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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

January 20, 1999


In a letter from Commissioner Martin Bangemann to the United States' top foreign policy, trade and telecommunications officials, the European Commission reaffirmed its support for the outcome of an important, industry-led, multilateral negotiation in the International Telecommunication Union (ITU). The ITU's goal is to produce standards for the next generation of mobile telecommunications equipment. The United States had sought reassurances that European industrial policy would not inhibit efforts to use any standards in the European market that emerge from the ITU's industry-led talks. The European response fell short, however, of addressing several specific U.S. concerns regarding Europe's acceptance of all standards that are adopted by the ITU.

The European position was conveyed in a January 15, 1999 response, by European Commissioner for Telecommunications Martin Bangemann, to an earlier letter from Secretary of State Madeline Albright, United States Trade Representative Charlene Barshefsky, Secretary of Commerce William Daley and Federal Communications Commission Chairman William Kennard.

"I welcome Commissioner Bangemann's indication that forthcoming ITU recommendations will be used as the basis for European standardization of third generation (3G) wireless services, pursuant to European Community (EC) and Member States' international commitments," said Ambassador Barshefsky. "It is critical that Europe's commitment to the ITU process endure for as long as it takes to reach a consensus," she said.

Commissioner Bangemann's letter attempted to allay concerns within U.S. industry that it is Europe's intention to continue its prior practice of promoting the use of a single mandatory wireless standard within Europe. Commissioner Bangemann maintains that the European Community's recently-adopted Common Position to mandate introduction of Universal Mobile Telecommunications Service (UMTS) is designed to promote Europe-wide service rather than to prevent competition from other 3G systems. "I am concerned that the Common Position could give UMTS an unfair head start on other types of 3G systems, if EC Member States go ahead without awaiting the results of ITU deliberations," said Secretary Daley.

In that regard, the United States remains concerned that the European Common Position does not adequately reflect the advent of competition under the World Trade Organization (WTO) Basic Telecommunications Agreement. "Policies that reflected Europe's former monopolistic environment, such as mandating single standards, may have anti-competitive effects in Europe's newly liberalized telecommunications environment," said Chairman Kennard. "While the stated intention of Europe's recent action may be to assure a minimum level of inter-operability in Europe, the fact remains that the Common Position confers regulatory certainty and therefore a market advantage upon only one type of technology." Ambassador Barshefsky noted that, "There are numerous potential service providers, with many more 3G technologies to offer. In accordance with Europe's WTO commitments, EC Member States should now license and assign radio spectrum to the maximum number of service providers without regard to technology, based on the standards that emerge from the ITU negotiations."

Commissioner Bangemann indicated that the process for standardization of UMTS will operate in parallel with the ITU process, which aims for a decision by March 31, 1999 on key radio characteristics of 3G standards. The ITU has a deadline of December 31, 1999 for the final standardization recommendations. "I welcome Commissioner Bangemann's assurance that European standardization will proceed in concert with the ITU process, recognizing that some key European and American industry participants in that process are unfortunately at loggerheads regarding intellectual property rights," said Secretary Daley. "We would therefore expect that EC Member States will ensure that their 3G licensing processes accommodate, on an equally timely basis, any newly converged standard(s) and all others agreed by industry and recommended by the ITU."

Some United States, European and Asian mobile services operators have been working intensively to resolve the current U.S.-European industry impasse and lower the cost of building 3G networks. "We share Commissioner Bangemann's view that a primary goal of the ITU process must be to enable the evolution of current second generation infrastructures without excessive cost burdens to consumers for upgrading infrastructure," said Chairman Kennard. "In the United States, without mandating standards or national coverage, we have nationwide coverage by networks in place, or under construction, that use four different second generation technologies. The result is that some carriers offer local and long distance wireless service at rates that are competitive with wireline service prices. If the costs of upgrading existing second generation infrastructure can be successfully minimized in the United States, Japan and the Americas, and, if Europe and others license multiple technologies and competitors, we can achieve by 2010 a worldwide mobile telecommunications subscribership that will exceed traditional fixed wireline subscribership."