Commerce Secy. Donald Evans, Secy. of State Colin Powell and U.S. Trade Representative Robert Zoellick voiced concern to the Chinese govt. this week about the dangerous precedent that would be set by a mandatory Wi-Fi standard. The Information Technology Industry Council (ITI) and other U.S. business groups have objected to a proprietary standard China is backing for Wi-Fi, saying it flouts World Trade Organization commitments. U.S. industry has cautioned that enforcement of the standard, set to start June 1, could halt import of all Wi-Fi enabled devices into China. Evans, Powell and Zoellick wrote jointly this week to Chinese Vice Premiers Wu Yi and Zeng Peiyan, urging the Chinese govt. to work with the U.S. on the issue. “We hope the Chinese will carefully consider the matter and take into account the significance of such high-level U.S. government involvement,” said ITI Pres. Rhett Dawson. “Engagement by 3 top administration officials is rare, if not unprecedented, and should send the strongest possible signal that the U.S. government is taking this matter very seriously.” The U.S. concerns center on the Wireless Local Area Network Authentication & Privacy Infrastructure (WAPI) provision of China’s standards, which U.S. industry has said is incompatible with internationally recognized standards such as 802.11 technology. ITI has said the Chinese govt. hasn’t given foreign manufacturers the encryption algorithm needed to comply with the new standard, but has provided it to 24 Chinese firms. China would require foreign manufacturers to manufacture equipment under this standard, which U.S. officials have said runs counter to a basic tenet of WTO obligations, which is national treatment.
Exports to China
Erin Dozier, ex-Akin, Gump, named Media Bureau special advisor on media ownership… President Bush said he would promote Commerce Dept. Gen. Counsel Theodore Kassinger to Deputy Secy. of Commerce… Allan Rabinoff of Intelligent Network Communications joins China Wireless Communications board… Gavin Harvey, ex-E! Networks, named Outdoor Life Network pres., replacing Roger Williams, resigned… Lee Chaffin resigns as BET senior vp-affiliate sales & mktg.
The Information Technology Industry Council (ITI) and others stepped up pressure Tues. against a proprietary standard China backs for Wi-Fi, saying it flouts World Trade Organization (WTO) commitments. Enforcement of the standard, set to start June 1, could halt imports of all Wi-Fi enabled devices into China, the groups warned. Senate International Trade Subcommittee Chmn. Thomas (R-Wyo.) urged Chinese Ambassador Yang Jiechi in a letter to resolve the flap over the wireless local area networks (WLAN) standard before then.
There are more people using high-speed Internet connections than dialup, according to a study by Ipsos- Insight of 13 markets worldwide. The survey showed 50% of users worldwide accessing the Internet via DSL (31%), cable modem (15%) or high-speed fiber (4%), vs. 39% dialup and 6% using wireless or other access. The highest rates of broadband access are in Japan, Germany, Canada and urban areas of China, where almost 75% have broadband. Overall, wireless Internet access, including Wi-Fi, grew by 145% in the past year, the study said. Though only 4% used wireless as their primary Internet connection, 17% used wireless in some capacity, it said.
Marking its 2nd consecutive quarter of profitability, Lucent said Wed. its net income in the first quarter of fiscal 2004 ended Dec. 31 was $338 million, reversing a net loss of $264 million a year ago. It said it had $2.26 billion quarterly revenue, up 9% increase in a year. The company said the first quarter’s earnings per share included the positive impact of income tax benefits and a gain on an investment sale, partly offset by net business restructuring charges and a charge for revaluation of warrants to be issued as part of Lucent’s global settlement of shareowner litigation.
Although the total number of worldwide cable TV subscribers increased last year, the rate of growth in 2003 was the slowest in more than a decade, said a new study by In-Stat/MDR, which projected total cable TV subscribers would reach 395 million by 2007. The report said cable subscriber growth would result from not only cable operators’ ability to attract new subscribers to their traditional analog video services, but also from recently deployed digital video, voice and data services. The report said annual cable subscriber growth was tracking around 3% in 2003, but digital cable subscriber gains reached 22% in the same time frame. Subscriber growth, the study said, increasingly was threatened by satellite services. In-Stat/MDR has also found that: (1) The top 4 countries in terms of total cable subscribers remained China, the U.S., India and Germany. (2) The majority of worldwide cable subscriber growth in the last 3 years had come from Asia, with China and India accounting for up to 60% of all annual subscriber additions. (3) The N. American cable market actually shrank a little in 2003, as several hundred thousand former cable subscribers either switched to satellite services or simply “pulled the plug” on cable.
