Wage of Wireless War Is Standards

A full-scale battle has erupted in the wireless technology world among the recent buyers of broadband radio spectrum and vendors that want their technology standardized - and the winners will shape the next and biggest wave of mobile phone use.

After a company bids successfully in a Federal Communications Commission auction, its next step is to pick a technology to offer its product. The industry is abuzz over who is choosing time division multiple access (TDMA), code division multiple access (CDMA), or the global system for mobile communications (GSM). All three are digital wireless systems, designed to be faster, clearer and have greater capacity than analog - in essence, mechanical as opposed to digital - technology. The greatest advantage of GSM, which is actually a type of TDMA, is that it is now the tried-and-true standard in Europe.

TDMA multiplies the capacity of analog systems six times. Though largely untested, CDMA promises to increase capacity 10 to 20 times with better quality.

Up until last month, the war was heated but predictable. The tide seemed to be turning toward CDMA, as that technology received backing from giants Sprint Corp. and PCSPrimeCo. However, American Personal Communications announced it will use GSM to roll out the first system available to consumers in late 1995. With so many competing carriers, most in the industry agree that speed to market is vital.

That's when a group called Helping Equalize Access Rights In Telecommunications Now (Hear-It Now) popped up, and said GSM interfered with hearing aids, and asked the FCC to address the issue. "There is a danger that the wireless communications industry could become like the tobacco industry -- pretending there are no problems with their products when the overwhelming evidence shows there is a serious problem," said Hear-It Now founder Jim Valentine at a press conference last month.

While the group has the support of such associations as Self Help for Hard of Hearing People and the Alexander Graham Bell Association for the Deaf, there is a question of conflict of interest. Until last month, Valentine was chief executive of North American Wireless, an advocate of CDMA.

The two trade groups for wireless communication, the Cellular Telecommunications Industry Association and the Personal Communications Industry Association, have condemned Valentine's cause as a blatant grab at market share.

"It's a sleazy thing," said Michael Houghton, a spokesman for the CTIA. "[His] motivation is to ban or delay GSM phones into the marketplace."

For his part, Valentine said he just wants to protect the industry from future lawsuits and bad press, such as the cellular phone cancer scare a year or so ago.

"It's not that I'm a particular do-gooder in life," Valentine said. "I did this for financial stability."

The PCIA and CTIA both have said that while it is possible for GSM to cause interference, it has been used successfully in Europe for years and other digital technologies, including CDMA, are just as likely to cause problems.

Nevertheless, FCC Chairman Reed E. Hundt has taken the issue seriously, and has requested comments on whether the agency should investigate digital technologies before they are used in the United States.

"We are concerned about making wireless telephones hearing-aid compatible," Hundt said in a recent speech to the annual convention of Telecommunications for the Deaf.

When all the dust settles, there is some disagreement as to whether one technology will become the standard or the industry will find a way to use them all, maybe even making them compatible.

Jay Kitchen, president of PCIA, said it probably won't be a VHS/Beta situation [like VCRs], where one technology makes another obsolete. Instead, Kitchen compares it to the camcorder market, which includes machines that have tapes that go straight to the VCR and those that use smaller tapes. In fact, Kitchen said many of the companies that produce wireless technologies are offering more than one. "They're covering their bets," he said.

One such company is InterDigital Communications Corp., King of Prussia, Pa. InterDigital holds more than 400 patents on both TDMA and CDMA technologies.

San Diego-based QUALCOMM however, which is unequivocally CDMA, is out to quash its competition. "Ultimately, everyone will use CDMA," claims Kevin Kelley, a QUALCOMM spokesman.

To put more power behind that statement, the company last month announced an 8 million share public offering that would raise an estimated $350 million.

Janice Obuchowski, a former head of the National Telecommunications and Information Administration and telecom advisor to former President George Bush, has also thrown her weight behind CDMA. Last month, she started a new company, NextWave Personal Communications Inc., that will bid in the FCC's auction designated for small businesses.

Next Wave's chief executive Allen Salmasi happens to have been, until last month, president of QUALCOMM's wireless telecommunications division.

Others in the industry say that after speed, name recognition is most important. Some predict that the next skirmishes will be fights for high-profile sports sponsorships, such as tennis tournaments.

The battle has just begun, and one ball, at least, is in the FCC's court. That worries some, including CTIA's Houghton. "Where would the computer industry be if someone said all you can have is DOS?" he said.