just as CDMA
was emerging, Ericsson sued Qualcomm, charging that Ericsson held patents
covering parts of Qualcomm's systems. The trial is scheduled to begin in April
in a Federal court in Texas.
Not much later, development began on the wireless third generation, and both
Qualcomm and Ericsson chose to use CDMA technology for transmitting
digital data at high speed.
But in developing third-generation systems, Qualcomm and Ericsson seemed
to have different agendas. Qualcomm wanted the new systems to be
compatible with existing CDMA systems, so that carriers would not have to
scrap their investments and Qualcomm could continue to sell
second-generation CDMA with the promise that it could be upgraded.
Ericsson, with no installed base of CDMA systems, did not appear as
concerned with the compatibility issue. So with European partners, it
developed a technology that is not compatible with existing CDMA services. It
said it simply wanted the most robust, advanced system possible. But some
U.S. executives and officials smelled a plot after the European Union adopted
a directive in December that appeared to force European carriers to use
Ericsson's third-generation technology.
Secretary of State Madeleine Albright; Secretary of Commerce William Daley;
U.S. trade representative Charlene Barshefsky, and William E. Kennard,
chairman of the Federal Communications Commission, sent a letter to the
Europeans expressing concern over the policy.
Last month, the European commissioner for telecommunications, Martin
Bangemann, appeared to mollify American policy makers somewhat by saying
that competing standards would not be barred from Europe. But suspicion
remains.
An American official, speaking on the condition of anonymity, said, "It
appears to some of us that our friends in Europe want to duplicate the
conditions that allowed GSM to become the predominant global
second-generation technology: Get it to market first, mandate it as a
pan-European standard and make sure it's not backwards-compatible with
existing wireless networks in North America."
Ericsson and Qualcomm have now each claimed patent rights over each
other's third-generation proposals, and the International Telecommunication
Union says it cannot certify a standard until the property rights are settled.
Qualcomm wants Ericsson to converge its standard with Qualcomm's in a
way that grants existing CDMA operators thorough compatibility. Ericsson
has so far refused, saying such convergence would yield a technically inferior
standard.
The end game may be a proliferation of multiple standards. For consumers,
that could mean abandoning hope for a seamless global wireless network. Or
it could mean higher prices if carriers and equipment makers have to offer
many technologies to insure seamless global wireless systems.
Copyright 1999 The New York Times Company |