Mexico and China top a list of countries with major trade barriers to U.S. telecom companies, the U.S. Council for International Business (USCIB) said in comments to the U.S. Trade Representative (USTR). It also accused France, Germany and India of failing to meet telecom obligations under the World Trade Organization (WTO). USCIB stressed the importance of: (1) Strong, effective and independent telecom regulatory authorities with effective enforcement powers. “In all markets, such regulatory authorities would enhance compliance with trade commitments and minimize barriers to foreign participation,” it said. (2) Ensuring compliance with the WTO Reference Paper requirements for cost-oriented interconnection. Mexico’s failure to open its telecom market to foreign competition is “a top concern for U.S. firms,” USCIB said, saying Mexico’s telecom market was worth $14 billion annually and that country reperesented the 2nd largest international route for U.S. calls. It complained Mexican telecom regulator Cofetel, whose authority was limited to issuing recommendations to the Mexican Ministry of Communications & Transport, “repeatedly [had] failed to effectively regulate and enforce its regulations” that hurt competition. “The current regulatory climate continues to serve to sustain market dominance by Telmex,” which has “denied competitors phone lines needed to provide service, priced its own services at predatory rates, refused to allow other carriers to interconnect to its network and withheld fees it owes competitors,” it said. USCIB urged Mexico to eliminate its prohibition on foreign control of Mexican carriers authorized to own and operate basic telecom facilities. It also expressed concern about the impact of tax measures on telecom. For example, it said, effective Jan. 1, 2002, the Mexican govt. imposed a new 10% luxury tax on some mobile telecom that “unjustly burdens the mobile communications sector, particularly considering that it has been levied in addition to an existing 15% value-added tax.” While recognizing the positive steps China has taken to implement WTO commitments, USCIB said the country’s “overly narrow” interpretation of market access, coupled with its lack of an independent regulator, harmed U.S. companies and contravened China’s WTO commitments. “We are especially concerned by China’s unreasonably high capitalization requirements for basic services, which will greatly limit market access,” USCIB Pres. Thomas Niles said. USCIB also expressed concern that several European Union (EU) members had failed to implement a new EU framework on telecom liberalization in 2003, saying “warnings from the European Commission to member states were not being taken seriously.” It said it was particularly concerned about France and Germany, which it said were unlikely to adopt new national legislation implementing the new EU regulations until at least the 2nd quarter: “The governments of Germany and France maintain significant ownership in their respective incumbents, and therefore have an incentive to delay transposition of the new EU regulations as long as possible.” USCIB said there were “substantial failings” in the implementation of the rules on cost and accounting information that “underpin the working of the entire regime.” It said the EU had been unable to secure compliance in the long term, noting that while several members had been taken to the European Court of Justice for failure to implement those rules, “this process has proven to be quite lengthy, and it can take upwards of 4 years to secure a final determination.” Except in the U.K. and Ireland, “no effective regime is in place to ensure the WTO obligations on cost-orientated pricing for interconnection and non- discrimination can be met.” USCIB urged the USTR to monitor developments closely and “maintain appropriate pressure on the relevant national authorities in this regard.”
Alcatel said it would provide its IP service router to China Netcom’s subsidiary Shandong Netcom to deploy an e- govt. backbone network for the Shandong provincial govt. in China. The network build-out is expected to be completed in March.
The WiMAX Forum said it had more than doubled its membership over the last 5 months, to 67 members. Among the new members of the group, which certifies interoperability of broadband wireless products, are AT&T, Covad, Siemens, Hong Kong-based PCCW and China-based ZTE Corp., the group said.
U.S. and Chinese companies Tues. signed 11 contracts for supplying electronics and communications equipment with a total value of $2.3 billion. The deals were signed at a U.S.-China Seminar On Prospects For Cooperation In Telecom & IT in Washington. Opening the seminar, U.S. Commerce Secy. Donald Evans said the contracts were “another clear demonstration of the growing relationship between the United States and China” and of the fact that U.S. telecom and IT “manufacturers can compete with anybody in the world.”