War over the world's wireless future

A meeting of the relatively obscure International Telecommunications Union (ITU) is attracting uncharacteristic attention from both government officials and industry executives. Preparations prompted an angry exchange of letters between the United States and Europe earlier this year.

At stake is the possibility of a single, worldwide standard for wireless phones, now divided among several largely incompatible technologies in various regions.

An ITU decision on a wireless standard could eventually allow consumers to use a single phone wherever they are in the world--instead of today's system, which often requires switching phones when traveling between U.S. states or overseas. The outcome also will affect what kinds of high-speed Internet and other services are available through a cell phone, and how much money consumers will pay for these services.

The ITU's goal of standardization sounds like a good thing, at least from a consumer's point of view. But the process has been controversial, with groups from the United States and Europe fighting hard to make sure their own standard--or something very close--comes out on top.

In today's wireless world, several incompatible versions of technology are currently in use. Most of Europe, Southeast Asia, and parts of the United States--or some 50 percent of the world's mobile phone users--use a technology called GSM.

But strong contingents in the States and elsewhere use opposing standards, alternately called CDMA or TDMA.

Each of these different technologies can be upgraded to a create a "third-generation" standard, allowing them to support high-speed Internet access and other new services.

This diversity, however, has created a field of landmines for the effort to create third-generation standards. European officials favor a technology that will boost local mobile giant Ericsson, but U.S. officials have complained about the European movement, in order to protect the interests of U.S. companies like Qualcomm.

Those conflicts heated up last year and early this year into an angry series of letters between European Union officials and U.S. regulators, including Federal Communications Committee chairman William Kennard, Secretary of State Madeline Albright, and Secretary of Commerce William Daley.

A bipartisan group of 14 influential U.S. Senators turned up the pressure late last week, sending a letter to President Clinton asking him to hold the line for multiple standards, rather than compromise for a single standard.

Meanwhile, a group of industry players last month agreed to support a proposal that backed multiple standards, with some new compatibility between the U.S. and European flavors of CDMA.

Brazilian face-off
The 11-day ITU meeting, which kicks off today in Fortaleza, Brazil, should settle some of the last year's debate.

The group has a deadline by the end of March to set the beginnings of technical specifications for the third-generation standard, with a final deadline by the end of 1999. This means that by the end of the 11-day meeting, it should be much clearer which one or which group of the competing technologies will drive future wireless investments.

Some close to the process say the group is likely to put off the decision further, however, to allow more time for the industry to develop its own convergence proposals.

"There is progress being made in the community," said Jim Tackesh, director of advanced programs for the U.S.-based CDMA Development Group. "The ITU wants to accommodate that."

Officials from the FCC and the Commerce Department are expected to be on hand to help keep U.S. interests up front. European officials will also be in attendance, and the new Secretary General of the ITU will meet privately with industry and government officials, in an attempt to smooth the waters.

But it's not yet clear whether one of the competing technologies, a "harmonized" combination, or a recommendation to allow several standards to coexist will come out of the meeting.

"Almost 50 percent of the mobile phone users in the world are using a phone based on GSM standards," said Ray Jodoin, senior wireless analyst for the Cahners In-Stat Group. "If I'm playing roulette, and almost half the wheel is black, and the rest is sprinkled with red and white, I know where I'm putting my money."

But ITU decisions are hard to predict, and very political, Jodoin cautioned. "They can walk into a room telling you white is white and come out saying black is white."