When to Broadcast !ntentions and When to Exploit Relationships: !

nformation Sharing Strategies in the
Second Generation Wireless Standards Contest








by


Jodi Ann Potter


Katz Graduate School of Business, University of Pittsburgh, 2006











Submitted to the Graduate Faculty of


the Katz Graduate School of Business in partial fulfillment


of the degree requirements for the degree of Doctor of Philosophy








University of Pittsburgh


2006



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UN!vERS!TY OF P!TTSBURGH


KATZ GRADUATE SCHOOL OF BUS!NESS








This dissertation was prepared

by


Jodi Ann Potter



!t was approved by


Dr. Jake Birnberg, Katz Graduate School of Business, University of Pittsburgh
Dr. John Camillus, Katz Graduate School of Business, University of Pittsburgh
Dr. John Prescott, Katz Graduate School of Business, University of Pittsburgh
Dr. Martin Weiss, Department of !nformation Sciences and Telecommunications, University of
Pittsburgh
Chairperson: Dr. Sue Cohen, Katz Graduate School of Business, University of Pittsburgh










Keywords: information sharing, technology diffusion, technical standards, standard setting, early
adopters, network externalities, wireless, 2G, Qualcomm, Ericsson






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When to Broadcast !ntentions and When to Exploit Relationships: !nformation Sharing Strategies in the
Second Generation Wireless Standards Contest

Jodi Potter, PhD


Katz Graduate School of Business
University of Pittsburgh, 2006



This study offers a new approach to understanding the diffusion of a new technology; specifically on the
process of information sharing and its influence on a market based standards contest. Since diffusion
relies upon adopting firms to gather information and learn about a new technology prior to adoption,
communication of a technology's attributes and benefits is essential to the overall process of diffusion.
The flow of information from sponsors to adopters is an influential action that serves to impact both the
speed and degree of adoption of a new technology and can influence the outcome of market based
standards contest. ! explore these issues through a case analysis of the wireless phone industry and the
2G standards contest in the United States by studying the information sharing actions and events of two
technology sponsors; Ericsson and Qualcomm. ! develop a model of information sharing that identifies
how aspects of timing, message, media, and target of influence combine to form two primary types of
information sharing; cascade and broadcast. This model draws on concepts from the relevant body of
literature on standards contests, social networks and communication theories.


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ACKNOWLEDGENENTS


! wish to express my sincere thanks to Dr. Susan Cohen, my committee chairperson, through whose
tireless efforts ! garnered the skills and ability to complete this study. She was always there to offer
valuable critique, judicious advice and much needed encouragement. ! am also grateful for the support
from the rest of my committee members and for all their insightful comments and guidance in making
this project become a reality. ! also offer tremendous thanks and gratitude to my family whose support
and patience allowed me the time and focus that ! required to complete this undertaking.





































