ITU CHIEF URGES U.S. TO CATCH UP WITH REST OF WORLD ON 3G

Importance of U.S. frequency choices for International Mobile Telecommunications (IMT)-2000 was theme of his 2-day Washington visit, during which he met with officials of FCC, NTIA, State Dept. Critical role of U.S. progress on 3G front was theme he repeated at PCIA Foundation dinner Tues. and in meetings earlier that day with House Commerce Committee Chmn. Tauzin (R-La.) and Senate Commerce Committee Chmn. McCain (R-Ariz.). In dinner speech, Utsumi compared pending U.S. decisions with 3G auctions already held in countries such as Germany and U.K. In Wed. news briefing, he said most countries faced situation similar to that in U.S. in that bands singled out at WRC for 3G services already were occupied and decisions had to be made on how spectrum would be used for advanced services. “In the U.S. it is still unclear. Most frequency bands are used by other services or the government,” he said. He stressed importance of global harmonization of 3G spectrum decisions. “If the same frequencies are not used in the U.S., we may have some problems. Handsets may become more expensive,” he said. Because of enormous economies of scale of wireless equipment, slow start for 3G services in U.S. also could have broader economic ramifications, he said.

Overall, Utsumi characterized development and introduction of IMT-2000 as “the biggest project in the ITU.” He described 3G services as being far more than “simple mobile telephone service” because they can offer mobile Internet access and related m- commerce offerings. “IMT-2000 will be the next-generation basic telecommunications network,” he said. Asked about recent delays in 3G deployment plans in Japan and U.K., Utsumi attributed lags to policy issues unique to each country. Alluding to reported software glitches that have set back NTT DoCoMo’s 3G launch plans, Utsumi said impetus in Japan behind introduction of IMT-2000 would continue to be exhaustion of frequencies allocated for 2nd generation mobile. “They have to start [3G] in order to have more customers,” Utsumi said. He cited reports that German operators were examining alternatives such as network sharing to help fray 3G costs. “It is a matter of time,” he said.

To address long-standing challenge, Utsumi told us in separate interview that SATBAG recommendation would go before ITU Council in June to create group tasked with taking actions on satellite filing backlog. While various aspects of how to solve backlog have been under discussion, “the issue is not tackled yet,” he said. “It requires human resources. At the same time, it also requires changes in regulations to simplify procedures.” U.S. told ITU last year that clearing up backlog in processing satellite notification and registration notices by ITU- Radiocommunication Sector was “most critical near-term reform issue” for that sector. At that time, U.S. had floated possibility that ITU could review procurement practices with eye toward possible outsourcing of application handling.

SATBAG recommendation that will go to council was ratified last month at meeting of Working Group on ITU Reform in Salvador, Brazil. Backlog issue involves months, and in some cases years, that it can take filings for satellite systems to get through ITU process of identifying potential interference problems with other satellites or earth network stations. Problem has been compounded by recent increases in number of filings and in greater complexity of many applications. While ITU has been examining potential solutions to such problems for years, SATBAG is seen as broader effort to address them because as many as 10 different groups are studying various aspects but on separate tracks. Final report that working group prepared for ITU Council outlined possibility of providing more resources to address backlog “with a view to eliminating the backlog as soon as possible and preferably within the next 3 years.” Among issues presented by reform working group for council consideration were revision in cost recovery for satellite filings, including possibility of up-front payments and whether to include costs of software development. Final report described role of proposed SATBAG, which would include both member states and private sector participants, as overseeing “a coordinated approach for treating the complex and related factors contributing to the backlog.”

On Internet front, Utusmi expressed optimism on progress at WTSA meeting in Montreal last year and this year’s forum on IP telephony. ITU assembly in Montreal, over strong objections raised by U.S., had approved compromise recommendation that administrations involved in international Internet connections negotiate bilateral commercial arrangements for cost-sharing. U.S. took reservation, which meant it didn’t have to recognize language. Some industry observers said at time that recommendation centered attention on concerns of developing countries on concentration of Internet backbones and content in U.S. Internet interconnection language called for commercial pacts to account for possible need for compensation and value of traffic flow, number of routes, international transmission costs. “U.S. dominance is a concern [of some countries] but the concern in Montreal was the pricing of the backbones and the more accurate cost-based pricing should prevail,” Utsumi said, downplaying extent to which U.S. dominance allegations drove issues there. “The understanding was that today’s pricing is not cost-based,” he said.

“I hope that the conception gap between the USA and others must have narrowed in any case in Montreal,” Utsumi said. He described gap as putting on one side U.S. interests in conducting studies and leaving everything “to market power,” he said. “And the other countries, say, ‘No, no, the U.S. wants to monopolize the market.'” Discussions in Montreal as well as March IP telephony forum (CD March 9 p3) appear to have led to steps to bridge gap, in large part by educating ITU members on basics of IP technology, he said. “But both sides have come closer and developing countries all understood the importance of the IP network,” Utsumi said. “That recognition is also important to the U.S.”

Separately, when asked at news conference about telecom pricing concerns in Japanese market raised by U.S. and others, Utsumi said he didn’t believe that NTT is monopolizing market there. Before his ITU career, Utsumi served in various posts in Japan’s Ministry of Posts & Telecommunications, where he was involved in early market-opening efforts. He said high prices of telecom services in market alone wouldn’t necessarily add up to monopoly situation in Japan, where prices for services across board were high and should be reduced. On telecom pricing, Utsumi said “the Japanese people are only looking at Japan and are not looking at the rest of the world. It is very much isolated. They are not following the global trend and are very much behind the global trend.”

On overall issue of ITU reform, Utsumi also said in news briefing that organization was starting Web site to foster exchanges among regulators. First user of new site was FCC Chmn. Powell, Utsumi said, who apparently had toured site before he (Utsumi) had. Former FCC Chmn. William Kennard was “quite unique” in stressing importance of educating countries that didn’t have long history of independent telecom regulatory authority, Utsumi said. Of Powell, he said “in my opinion he has the same kind of approach” although he might take different routes to tackle such issues. In other reform areas, Utsumi cited progress that has been made in giving private sector greater voice at meetings, although those members still don’t have right to vote. Voting rights for other than govt. members are “a very controversial issue,” he said. However, at IP telephony forum in Geneva in March, private sector members could make presentations during floor discussions, which hadn’t been case at all past ITU meetings, he said. “We are giving them more power to participate,” he said of private sector members.