WASHINGTON-As U.S. and European wireless firms accuse each other of gaming the standards-setting process for third-generation wireless technology, it turns out the high-powered Qualcomm Inc. lobbyist playing the trade card here represented Sweden’s L.M. Ericsson in a separate standards fight two years ago.
In the escalating battle over 3G global standardization, Qualcomm and Ericsson are arch enemies. The two companies are leading the battle for access to a multibillion dollar market in the next century that promises Internet-friendly wireless phones with sophisticated high-speed data and multimedia features.
Simon Lazarus, a partner in the Washington, D.C., law firm of Powell Goldstein Frazer & Murphy has fought wireless standards issues from both sides of the Atlantic.
In 1996, according to lobbying disclosure statements filed with Congress, Lazarus worked for Ericsson on another standards matter involving a fight with Schaumburg, Ill.-based Motorola Inc. over public-safety wireless standardization.
Today, Lazarus advocates for Qualcomm, the San Diego developer of Interim Standard 95 Code Division Multiple Access technology.
Lazarus’s clients also have included America Online and long-distance telephone companies.
“I believe there’s a serious trade policy issue here,” said Lazarus.
Lazarus was retained by Qualcomm a month ago, though he has not reported his new client to Congress yet. The issue of Lazarus’ past representation of Ericsson was discussed and settled to all parties’ satisfaction before Qualcomm decided to retain him, Lazarus and Qualcomm said.
For sure, Lazarus is well suited to lobby an issue that Qualcomm wants framed as a trade dispute between the United States and the European Union-one in which the State Department’s role is key.
A former colleague of Lazarus’ at Powell Goldstein is Stuart Eizenstat, undersecretary of state for economic, business and agricultural affairs and former domestic policy adviser to President Carter.
Eizenstat is the boss of Vonya McCann, U.S. coordinator and deputy assistant secretary at State for international communications and information policy. McCann has jurisdiction over the U.S. 3G issues.
Lazarus said he has not talked with Eizenstat on the 3G issue. Eizenstat did not return calls for comment.
Qualcomm, according to Lazarus, sought a meeting with David Beier, domestic policy adviser to Vice President Gore. But that meeting did not take place.
“We would hope the vice president would become involved,” said Lazarus.
Gore’s office would not comment.
McCann, through State’s John Gilsenan, forwarded four 3G proposals to the International Telecommunication Union last Tuesday. The package included Qualcomm’s cdmaOne, an advanced version of a technology used by wireless carriers in the United States and abroad that nevertheless remains locked out of Europe.
Another proposal in the mix was wideband CDMA, a technology promoted by Ericsson, Finland’s Nokia Corp. and some U.S. wireless carriers. W-CDMA is based on the Global System for Mobile communications platform dominant in Europe. GSM is popular in other countries as well.
Qualcomm wants the ITU to converge the two CDMA 3G proposals, arguing harmonization will benefit manufacturers, carriers and consumers by creating economies of scale that will subsequently expand the market by lowering prices and enabling global roaming.
Some GSM proponents oppose CDMA convergence on grounds that doing so will sully 3G technology. Scott Harris, former chief of the International Bureau at the Federal Communications Commission, represents the North American GSM Alliance in the 3G debate.
Accusations abound
Qualcomm says Ericsson and Nokia, backed by the European Telecommunications Standards Institute, is using industrial policy to avoid competition from an American-made technology.
Qualcomm, Motorola and Lucent Technologies Inc., all leading U.S. wireless equipment manufacturers, have been accused of trying to persuade policy makers to withhold support for European-based W-CDMA technology.
All three firms deny those allegations, though it appears Lucent made a move in that direction.
Ericsson claims Gerald Peterson, chairman of a 3G standards committee, attempted to get W-CDMA dropped from the package of U.S. proposals at a meeting in Seattle.
“I was disappointed to read remarks in a press release from a member of standards committee T1 that may undermine committee T1’s negotiating position just on the onset of discussions with ETSI on how to best cooperate on 3G wireless standardization,” said Peterson in a statement.
Convergence talks will continue through March. The ITU has given its blessing to a family of 3G standards.
Sam Gronner, a Lucent spokesman, was more blunt about the Ericsson attack.
Ericsson’s “press release was issued at a time when it could only serve to undermine the committee’s pending meetings with a delegation from ETSI to commence discussions on how to harmonize third generation wideband CDMA proposals,” Gronner said.
“One has to ask,” he added, “whether Ericsson is engaging in precisely the conduct it decries: that is, serving its own commercial self interest and manipulating the open T1 committee process for its own benefit.”
Ericsson remains firm in the belief that Peterson’s actions were far from benign.
“The facts are the facts,” said John Giere, vice president of government relations for Ericsson.
Going forward
Aside from Peterson’s activities, it is unclear whether the State Department seriously considered scratching W-CDMA from its list of 3G proposals and how it will proceed going forward.
McCann did not return calls for comment.
It appears 3G has become a policy quandary for U.S. policy makers. Officials do not want American wireless firms put at a competitive disadvantage in the global market, especially in light of the contrast between open U.S. standards setting and the more parochial Euro-centric standards process.
But U.S. policy makers’ hands may be tied insofar as pressing 3G as a traditional trade issue, given the contributions of Ericsson’s and Nokia’s subsidiaries to the U.S. job market and economy.
It remains unclear what Congress will do with the issue. Rep. Connie Morella (R-Md.), chairwoman of the House Science subcommittee on technology, and other lawmakers favor backwards compatibility and interoperability of systems. But not all of 3G proposals sent by State to the ITU necessarily fit those criteria.
Besides trade, Qualcomm appears to have leverage with the EU by virtue of its CDMA intellectual property rights.
Irwin Jacobs, chairman of Qualcomm, says he will not license cdmaOne technology if Europe rebuffs convergence and moves forward with W-CDMA, which he says involves Qualcomm’s essential IPR.
“We think they are rethinking the situation,” said Jacobs, who was in Europe two weeks to discuss 3G.
Meanwhile, the latest flare-up reveals that Lucent is more closely aligned with Qualcomm than previously known. Motorola, for its part, appears to be taking a more cautious and less caustic approach to the 3G controversy.