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TABLE OF CONTENTS



1.0 THE SETT!NG OF TECHNOLOGY STANDARDS................................................................................ 1
2.0 REv!EW OF THE RELEvANT L!TERATURE...................................................................................... 8
2.1 THE CONNUN!CAT!ON OF D!FFUS!ON...................................................................................... 8
2.2 STRATEGY AS !T RELATES TO STANDARDS CONTESTS............................................................ 10
2.3 STANDARDS CONTESTS - KEY TACT!CS.................................................................................. 12
2.+ L!NKAGE BETWEEN T!N!NG AND STANDARD DEvELOPNENT................................................... 14
2.5 THE PROCESSES THROUGH WH!CH STANDARDS ARE ESTABL!SHED PLAY A ROLE !N
DETERN!N!NG NESSAGE CHARACTER!ST!CS AND NED!A CHO!CE................................................. 18
2.5.1 The Committee Process ................................................................................................... 18
2.5.2 The Narket Process ......................................................................................................... 20
2.5.3 The Process Of Social !nfluence........................................................................................ 22
3.0 BU!LD!NG THE NODEL............................................................................................................... 26
3.1 !NFORNAT!ON SHAR!NG STRATEG!ES: BROADCAST AND CASCADE......................................... 26
3.2 A NODEL FOR !NFORNAT!ON SHAR!NG !N A TECHN!CAL STANDARDS SETT!NG PROCESS ....... 28
+.0 NETHODOLOGY......................................................................................................................... 32
+.1 DATA COLLECT!ON ................................................................................................................ 34
+.2 DATA ANALYS!S..................................................................................................................... 35
5.0 BACKGROUND: THE W!RELESS !NDUSTRY.................................................................................. 38
5.1 DEGREE OF R!vALRY.............................................................................................................. 38
5.2 BARR!ERS TO ENTRY ............................................................................................................. 39
5.3 TECHNOLOG!CAL FRAGNENTAT!ON........................................................................................ 42
5.+ GROWTH............................................................................................................................... 44
5.5 NARKET FRAGNENTAT!ON..................................................................................................... 45
5.6 FUTURE R!SK......................................................................................................................... 46
6.0 CASE STUDY: THE SECOND-GENERAT!ON (2G) D!G!TAL W!RELESS STANDARD SETT!NG PROCESS
!N THE UN!TED STATES................................................................................................................... 48
6.1 THE TECHNOLOGY................................................................................................................. 48
6.2 TECHNOLOGY SPONSORS: ER!CSSON AND QUALCONN........................................................... 52
6.3 TECHNOLOGY ADOPTERS AND OTHER !NFLUENCERS.............................................................. 54
6.3.1 The Service Providers ...................................................................................................... 56
6.3.2 How Service Providers Decide between Standards ............................................................. 57
6.3.3 Key Equipment Nanufacturers.......................................................................................... 59
6.3.+ Software Developers........................................................................................................ 60
6.+ !NFORNAT!ON SHAR!NG - ASPECTS OF NESSAGE, NED!A AND TARGET.................................. 60
6.+.1 Whom to influence .......................................................................................................... 60
6.+.2 How does it occur? .......................................................................................................... 61
6.+.3 When does it Occur?........................................................................................................ 63
6.5 EvENTS LEAD!NG UP TO THE STANDARDS CONTEST .............................................................. 63
6.6 THE AUCT!ON PROCESS !NST!GATES CHO!CE......................................................................... 66
6.7 CASE DETA!LS: !NFORNAT!ON SHAR!NG EvENTS CHRON!CLED ............................................. 67
6.7.1 Ericsson promotes GSN ................................................................................................... 67
6.7.2 Ericsson Wins Again with TDNA........................................................................................ 69

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6.7.3 TDNA Takes the Lead...................................................................................................... 70
6.7.+ Ericsson Signs up Support for both TDNA and GSN........................................................... 71
6.7.5 Qualcomm and CDNA...................................................................................................... 72
6.7.6 Qualcomm Spreads the Nessage ...................................................................................... 74
6.7.7 Support for CDNA Continues............................................................................................ 75
6.7.8 Who Won - Post 1996 ..................................................................................................... 76
7.0 RESULTS ................................................................................................................................... 79
7.1 PATTERNS !N THE DATA ........................................................................................................ 79
7.2 !NFORNAT!ON SHAR!NG -THREE S!GN!F!CANT ERAS ............................................................. 88
8.0 D!SCUSS!ON.............................................................................................................................. 98
9.0 THEORET!CAL !NPL!CAT!ONS .................................................................................................. 101
10.0 L!N!TAT!ONS OF THE STUDY ................................................................................................. 104
11.0 CONCLUS!ON......................................................................................................................... 106




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L!ST OF TABLES



Table 1. Comparison between broadcast and cascade information sharing .......................................... 28
Table 2. Key attributes of competing 2G standards ............................................................................ 52
Table 3. Characteristics of the technology sponsors ........................................................................... 54
Table +. Key criteria for technology adopters 1990-1995 .................................................................... 59
Table 5. !nformation sharing events - detailed version: Qualcomm promotes CDNA............................. 82
Table 6. !nformation sharing events - aggregated version: Qualcomm promotes CDNA........................ 84
Table 7. !nformation sharing events - detailed version: Ericsson promotes TDNA 8 GSN ..................... 85
Table 8. !nformation sharing events - aggregated version: Ericsson promotes TDNA 8 GSN................ 87
Table 9. Eras of information sharing events: Qualcomm promotes CDNA ............................................ 91
Table 10. Eras of information sharing events: Ericsson promotes TDNA 8 GSN ................................... 92



