On Sunday, June 16, 2002, at 02:13 , Curt Sampson wrote:
> On Fri, 14 Jun 2002, Benjamin Kowarsch wrote:
>
>> There is a big difference between regulation by an independent
>> regulatory authority with a public mandate, accountable to the public
>> under clear legislation on the one side and a protectionist government
>> leaving that "regulation" to a near-monopolist.
>
> Sometimes, yes.
Not sometimes. The former is with a public mandate and supervision - the
latter is without. The difference thus, is not sometimes but always. And
that difference matters.
>> The latter is employed in order to keep competition at bay and assist
>> the the near-monopolist to keep the lead by way of creating an
>> environment where there is a deliberate imbalance in favour of one
>> participant. Japan has deliberately created such an environment.
>
> And yet Japan still has the best mobile phone systems in the world,
Glad you are using the plural here. Notably, two of those systems are
open standards.
Unfortunately CDMA has been limited by the fact that it's spectrum
allocation had to fit into the PDC spectrum. Despite that CDMA has been
a success, which favours my pro-open-standards argument. PHS, despite
some set backs in Japan, has been a tremendous success worldwide and
because it is an open standard, again favours my argument.
PHS is still the world's most spectrum efficient technology (although
people always make that claim for CDMA). Did you know that PHS is
designed such that operators share the entire spectrum dynamically ?
Thus, a not-so-well-performing operator like Astel doesn't waste any
spectrum at all. The same cannot be said of TuKa, which is wasting
spectrum while at the same time there is a shortage of spectrum amongst
the other operators. Interesting that resource sharing goes hand in hand
with standardisation and equal access by participants. In this PHS is
not only smart in the technology but also smart in the economics
department. The same cannot be said of PDC.
You only have to look at how cluttered the PDC spectrum is to figure out
that it is the messiest system in the world - an outcome of
protectionism. There was absolutely no technical reason for the
deliberate design flaws of the *implementation* of the PDC system:
- uplink and downlink have been deliberately placed upside down in order
to be incompatible with any other system there has ever been. there are
no benefits to this design choice.
- the paired PDC spectrum has been deliberately spread over both the
American 800 MHz band and the European 900 MHz band in order to make it
impossible to migrate to either. there are no benefits to this design
choice. 45 MHz separation was long proven to be absolutely sufficient
when PDC designers chose 130 MHz with catastrophic consequences:
- small patches of additional spectrum is not only cluttered all over
the place, but also the frequency separation which is fixed in any other
system is different for each patch. This is an outcome of the bad design
choices described above and there are no benefits but major
disadvantages that have come out of this.
This doesn't mean that PDC couldn't have been implemented
straightforward, for instance in the US 800 MHz band with a fixed
frequency separation of 45MHz, then later when more spectrum was needed
a contiguous band could have been allocated in the 900 MHz band, again
with 45MHz frequency separation.
Not only would this have meant an option for Japanese operators to
migrate to CDMA or GSM if they wished, but also it would have simplified
both the design and reduced manufacturing costs of PDC handsets. Thus it
would have fostered competition on two levels.
KDDI would have been able to convert their 800 MHz spectrum into CDMA,
fully compatible with the US CDMA system that is used outside of Japan
(same frequencies - same separation) allowing full roaming in both
directions with any CDMA handset. Further, Japanese manufacturers of
CDMA handsets wouldn't have to build three different kinds of CDMA
handsets (domestic only, domestic with roaming bands, export models).
Of course this makes the development and production of those handsets
more expensive than if those manufacturers didn't have to do this
nonsense. Of course this leads to those manufacturers being less
competitive than they would have been otherwise.
As far as KDDI's 900 MHz spectrum is concerned, they would have been
able to convert it into GSM if they wished. KDDI's competitiveness would
have tremendously increased. They would be able to offer service to all
travelers to the Americas (via their CDMA service) without the current
obstacle that there are only two or three handsets (without economies of
scale) available. Those users would also be able to use CDMA/AMPS dual
mode handsets for use in South America. There is at present no handset
that works in the Japanese CDMA band, the international CDMA band *and*
AMPS. Further, KDDI would have been able to offer services to travelers
to Africa, Asia and Europe (via their GSM service). Quite possibly,
Japanese manufacturers may have become pioneers for CDMA/GSM dual mode
handsets and lead the market for world phones that truly deserve the
name (operating on both major standards). At present there is still no
such CDMA/GSM phone available (exception being satellite phones where
GSM is for the satellite mode only and CDMA for the non-satellite mode).
Japanese consumers would not only have a choice between the widest range
of services but also the widest range of phones, because any phone
produced for any market would be usable in Japan. Last but not least,
KDDI would also enjoy all the roaming revenue from overseas visitors to
Japan, of which there is little at present because a special handset is
needed and prices are high due to lack of economies of scale.
