1 TC-19991027-008 William J. Cadogan, ADC Telecommunications Robert Coackley, Larscom September 22, 1999 President/CEO Re: A New Merged National Standards Infrastructure for Telecommunications Standards Dear: The approach of the Millennium has caused many companies and organizations to critically review where they are positioned and to make strategic changes where such analysis dictates change is required. We have recently witnessed many mergers and acquisitions in our industry, both on the supplier side and the operator side. We have also seen a shift in planning to more data and Internet Protocol (IP)-centric technology and networks for both fixed and wireless networks, and a convergence of fixed and wireless services. Many senior management individuals also believe the industry would be better served by a new, merged national standards infrastructure for telecommunications/communications standards and a single standards development organization supported by the current stakeholders. We know that the telecommunications industry uniquely needs standards in order to have interoperable networks and equipment. The American National Standards Institute (ANSI) has undertaken a project to prepare a National Standards Strategy for International Standards participation. We see more reliance and need than ever for "global" standards. With the rapid change in technology and shorter product cycles, we also see a need for global standards more quickly. Both Bob and I are active in TIA Board activities, I, as Chairman of the Board, and Bob, as the Chair of the TIA Technical Committee. At the CEO or more senior levels on TIA's Board, we have had many discussions as to whether the U.S. national standards infrastructure is properly positioned for our industry -- especially given global trends. We note the aggressive positions and strategic directions being set by other world-class standards bodies in Europe and Japan. They are positioning themselves and their industries to produce and drive global standards. As noted in a Staff Research Study in 2 the Office of Industries, U.S. International Trade Commission, Publication 3141, November 1998, "Global Assessment of Standards Barriers to Trade in the Information Technology Industry" (USITC Staff Study 23): The Japanese Government promotes Japanese standards internationally as well as domestically. MITI promotes the use of Japanese standards abroad through its foreignaid and development programs. With MITI funding, the Japan International Cooperation Agency has sponsored the study of standardization systems of rapidly developing Asian countries, such as China, Malaysia, and Thailand, and provided large grants to establish regional laboratories. The Japanese Government has a long history of providing technical training in standardization to officials of companies and standards and industrial organizations in developing countries. Japan actively promotes its telecommunications equipment standards throughout Asia by providing the majority of the budget of some Asian standards bodies, such as the Asia Pacific Telecommunity, and provides the Secretariat for others, such as the ASIA ISDN Council. Finally, similar to the EU, Japan also has provided standards-related assistance to Saudi Arabia, where it is funding a major standards program with the Saudi Arabia Standards Organization. Some experts assert that this is a planned effort to establish Japanese standards in developing country markets, and sets the stage for Japan to export products meeting these standards. (USITC Staff Study 23, Page 3-18, footnotes omitted) The European Telecommunications Standards Institute (ETSI), has a similar mandate from its Board to make ETSI standards "global standards," total funding around $30 million annually, and current participation from over 50 countries. The USITC Staff Study concludes in its Principal Findings (Pages 5-12 - 5-13): As indicated in chapter 3, many industry observers believe that Japan, and, more recently, the EU, have done more to promote their standards and technical regulations internationally than the United States, particularly in developing countries with relatively nascent national standards policies. In sectors such as computer hardware and telecommunications equipment, gaining and keeping global market share is dependent in large part on having access to foreign markets with comparable standards and technical regulations, be they mandatory or voluntary. Developing countries’ adoption of Japanese or EU standards and standards-related processes provides markets for Japanese or EU manufacturers, often to the detriment of U.S. producers. According to U.S. trade and standards agencies, unlike the EU and Japan, which have carefully coordinated strategic standards strategies, the United States “has adhered to pluralistic and uncoordinated systems for various standards- and conformity assessment-related activities.” While this approach may work domestically, it significantly hampers the United States internationally. Furthermore, the international and domestic costs of the various disjointed conformity assessment activities are extremely high, with both government and industry faced with multiple, duplicate assessment. These increase product cost, waste time and staff resources, and could be perceived by our trading partners as a technical barrier to trade. There is a need for the various entities, both government and private sector, to work together to create and maintain sound technical arrangements for the United 3 States on whose structures and functions all members of the public and private sectors agree. A 1997 report to Congress by the Trade Promotion Coordinating Committee, chaired by the Secretary of Commerce, stated that an effective U.S. standards strategy must achieve a coordinated approach among U.S. industry, U.S. Government agencies, and U.S. voluntary standards bodies. It also stated that such a strategy required working with “non-European counterparts to develop cooperative and coordinated international standards positions that reflect Asian, Latin American and North American interests.” This is needed to counter increased efforts by the EU to establish its standards and conformity assessment system in third-country markets, especially in Asia and Latin America, as well as in Central European countries through use of its EU accession agreements with those countries. (USITC Staff Study 23, Pages 5-12 - 5-13, footnotes omitted, emphasis added) In the recent activities related to third-generation (3G) wireless, it was ETSI and the Japanese who started the 3G Partnership Project (3GPP). The US had to "catch up" in order not to be left out. In its work on harmonization for 3G, the Operators Harmonization Group (OHG) saw the necessity to recommend "merger" of the two 3G Partnership Projects, and recommended this be done by the end of the year 2000. When the ITU and others became founding members of the Internet Corporation for Assigned Names and Numbers (ICANN) Protocol Supporting Organization (PSO), the short list included ITU, the Internet Society (ISOC), the World-Wide Web Consortium (W3C), and ETSI. (ITU Press Release, ITU/99-11, July 21, 1999). The ICANN PSO is an advisory body of ICANN concerned with the technical standards that let computers exchange information and manage communications over the Internet. No US standards bodies are currently participating. These recent events have caused many of us to seriously consider whether the US telecom standards infrastructure is positioned to compete in these global arenas, or whether US suppliers and US operators would be better served by a consolidated infrastructure using the best practices and strengths of both Committee T1 and TIA's Engineering Committees via some new structure, yet to be defined. It may also be necessary to consider other technical standards work done in other organizations as part of such a review. Generally, when organizations consider merging their strengths to be positioned for new challenges, such discussions occur at the CEO and Board levels. TIA did commission a survey of T1 members at the T1 voting level (typically managers and directors), and of those surveyed, they offered their personal beliefs that the US would be better served by a single telecommunications standards development organization (SDO), but that they were unaware whether their company had ever taken a position on such an issue. Thus, the reason Bob and I are writing to you as a TIA member company and also participating company in Committee T1, is to ask: 4 1. Would you support a consolidated structure and as a CEO sign a letter urging such consolidation of the strengths of both Committee T1 and TIA's Engineering Committees? 2. What other committees or portions of groups other than TIA and Committee T1 do you or your staff also believe should be considered in any such consolidation? It is important that we know where you stand. We would appreciate hearing a reply from you one way or the other by October 15, 1999, so the TIA Board has your input before the October 28th TIA Board meeting. If you have any additional comments or input, please respond to either Bob or myself. Since time is short, you can send your reply by email to bill_cadogan@adc.com or bob.coackley@larscom.com. Sincerely, William J. Cadogan CEO ADC Telecommunications Chairman TIA Board Robert Coackley CEO Larscom Chair of TIA Technical Committee Enclosure cc: TIA Board Members