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L!ST OF F!GURES



Figure 1. The stages of standard development................................................................................... 15
Figure 2. Nodel of information sharing in a standards contest............................................................. 29
Figure 3. U.S. network operators - merger, acquisition, and joint venture activity: 1990-2000.............. 41
Figure +. Nanufacturers of mobile handset components ..................................................................... 44
Figure 5. 2G wireless standards: the stages of standard development ................................................. 51
Figure 6. Actors and their main relations during the 2G standards contest ........................................... 55
Figure 7. Technology sponsors and their key relationships.................................................................. 77
Figure 8. !ndicators of size and influence........................................................................................... 78
Figure 9. Stages of standard development and eras of information sharing.......................................... 90
Figure 10. !ncidence of cascade and broadcast information sharing .................................................... 93
Figure 11. Factors affecting the standards process............................................................................. 97



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1.0 THE SETT!NG OF TECHNOLOGY STANDARDS




Technology diffusion is a process whereby new innovations associated with products, processes, or
management techniques spread throughout a market or economy (Karshenas 8 Stoneman, 1995). The
spread of these new ideas can take several years or even decades. Since diffusion relies upon adopting
firms to gather information and learn about a new technology prior to adoption, communication of a
technology's attributes and benefits is essential to the overall process of diffusion. This communication is
primarily the role of technology sponsors but is also undertaken by early adopters as they attempt to
sway undecided participants by publicizing their decisions. Either way the flow of information from
sponsors to adopters either directly or through other industry participants is an influential action that
serves to impact both the speed and degree of adoption of a new technology.
The literature on technology diffusion has devoted very little attention to another process by which
technologies spread; standards contests. Standards contests occur when two or more firms are vying to
establish the market dominance of competing technologies to become a de facto market standard
(Shapiro 8 varian, 1999). Nost research into the factors that influence technology diffusion has focused
on characteristics of the technologies such as risks, returns, complexity, and intellectual property; and on
the characteristics of the adopting firms, such as their size, access to capital, expected returns from new
technologies, factor productivity, search costs, and input prices (Nansfield, 1968 8 1989; Romeo, 1977;
David, 1969 8 1991; Davies, 1979; Karshenas 8 Stoneman, 1993). There has been little research to
investigate the actions of technology sponsors as a central driver of technology diffusion, especially on
how the sharing of information influences the adoption behavior of key industry participants. This is
particularly crucial in a standards contest because the nature of competing technologies highlights the
process of information sharing.

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An industry standard is a set of specifications to which all elements of products, processes,
formats, or procedures under its jurisdiction must conform (Tassey, 2000). Standards can be selected
by a politically driven standards organization or accepted as de facto by the market. Standards contests
are an integral component of industries characterized by technological innovation and involve the
codification of an element of an industry's technology (Tassey, 2000). Technology standards have long
been important elements of market competition, because acquiring a dominant standard is a critical
determinant of a firm's long-term competitive position and success (Hill, 1997; Funk, 2003).
The sponsoring of a technical standard is an important strategic activity by the firm. Developing a
dominant standard involves large irrevocable commitments of resources, has an uncertain outcome that
is determined by a complex set of uncontrollable factors, and has an outcome with lasting consequences
for a firm. Standard setting is a collaborative activity among manufacturers, governments, and service
providers, who work in complex, interconnected, and dynamic environments (Leiponen, 2005).
Standard setting is a process of adoption and diffusion. The diffusion of an innovation involves
communicating characteristics of a new innovation to a group of potential adopters. As these parties
gain familiarity with the innovation and are persuaded of its benefits, they decide to adopt it. Both the
perceived attributes of an innovation and the type of innovation-decision í characteristics associated with
the environment, the nature of the communication channels that technology sponsors use to convey
information to potential adopters, and the extent of their overall efforts in diffusing the innovation í
affect the overall rate of adoption (Rogers, 1995). A new technical standard is an innovation that is
introduced and diffused into a society of potential users. The process of standard setting is a special kind
of diffusion, one that requires understanding the actions and distinctive nature of both adopters and
technology sponsors. Standard setting can take many years and involve complex and interrelated actions
and transfers of information by both sponsors and adopters. The cumulative effect of such actions usually
determines what standard prevails; rarely does one specific action or event determine the outcome.
What does it take to win a standards war? The industrial standards literature overwhelmingly
focuses on market share as the primary indicator of whether a standard has achieved dominance and
hence which firm has won the contest (Shapiro 8 varian, 1999; Katz 8 Shapiro, 1985; Farrell 8 Saloner,

