Capital Currents - Cell phone standards and antitrust behavior
I wonder about 3GPP.
As those of us who participate in industry standards development are continually reminded, since standards have strategic and competitive importance, they must be developed using fair methods by committees that allow wide participation and consider all proposals. A recent court decision suggests the mobile communications industry doesn’t develop its standards that way.
The case involves the technology used to provide precise location information for 911 callers. The complainant is TruePosition, the company that makes the precision location technology used by AT&T and T-Mobile at more than 90,000 cell towers. The defendants are Ericsson, Qualcomm, Alcatel-Lucent and Third Generation Partnership Project (3GPP). 3GPP is a standards-developing organization (SDO). The complaint is that the three companies, by controlling standards committees within 3GPP and violating its due process requirements, conspired to keep the TruePosition technology out of the next generation of cell technology (4G, also known as Long Term Evolution or LTE).
Excluding a technology from a standard recalls a 1982 Supreme Court case known as “Hydrolevel.” In that case, the court decided that the American Society of Mechanical Engineers, an SDO, violated antitrust laws by allowing its committees to exclude Hydrolevel’s technology from a standard.
TruePosition developed a technology called Uplink Time Difference of Arrival (UTDOA) that is used by AT&T and T-Mobile. UTDOA uses receivers that are collocated with cellular cell sites. A signal from a cellular handset is received at multiple cell sites at slightly different times, and the system computes the handset location by analyzing the time differences.
UTDOA has been accurate enough to satisfy the FCC’s location accuracy requirements, as well as new accuracy requirements for indoor locations. In contrast, there was a competing system – called Enhanced Observed Time Difference (E-OTD), which was based on patents held by Ericsson and Qualcomm – that was a failure.
UTDOA works with so-called 2G and 3G GSM cell technology but is not part of the 2G and 3G systems; it is a standalone technology that is sold as a separate system. UTDOA does not need to be part of the 2G and 3G standards. But the architecture of the next generation of cellular systems is different, and the location technology must be integrated with the cellular technology. So TruePosition has been trying to get its technology listed as one of the location technologies allowed in 4G systems.
Since at least 2008, according to TruePosition, the three defendant companies have manipulated the 3GPP standards process to keep TruePosition’s technology out of the 4G standard and give their own technologies an insurmountable head start.
In the first round after an antitrust complaint is filed, the defendants try to get the complaint dismissed. In this case, they argued that there was no conspiracy and that what they did was not illegal. But the burden is on the complainant to produce facts. In an August decision, U.S. District Judge Robert Kelly decided that Qualcomm has produced enough facts to allow the case to go forward to trial.
This is only the first round, and the judge noted that “it is possible that the actions of the corporate defendants were not the result of collusive illegal behavior in violation of the Sherman Act.” But he also said, “That is not to say that we find the allegations probable, which is not required at this stage, but we do find that when read together, they do raise a reasonable expectation that discovery will reveal evidence of an illegal agreement.”
What allegations, exactly? Here is part of the judge’s summary:
- Submitting the proposal of the 2008 work item, which included UTDOA within the “Justification” section but did not include it within the section proposing the technologies be included within the 3GPP standard
- Consistent late submissions
- Questionable timing of submissions and objections
- Using positions of power within the Working Groups to circumvent 3GPP due process rules
- Imposing unreasonable and questionable preconditions, as well as testing and simulation parameters, on the standardization of UTDOA that were not placed upon other proposed positioning technologies
- Supposedly submitting false simulation results in an attempt to discredit UTDOA and to prevent its inclusion in Release 9 while advancing their own proposed positioning technology
- Attempting to preclude standardization of UTDOA for standalone equipment implementations when all of the successful existing implementations of UTDOA rely upon only standalone implementations
- Using their positions as chairmen of relevant 3GPP committees to suppress competition from UTDOA, as well as other positioning technologies by others, and to advance technologies beneficial to them.
The 50-page decision makes fascinating reading. It’s possible to think of substituting the names of cable equipment vendors or TV manufacturers in place of Ericsson, Qualcomm and Alcatel-Lucent – and SDOs like SCTE, CEA and ATSC in place of 3GPP – and wonder whether it could happen to the cable industry.
In the Hydrolevel case, the SDO itself was sued and found liable because its management was not paying attention and allowed the antitrust violation to take place. In my experience, that is not the case for SCTE, CEA and ATSC management. But I wonder about 3GPP.