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U.S. DELEGATION PUSHES FOR 3G CONVERGENCE

The State Department late last month urged the European Commission to allow U.S. third-generation
wireless equipment and service providers a fair opportunity to compete in Europe.

In a letter sent to EC
Commissioner Martin Bangemann Dec. 19, the United States expressed concern Europe may be leaning toward
adopting wideband Code Division Multiple Access technology, a European-developed 3G standard, to the exclusion of
other technologies. The letter was signed by Secretary of State Madeleine Albright, U.S. Trade Representative
Charlene Barshefsky, Secretary of Commerce William Daley and Federal Communications Commission Chairman
William Kennard.

In a separate letter to the president, Senate Majority Leader Trent Lott (R-Miss.) urged the United
States to make 3G policy a top issue during the next year and to take measures to ensure that Europe and other world
markets are open for U.S. wireless equipment and service providers.

In addition, 10 Asian and European telecom
carriers are pushing for convergence, and the association formed to promote Time Division Multiple Access technology
has aligned to try to ensure TDMA is not left out of the convergence debate.

The U.S. concerns stem from a
European Union directive issued in November that could mandate a 3G standard dominated by Sweden’s L.M. Ericsson
and Finland’s Nokia Corp. and lock out American-developed technologies. In addition, several European countries plan
to auction spectrum for 3G systems this year, causing fears the auctions effectively could preclude any technology but
the European-sponsored 3G standard from being deployed in European markets.

“This is a question of basic
fairness in telecommunications trade,” said Barshefsky. “The United States market is open to the 3G
standard proposed by Europe. We expect access in Europe for technologies used by our industry as
well.”

“I am concerned that Europe may be effectively bypassing the (International Telecommunication
Union) consensus process by prematurely adopting a particular standard without regard to the market-based needs of
service providers in other countries, including the U.S.,” said Kennard. “The recently adopted decision of
the European Commission, which appears to prohibit the operation within Europe of any third-generation standard
except that adopted by the European Telecommunications Standards Institute, would preclude marketplace
consideration of rival standards and restrict consumer choice.”

The ITU is evaluating 15 3G standards from
around the world, many based on Code Division Multiple Access technology. ITU is expected to approve a family of
3G standards in March.

The North American GSM Alliance, a group of U.S. and Canadian Global System for
Mobile communications carriers, praised the letter to the EC, saying the group supports a multiple standards policy.
The Universal Wireless Communications Consortium, which represents TDMA carriers and vendors, also praised the
letter.

The EC letter also expressed support for harmonization efforts and a policy that would “ensure that
market-based solutions are offered to all service suppliers, permitting them suitable paths of evolution and transition
plans that protect the significant existing investment in second-generation infrastructure, while enabling evolution to
the third-generation without imposing excessive cost burdens for upgrading infrastructure.”

“The U.S.
government will not mandate a technology, but it does recognize that harmonization is viewed by many groups as a
logical outcome,” said William Bold, vice president of government affairs at Qualcomm Inc. “It is
concerned that other forces are using industrial policy to short-circuit harmonization efforts.”

Some groups
have shown support for harmonization efforts.

In November, ETSI, Europe’s standards body, forwarded a letter to
the ITU saying it will consider harmonizing all CDMA-related 3G proposals sent to the ITU, including cdma2000,
proposed by U.S. manufacturer Qualcomm.

And a group of 10 European and Asian carriers joined to promote
standardization of 3G technology. Those carriers include France Telecom Mobiles, Deutsche Telekom MobilNet
GmbH, Nissan Motor Co. Ltd., Japan Telecom Co. Ltd., NTT Mobile Communications Network Inc., Telia Mobile
AB, Telecom Italia Mobile, Singapore Telecom Mobile Pte. Ltd., SmarTone Mobile Communications Ltd. and Sonera
Ltd.

“Given the globalization trend in the society and economy, the ideal is to establish a worldwide mobile
communications platform based on a single technical standard,” read a France Telecom statement. “To
date, meetings amongst operators have been actively promoted in a bid to forge a consensus on the technologies and
systems for a single standard, and the operators have provided their utmost efforts to this end.”

Manufacturer
Ericsson Inc. has offered to harmonize 3G standards around W-CDMA technology, based on the GSM platform, and
cdmaOne-based cdma2000 technology by reducing the chip rate of W-CDMA from 4.096 Megachips per second to
3.84 Mcps. cdmaOne proponents say the 3.84 Mcps rate is still not compatible.

Meanwhile, the Universal Wireless
Communications Consortium and ETSI agreed to cooperate to strengthen the role of Time Division Multiple Access
technology in the 3G debate. The agreement calls for an increased exchange of information and technical documents,
the appointment of observers from both the UWCC and ETSI to participate in each others’ technical working groups,
and the use of each organizations’ text, graphics and data in the other’s publications.

“This is a major step
forward toward the convergence of TDMA with the world’s other dominant wireless formats,” said Gregory G.
Williams, UWCC’s chairman and vice president of wireless systems at SBC Communications Inc. “It also
demonstrates that industry groups can work together to resolve technology issues and advance the interests of
consumers without the intervention of governmental bodies.”

The ITU set a Dec. 31 deadline for
manufacturers to resolve intellectual property rights issues for 3G technology.

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