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1985; Funk, 2003). This literature assumes that firm behavior and network externalities effect a single
standard's gaining dominance. However, when the technical capabilities of one standard are not
sufficient to satisfy the market, multiple standards can coexist for an extended period of time in a
standards contest. !n this case there are multiple winners, and even though market share remains a
determinant of success, it loses its importance in isolating one standard as a clear winner. Since a
standards contest can evolve over years, even decades, a single contest can go through periods when
multiple standards coexist and when a winner is or is not clearly recognizable.
How best to influence this process of standard setting is a strategic decision faced by many firms.
Certain strategic behaviors are critical for success, especially in industries characterized by intensive
capital investment and lock-in. Where network externalities are present, the number of users directly
affects the value of the technology, and obtaining a large market share early in a standards contest can
ensure dominance. Thus, first-mover advantage and attainment of critical size are recognized strategies
for obtaining a dominant standard (Lieberman 8 Nontgomery, 1988; Farrell 8 Saloner, 1986; Katz 8
Shapiro, 199+; Shapiro 8 varian, 1999). Public debates over a standard's technical and social factors are
another means a firm uses to influence the selection process of a technological standard (David, 1987).
These debates are an attempt to reduce the uncertainty associated with selecting the standard that
becomes pervasive and hence are also a method for a firm to influence adopters' choices. Strategic
alliances act as mechanisms for sharing knowledge and reducing the risk of innovative activity. They
can be undertaken by firms with the intent of influencing the outcome of a standards contest
(Rosenbloom 8 Cusumano, 1987; Rosenkopf 8 Tushman, 1998).
Since diffusion of a new innovation requires extensive communication of its attributes, the type of
information regarding a technical standard that adopters acquire can strongly influence their desire to
select a standard (Das 8 van de ven, 2000). Firms can and do share information about their technologies
in order to influence the adoption process. The type and timing of persuasion can determine a
technology sponsor's influence over key adopters. These adopters consist of other firms in the market,
standard bodies, and government departments. Technology sponsors seek to influence key adopters'
expectations before competing technologies have a chance to attract widespread support. This process

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must be initiated before either the technology or the market is fully developed. Sponsors risk losing the
battle by sharing information that cannot be rapidly factualized or by selecting a flawed target.
Prior research recognizes that communication is a critical requirement for diffusion of a new
technology, but few studies have investigated how communication í or more specifically, the process of
information sharing í affects the process of standard setting, that is, how the evolution of a technology
is linked to the type of message that a firm delivers and how this message can influence an adopter's
choice. Technology sponsors in a standards contest are caught between a need to display the benefits of
their technology in a timely manner to dissuade competition, and the risk of raising early expectations
that later become difficult to meet or unnecessary due to changes in the environment (Shapiro 8 varian,
1999). At the beginning of the information sharing process, adopters are uncertain about the technical
capabilities and marketability of the competing standards. !t is critical for technology sponsors to
communicate sufficient information regarding their standards to reduce this uncertainty and drive
adoption, without releasing so much information that competitors can leverage it. This is the essence of
an information sharing strategy: determining what type of information to share, how to share, with whom
to share, and the optimal timing of this sharing for influencing key adopters. Even though the standards
literature provides some insights into effective strategies to influence adoption in a standards contest, it
has focused on individual tactics, not on a series of actions that comprise a strategy and over time
influence the selection process. There remains room in the literature to improve our understanding of a
firm's standardization strategies; specifically how the communication of information delivered at different
time in the standards process influences the adoption of a new technology.
This study intends to provide insights into the information sharing process used by firms to
influence key adopters in a technical standards contest, primarily on the actions and events that occur in
a market-based or de-facto process. Standards contests that are market based involve two or more firms
vying for dominance (Shapiro 8 varian, 1999). This study also investigates how network externalities
can increase the significance of the outcome of the contest for all firms concerned. The extent of
network externalities' influence depends partly upon the value accrued in the installed base. Even though
the literature assumes that the presence of network externalities results in a single winning standard, the

