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CONTACT: Patrick Ross
November 16, 2004
(202) 289-8928
Standards Offer Insight on Network Growth
Scholar Examines European, U.S. Role in 2G Mobile Phone Deployment

WASHINGTON D.C. - An examination of standards-setting by the U.S. and Europe in digital mobile phones can provide "a window on how next-generation Internet, telephone, or television networks will work," according to a new paper released today by The Progress and Freedom Foundation. Standards are "the lingua franca of digital networks," writes Andrew L. Russell, and he provides a case study on the role of standards in 2G mobile phone deployment in Europe and the U.S.

Pan-European agencies worked closely with the European cellular industry throughout the 1980s and 1990s to settle on the Global System for Mobile Communications (GSM) standard, and 26 European nations harmonized their spectrum to permit roaming. With regulators imposing a de jure standard that was developed with the private sector, European mobile service providers raced past their U.S. counterparts.

The FCC, in contrast, insisted that each and every local market have two providers. This "slow and inefficient license allocation process" lasted most of the 1980s and prevented roaming agreements, Russell argues. Roaming was further delayed when different carriers adopted their own standards, with the FCC declining to intervene.

Still, Russell argues one virtue of a lack of government mandates is that it "creates incentives for entrepreneurs and upstarts to unveil new innovations in the marketplace." The first 2G wireless standard, Time Division Multiple Access (TDMA), was soon upstaged in the U.S. by Qualcomm's Code Division Multiple Access (CDMA). But that standard today is only used by some carriers, with others preferring GSM or in Nextel's case, its proprietary iDEN. Also, while the FCC's insistence on competition in every market may have slowed initial use of spectrum, Russell argues it "finally seems to be paying off for consumers; one recent estimate suggested that American mobile phone service can cost up to 50% less than comparable service in Europe."

A lack of set standards can lead to innovation, Russell says. But "regulators will still play important roles in the support of standardization and in the allocation of spectrum," and 2G growth in Europe shows that "significant benefits follow from regulators taking decisive, competent actions." The key, Russell argues, is to have coordination between public and private institutions.

Andrew L. Russell is a Ph.D. student in the Department of the History of Science and Technology at The Johns Hopkins University. He has worked at the Harvard Information Infrastructure Project in Harvard University's John F. Kennedy School of Government and has presented papers on Internet standards before the Society for the History of American Foreign Relations and the Telecom Policy Research Conference. The views expressed are his own and do not necessarily reflect the views of the Foundation.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation