When it comes to telecom associations, who can you trust?
In last week's Rule Maker column, I mentioned the "alphabet soup" of names floating around the wireless industry in reference to different wireless standards -- CDMA this, GSM that. This week I look at the numerous acronyms for industry groups and trade associations with names like ETSI, ITU, and UWCC.
There are more groups and consortiums than I can cover in this column, so I'll highlight the big guns, the ones you'll read about in wireless articles. I set out to answer three questions:
- What authority does the entity have?
- What is the objective of the organization?
- Who does it represent?
ITU -- International Telecommunications Union
Authority -- The ITU determines what technologies are acceptable for third-generation mobile systems, known as 3G. It has no legal power, but global wireless companies know that if they do not adhere to ITU standards they could find themselves without any dance partners. The ITU developed the key features for 3G known as IMT-2000.
Objective -- To promote global telecommunications through (1) sharing technical information, (2) standards, and (3) development assistance (i.e., financial aid, technical education) where needed. Now that 3G standards are set, the ITU is set to take on fixed mobile access, IP telephony, and electronic signatures and certifications.
Representation -- Countries and companies. Countries get to vote, but companies do not. Voting rights are structured so that, for example, the U.S. doesn't have more pull than Kenya. It's one country, one vote. The power of the ITU is in the hands of countries, not companies.
ANSI -- American National Standards Institute
Authority -- ANSI is the gatekeeper of the U.S. voluntary standardization system. It's not just about technology or telecom. American National Standards (ANS) dictate all sorts of specifications from screw thread depths to defibrillator voltage. ANS are not law, unless they are specifically accepted by a law-making authority.
Objective -- ANSI is about promoting conformity among American companies and then ensuring that those standards are also accepted around the world. Perhaps the most important function of ANSI is as an accreditor. ANSI qualifies or accredits companies so that the rest of the world knows exactly what to expect from their product. ANSI accreditation is a global stamp of approval. ANSI also represents the U.S. in the two international standards-setting organizations: the International Standards Organization (ISO) and the International Electrotechnical Commission (IEC).
Representation -- ANSI represents American standards (more than 14,500 of them) around the world. Membership is open to all -- corporate, academic, government, non-profit, and even foreign. It is structured more like the Olympic symbol than a pyramid to promote balance and a lack of dominance among its members.
ETSI -- European Telecommunications Standards Institute
Authority -- ETSI is the European equivalent to ANSI, except it focuses purely on telecommunications standards. It has no true authority, yet it helps develop European standards that might or might not be accepted by the European Commission (EC), the true rule maker in Europe.
Objective -- ETSI sets out to promote universality among Western and Eastern European telecommunications.
Representation -- ETSI has open membership with three levels: full, associate, and observer. Voting privileges are reserved for full members, and only entities from one of the 40-plus countries represented by the European Conference of Postal and Telecommunications Administrations (CEPT) can be full members. Unlike the ITU, votes are weighted by contribution. The bigger, the better. Nokia (NYSE: NOK) has more votes than some unknown carrier.
CTIA -- Cellular Telecommunications Industry Association
Authority -- None.
Objective -- The CTIA lobbies for telecom companies. It also puts on conferences and provides industry publications. The CTIA is a non-profit organization, but it owns 100% of a for-profit company called CIBERNET that is the leading provider of inter-carrier roaming billing and financial settlement services for the wireless industry. In other words, it is a clearing house for wireless billing. Both parties maintain there is no conflict of interest.
Representation -- The CTIA has three memberships: general, supplier, and associate. General members are entities that hold Federal Communication Commission (FCC) licenses or construction permits. Supplier members are service providers and equipment manufacturers. Associate membership is set aside for lawyers, consultants, and the like for an annual fee of $5,000. General and supplier members are charged dues based on their North American wireless revenues. Therefore, one can only assume that bigger is better, although the CTIA appears to remain bipartisan between the two dominant standards in the U.S.
It seems that each wireless standard has its own propaganda factory. TDMA and EDGE (Enhanced Data Rates for Global Evolution) are represented by the Universal Wireless Communications Consortium (UWCC). CDMA has the CDG or CDMA Development Group. It focuses on cdmaOne (2G) and cdma2000 (3G), but is not real big on W-CDMA. Then, of course, you have 3GPP2 and 3GPP. The former promotes cdma2000 and the latter touts W-CDMA.
What is to be learned from all these groups? Make sure you understand who is responsible for those growth rates you base your decision on. The ITU, ETSI, and ANSI are standards-setting organizations. The ITU and ANSI, for example, can't be influenced by money or the size of a contributor. Each member gets one vote.
The CTIA, UWCC, and the CDG are lobbyists with an agenda to push. Investors should understand that Qualcomm (Nasdaq: QCOM) is probably forking over big dollars to fund the CDG, and AT&T (NYSE: T) is probably doing the same for the UWCC. Take information from these groups with a grain of salt. Get both sides of the story. As I highlighted in a recent Rule Maker article, don't limit your exposure to one source.
Looking for some untainted industry information. Check out our Industry Focus 2001. It's 190 pages of Foolish coverage on 17 exciting industries such as optical networking components and wireless service providers.
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