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strength of the externality affects both the speed and the overall degree of dominance (Arthur, 1988;
Quelin, Abdessemed, Bonardi, 8 Durand, 2001).
At the beginning of a contest and at many other points along the way, it may be difficult for firms
to recognize that a single dominant standard will eventually emerge. Only as the competing technologies
adapt to the needs of the market, does it become increasingly transparent which standard will
subsequently dominate. Therefore adopters must overcome uncertainty by obtaining information in
order to lessen the risk of making the wrong selection.
These are the main questions that will be explored in this study: Do firms use distinctive strategies
for the sharing of information within a standards contest, and when do they use these strategies? Do
these strategies change as the standards contest evolves? !n addition ! provide some observations
regarding how characteristics of the firms and the technologies impact this process of information
sharing. The intention is to gain a greater understanding of how and when the strategic sharing of
information to potential adopters and competitors serves to influence the adoption of a technical
standard.
! have selected the telecommunications industry because it is one in which standards play an
important role. Standards battles are a key focus of competition in this industry, and the stakes
associated with supporting one standard over another are significant. !ncreased demand for global
communications via wireless devices, especially for data delivery, is creating the need for global
standards for inter-network compatibility. Greater complexity associated with both terminals and
infrastructure increases the requirement for common standards in the wireless arena.
Telecommunication standards tend to become entrenched due to the capital-intensive nature of the
network and the high R8D cost associated with standard development. All of these reasons, along with
the presence of network effects in this industry, generate dominant standards and serve to increase the
complexity and strategic value associated with the selection of a standard.
Since standard setting can be a time-intensive process with many influences, it is necessary to look
at sequences of actions to infer that a particular strategy for sharing information is being used. A single
information sharing event is insufficient to discern a firm's strategy for influencing adoption. Therefore !

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have selected a longitudinal case methodology to establish the influence of information sharing on
standard setting.
The case study will be based primarily on the events and activities evident within the second
generation (2G) digital wireless standards contest in the United States. This was primarily a market-
based standards process and offers an interesting comparison between technical standards that differ on
key strategic attributes like technical ability and market readiness. ! look for variation in both the
message associated with these characteristics and when it is delivered. Finally, this case offers an
instructive context since it already took place, allowing the end result of the strategies deployed to be
discerned through the contest's outcome. Even though the focus is on the American process, ! will also
include some aspects of the European 2G digital wireless standard setting process that impacted the U.S.
contest.
!n order to recognize distinctive information sharing strategies, their key elements need to be
identified. The literature on positive network externalities and standard setting suggest that ¨timing" is
crucial. Therefore, timing of technology sponsors' choosing to share information is of substantive interest
in this analysis. Das and van de ven (2000) suggest that the ¨target" of influence may include
organizations besides the ultimate technology users. Research on technology diffusion and networks
indicates that the choice of ¨message" and the ¨media" used to convey information are also important.
These literature streams contribute to the identification of important aspects associated with a firm's
information sharing strategy in a standards contest and are important to the development of a model that
attempts to more clearly define how and when firms share information.
The case study highlights the activities and events associated with two key firms: Ericsson, a
European manufacturer of telecom equipment and primary developer and sponsor of both the GSN and
TDNA digital wireless standards; and Qualcomm, a U.S. based manufacturer and sponsor of the CDNA
digital standard. Both firms actively participated in the 2
nd
generation (2G) standards contest in the
United States, and the majority of the data that will be assessed relates to activities and events visible in
a de-facto standards process. At the same time, certain events and actions that also occurred through
their interactions on standard setting committees are also of interest in this study because they affect the

