WASHINGTON-With Korea moving closer to awarding a controversial third-generation mobile-phone license that was set aside for cdma2000 technology last year, the White House is being urged to address an overseas government action that was firmly rejected by the previous administration.
So far, the Bush administration has not officially weighed in.
In April, Telecommunications Industry Association President Matthew Flanigan wrote U.S. Trade Representative Robert Zoellick to take issue with Korea’s 3G licensing process. “TIA is concerned by the Korean government’s attempt to mandate and offer incentives for the deployment of a specific technology in one of the three networks to be licensed,” said Flanigan.
TIA represents U.S. telecom manufacturers. “Governments should stay technology-neutral and not favor one system over another,” said Flanigan.
USTR could not be reached for comment.
The Korean government last December granted two of the three licenses to consortia headed by state-run Korea Telecom and SK Telecom, South Korea’s largest mobile-phone operator. The two firms and a third bidder, LG Group, proposed 3G networks based on wideband CDMA technology, which will be deployed throughout Europe and in other parts of the world. Instead of granting three W-CDMA licenses, the Korean government decided to set aside the third license for cdma2000, a technology engineered by Qualcomm Inc. and embraced by Korean manufacturing juggernaut Samsung.
To date, the Korean government, which wanted to issue the final 3G license this spring, has had trouble attracting a solid applicant. Last week, LG and Hanaro Telecom continued fragile negotiations on whether to jointly seek the last 3G license, earmarked for cdma2000 technology.
Last fall, the State Department, under Madeleine Albright, and former U.S. trade representative Charlene Barshefsky publicly reiterated the U.S. position of technology neutrality and hinted at trade retaliation if Korea did not change its course on 3G licensing.
Korea appears to have ignored the threats and there is now sentiment that the Korean government did not go far enough in dictating 3G-technology policy.
In March, Reuters quoted Yang Seung-taik, Korea’s new minister of Information and Communication, as saying, “If the [government] had thought about the effect of the 3G selection on the telecom industry, it should not have given out W-CDMA licenses in the first place.
“Nokia is a firm believer that technology decisions should be made by markets, not governments,” said William Plummer, vice president of government and industry affairs for Nokia Corp. “It is very unfortunate that the Korean government is taking steps to overturn a unified marketplace decision in favor of a single 3G standard for Korea. It is particularly disturbing that government officials are contemplating anti-competitive incentives-like preferential financing and reduced license fees for operators willing to deploy the government-preferred standard, and, just as bad, mandated multi-mode 3G handsets, the development of which could delay or simply stymie introduction of efficient 3G networks and services.”
Asked why the Korean government set aside one 3G license for cdma2000, Hyun Shin, a spokesman at the Korean Embassy here, replied, “It’s a policy.” He said a final decision will be made after July.
Nortel Networks, a major wireless supplier, and Qualcomm were not available for comment.
Plummer said the Korean 3G controversy is different than the one that was fought between Qualcomm and the European Union over the absence of cdma2000 licensing because EU policy is based on marketplace forces.
