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POLITICAL FIGHTS REMAIN AMONG 3G PLAYERS

Industry executives in February hailed the TransAtlantic Business Dialogue agreement as a major breakthrough in the 3G debate, but today it appears standards bodies have made little progress to pursue this framework, and political infighting among the 3G players remains.

Executives in February agreed to pursue a tri-mode Code Division Multiple Access third-generation standard that will encompass direct sequence (W-CDMA), multi-carrier (cdma2000) and Time Division Duplex versions of CDMA technology. Sweden’s L.M. Ericsson and Qualcomm Inc. ended their intellectual-property-right deadlock over CDMA patents and jointly agreed in March to support approval in standards bodies of the tri-mode CDMA 3G standard. The Operators Harmonization Group (OHG), an assembly of mobile-phone operators from around the world, has held a series of meetings to hammer out technical differences within the tri-mode standard and present its findings to the International Telecommunication Union.

However, Commerce Department Undersecretary for International Trade David Aaron has requested standards bodies present their progress toward reaching the TABD agreement next month.

“Basically, standards groups haven’t looked at how to implement TABD,” said one industry executive.

The 3G Partnership Project, a standards group established in Europe that is developing much of the UMTS specification for the European Telecommunications Standards Institute, and 3G Partnership Project 2, a similar working group in North America developing cdma2000 technology, have not collaborated. And ETSI, according to concerned government officials, appears to be plowing ahead with the UMTS specification. ETSI did not comment.

Perry LaForge, executive director of the CDMA Development Group, said cdmaOne carriers are working to provide technical submissions to various standards bodies to make sure they embrace the TABD agreement. June’s TABD meeting could determine whether World Trade Organization threats from the U.S. government heat up once again, as officials remain concerned that Europe will not open its market to U.S.-developed 3G standards. The Clinton administration also is keeping close watch on Japan to ensure it keeps its markets open to all 3G technologies.

Weeks ago, government officials pressed Ericsson Chief Executive Sven-Christer Nilsson to lobby ETSI to adopt the TABD agreement. Though initially agreeing to jointly support approval of the TABD agreement with Qualcomm in all standards bodies, including ETSI, Ericsson now says it will push this framework for approval only within the ITU. Ericsson says the ITU is where all the standards bodies are developing a final standard.

According to several sources, cdmaOne operator AirTouch Communications Inc., which plans to merge with U.K. carrier Vodafone Group plc to become the world’s largest mobile phone operator, has said it plans to begin to privately pressure Ericsson to agree on technical parameters that would pave the way for economic harmonization of cdma2000 and W-CDMA technology. Sources close to AirTouch say Ericsson will not agree to certain technical parameters such as pilot scheme and synchronization methods. A combined AirTouch-Vodafone accounts for about one-third of Ericsson’s revenue stream.

“They seem to be falling away from everything,” said one executive close to the situation. “We’re almost back to two standards.”

AirTouch did not comment on the situation. Lars Nilsson, manager of strategic marketing with Ericsson in Dallas, said Ericsson only supports the TABD agreement, and the agreement does not include a consensus on the technical parameters. It’s up to standards and operators groups to decide the technical issues, he said.

“We support anything they (the OHG) decide on,” said Nilsson.

The OHG is refining a baseline proposal that addresses the key technical parameters of chip rate, pilot scheme and synchronization vs. asynchronization methods. AirTouch said carriers are making successful progress to agree on these issues.

Meanwhile, the OHG is set to meet this week in Toronto to determine how the tri-mode CDMA standard will interoperate with GSM-MAP and ANSI-41 networks before operators vote on the harmonization proposal.

Manufacturers Nokia Corp. and Qualcomm have proposed two different methods to achieve interoperability. Nokia’s method, supported by Ericsson and European operators, calls for both cdma2000 and W-CDMA technology to move ahead as developed today. W-CDMA carriers as needed then would add an adaptation layer to allow roaming with ANSI-41 networks. Backers of this option say it would allow them to push ahead with the standards without further delay. CdmaOne backers fear W-CDMA carriers may never add the layer.

Qualcomm’s proposal, supported by cdmaOne operators, calls for harmonization of air-interface layers, requiring changes in standards already developed. Opponents say this option sets back 3G development by at least one year.

Sources indicate interoperability will become another sticky and political issue. Many carriers believe an agreement won’t be achieved on this topic. CdmaOne carriers are expected to submit a third option this week.

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