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outcome. The development of 2G in the United States was somewhat intertwined with its development
elsewhere, which means that understanding the interactions of both Ericsson and Qualcomm with
network operators worldwide is necessary to assessing the impact of strategic information sharing on
standard selection for this market.
! use the literature to derive two distinctive information sharing strategies available to technology
sponsors, and predict when each strategy would be relied upon. Specifically, ! predict that firms will use
a cascade strategy early in a standards contest and will then shift to a broadcast strategy as the contest
evolves. This involves understanding when technology sponsors will share complex versus simple
information, when they target an entire community versus individual members, and when they use mass
media versus personal channels. ! extend the literature by using the types of information being shared,
to identify distinct eras within the standard setting process. Although the literature identifies distinct
stages of diffusion, during which the use of information sharing may influence adoption, it misses key
elements associated with when and how this information is shared. ! use the concept of eras to capture
important patterns in the information sharing strategies that firms use. ! also offer preliminary
observations on information strategies and their relationship to characteristics of firms and technologies.
! will begin by providing the relevant aspects of the communication of information evident within
the literature on technology diffusion, detailing the applicable facets of the standards literature, focusing
on firm actions in market based standards contests, and proffering pertinent features of the literature on
social network theories. This summation of relevant theory will explore how a firm's strategic behavior is
driven by timing, target of influence, message, and media. ! arrive at a model of strategic information
sharing that links stages in a technical standards process with tie strength and information content in
order to differentiate cascade, which exploits a firm's relationships, from broadcast, which relies upon the
use of mass media and other intermediaries. The focus of the model is information sharing within the
confines of a technical standards battle differentiated by the type of message communicated, the manner
in which it is delivered, and the timing associated with its release. Timing arises as the key component of
the model, especially as it relates to a standard setting process.

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2.0 REv!EW OF THE RELEvANT L!TERATURE




Three main bodies of literature are relevant to this study. First, the diffusion literature, with its focus on
the communication of an innovation's attributes and how the spread of messages impacts the speed and
the extent of diffusion throughout a community, provides the framework for this investigation into how
the sharing of information influences adoption. Second, the standards literature í especially portions
dealing with the importance of information sharing in managing adopters' expectations, how relationships
can be exploited to influence the standard process, and how the timing of certain tactics can affect the
outcome í are also pertinent to understanding how the elements of an information sharing strategy are
best sequenced. Finally, the literature on tie strength í since it reveals how a firm's position in a
network and the strength of its relationships influence its ability to exchange information í is also
applicable to developing a model of information sharing.
This literature review focuses on the content within each of these areas that provides insights into
market-based standards contests. !n particular, this literature suggests what the key elements of a
strategy are for a firm sharing information with the intent to influence potential adopters and other
organizations that play an important role in the selection of a technology standard. !t also suggests how
information can be most effectively communicated according to its characteristics.



2.1 THE CONNUN!CAT!ON OF D!FFUS!ON


The literature on technology diffusion is primarily concerned with the speed at which firms adopt new
technologies. !t investigates possible explanations for why one technology is adopted more quickly or
slowly than a competing technology, based on the individual choices of adopters and their perceptions of
the costs and benefits associated with a given innovation. The diffusion literature also explores how

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diffusion occurs through markets and the rational elements of adopters' choices. Diffusion models focus
on the information needs of adopters and assume they have limited information about a new technology
and that the diffusion of an adoption involves a process of information acquisition. Four factors influence
adoption: the innovation itself, the communication channels used to spread information about the
innovation, time, and the nature of the society to which it is introduced (Rogers, 1995).
The communication process is an important first step because the diffusion of information can
bring about recognition, interest, and potential for adoption. Efficient-choice models of diffusion assume
that firms adopt innovations based on information about their technical efficiency or profitability. The
diffusion literature holds different views regarding whether all firms in the market receive information
simultaneously, and if so, whether the information is complete or incomplete for all firms (Rosenkopf 8
Abrahamson, 1999). When a new technology is superior, it is assumed that all firms in a market will
rapidly adopt it. However, this is not always the case, perhaps because adopters vary in when they
become aware of the new technology and its benefits (Geroski, 2000).
The spread of information about a new technology is critical to determining both the rate and
degree of adoption. Therefore, the characteristics of a new technology and the degree to which adopters
are aware of and satisfied by the information they acquire determine the rate of adoption. The greater
the perceived relative advantage of a new technology, the more rapid will be its adoption. The more
compatible a technology is with the values and norms of the social system, the easier it will be for
adopters to accept it. !f adopters perceive the technology to be difficult to understand and use, this will
slow adoption. The extent to which adopters can experiment with a new technology also affects their
propensity to adopt, and if the benefits of a new technology are clearly observable, adoption will be more
rapid (Rogers, 1995). These characteristics relate to how well technology sponsors are able to effectively
communicate the benefits and advantages of their technology and to the timeliness of their sharing
important information with appropriate parties.
Recognizing that communication of information to a specified target in a timely manner is a
fundamental tenet to effective diffusion, ! extend this premise and apply it to a standard setting contest.
!n a standards contest, firms also acquire information about new technologies, and the quality and timing