Even PDC market players would have gained through streamlined
technologies. What's the point of a handset that has to cope with a
patchwork of spectrum cluttered all over an almost 200 MHz wide band
with four or five different frequency separations ? This is like
engineering a machine to drill the holes into a loaf of Swiss Cheese if
it didn't have the holes in it already.
Besides, this also has a very negative impact on Japanese emergency
services, who are limited to PMR systems that are far more costly to
procure than those used in other countries. Also, for all those toy
features in Japanese mobile phones, Japanese PMR radios are *missing*
features found elsewhere due to lack of economies of scale, features
that may make a difference for saving lives. In a country with a high
risk of natural disasters this is very questionable. The only reason for
this is that Japanese PMR makes up the holes in the Swiss Cheese of PDC.
While there have been efforts to improve this situation, success has
been limited because overall Japanese PMR is constrained by the way PDC
is implemented.
A harmonisation of the Japanese radio spectrum could only be beneficiary
for all, but it is very difficult and expensive once the wrong decisions
have been made and network infrastructure has been rolled out. If
anything, the Japanese government in its wish to protect DoCoMo from
competitors have shot themselves in the foot - and unlike yourself
*they* know and admit this.
Apart from benefits of harmonisation for end users, there are benefits
for shareholders and the economy as a whole. Quite possibly KDDI might
be on par with DoCoMo in market share today. So, my question, what gives
the Japanese government the right to deliberately favour one company
over another, one group of investors over another ?
> with many, many features that exist nowhere else. And at prices no
> worse (and sometimes much, much better--see e-mail vs. SMS) than
> elsewhere. Interesting, hmm?
>
>> Japanese innovation would have been based on either CDMA or GSM giving
>> many of those innovations a chance to influence and shape the CDMA and
>> GSM standards.
>
> Or they just would have gotten bogged down, and ended up with the
> same limited capabilities everyone else has. As Forrester points out:
>
> But wide participation will slow OMA and put global standards
> out of reach. Let's face it: The more players that get involved,
> the more time it will take for them to agree on anything at
> all -- and many will participate only to slow down development
> and control the market.
>
> (http://www.theregister.co.uk/content/59/25707.html)
And he also pointed out in that article that there will be regional
subgroups to establish subsets in the meantime (naming Europe). Thus,
there will be a short term and a long term benefit.
Actually, Curt, I am quite suprised to read those arguments coming from
you. Transposed into the world of IT, this can only mean that IBM should
reign with their proprietary mainframes in the server market, DEC (now
Compaq or HP) with VMS in the mid-range market and Microsoft with
Windoze in the desktop market. Big muscle proprietary technology
companies should call the shots because they have the power to go over
anybody else's interests. Open systems and Unix should have no place
because it is too much of a hassle to bring all those folks under one
hat. In the early beginnings of open systems this was the argument why
IT managers bought IBM mainframes and DEC VAXes. I remember that. I
remember the arguments I had - those arguments were not essentially
different from today's argument. In the long run though open systems and
standards agreed between myriads of parties are now winning the upper
hand in the world of IT. How long do you think it is going to take
before Linux (or whatever other open source desktop Unix) will replace
Windoze ?
We both know that although the transition has been very painful - the
overall benefit for manufacturers and consumers was worth it and this
trend will continue further.
>> The word is "arguably" not "certainly" ;-)
>
> Only if you know my opinions better than I do. :-)
The keyword being opinion makes it certainly "arguably" ;-)
Besides, I am not arguing to take away PDC, but instead let it compete
on its own (without a helping hand from government having imposed the
messing up of the spectrum).
While you seem to be certain that all Japanese (including business
users) prefer colour screens over other things that the Japanese market
clearly lacks, I am saying, let the kids have the toys, but not at the
cost of more serious users for whom a phone is nothing but a tool.
Just for fun, ask any Japanese you meet within the next month or so
- If they could choose between a DoCoMo handset with all the features
they are known for or a PHS handset with all the limits they are known
for plus its a little more bulky (say 25 grams), but the PHS handset
could still be used overseas.
You would find that there is a very steep curve with increasing age in
favour of international roaming ability, starting at about age 24, 25.
You can also explain the concept of SIM cards and again, although not as
steep, there is a clear trend favouring SIM cards and interchangeble
phones with increasing age.
The Japanese consumers over 30 are clearly under-represented in the
portfolio that mobile phone manufacturers offer in Japan today. Toy
phones are a principle trend in Europe too, but there you can at least
buy a number of business phones.
However, in Japan, nobody is putting any further thought into this
because it has traditionally been that you buy what is on the shelf -
the people who stock the shelves certainly know better what I should buy
and I don't want to stick out asking for something that sticks out of
what seems to be the crowd. While this kind of thinking is weakening, it
is stronger in age groups above 30 and increases with age. In other
words, those folks who have been educated not to mock up are those whose
tastes are less represented on Japanese shelves.
But that doesn't mean they wouldn't buy differently if what they like
was on offer.
regards
benjamin
Received on Sun Jun 16 13:43:36 2002