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of delivery for this information has been recognized as critical to gaining a dominant standard. As with
the diffusion literature, many questions remain unanswered in the standards literature regarding the type
of information to be communicated, when to share this information, and the preferred methods of
delivery that will result in a bandwagon of support. The extended nature of a standards contest requires
technology sponsors to also understand how best to share this information throughout a series of actions
í beginning with activities associated with the conception of the technology and continuing into the
evolution of subsequent generations. !n essence, information sharing in a standards contest becomes a
strategic activity for a technology sponsor.



2.2 STRATEGY AS !T RELATES TO STANDARDS CONTESTS


Strategy has been defined as a coherent sequence of actions that have a clear set of objectives, even if
some aspects of the sequence, such as the precise timing of actions, is emergent (Nintzberg, 1996). !n
contrast, tactics are single events that affect a competitive dynamic. Distinctive strategies are thus
evident in different sequences of actions or in the patterns of actions taken over some time period (Das 8
van de ven, 2000). Strategy also involves making decisions about how best to allocate resources and on
what activities to direct capabilities in order to achieve superior performance. A fundamental tenet of
strategy is that the effective development and leveraging of technological know how often results in
superior market performance (Rosenbloom 8 Cusumano, 1987). Technical standards are central to
business strategy, and being accepted as the dominant standard in the market can go a long way toward
ensuring a firm's success. Having a successful technology standard involves more than the ability to
innovate; it requires an understanding of the complex social, political, and commercial interactions among
all interested parties that influence the outcome in the market (Leiponen, 2005).
Shapiro and varian (1999) is one of the few references in the standards literature that investigates
firm strategy and standards contests. The authors direct a portion of their analysis to the choices related
to compatibility among competing technologies. They classify standards battles according to whether
they involve evolutionary or revolutionary change. Evolution offers adopters an easy migration path,

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whereas revolution offers superior performance. Shapiro and varian identify key assets that are required
to win a standards war. What is not evident is how these key assets, each of which is merely a tactical
move a firm can employ, should be sequenced in order to form an effective strategy.
The process of standard setting can be influenced by many factors. Rarely can a single action or
event predicated by a firm, significantly alter the outcome of a standards contest. Even the literature on
positive feedback postulates a series of actions or events that eventually force the market to select or tip
towards one technology (Arthur, 1989). Committee membership, strategic alliances, co-operative
agreements, !PR (intellectual property rights), strategic alignment with complementary products, and
management of expectations are all mentioned in the literature as important strategic actions or tactics
that influence the standard setting process (Bekkers, Duyster, 8 verspagen, 2000; Cusumano, Nylonadis,
8 Rosenbloom, 1992; Hill, 1997; Dokko 8 Rosenkopf, 200+). All of these actions share a common
thread: the information that is shared among their various actors. The sharing of information through a
cooperative development agreement, to potential adopters in the market, or to potential manufacturers
of complementary products, is a significant part of the process that influences their choice. As with other
forces that influence standard setting, no single information-sharing event can be credited with industry
acceptance of a dominant standard, but a series of these information-sharing events can constitute an
effective strategy. Thus, information sharing can be considered as a key component of firms' strategy to
influence the market and establish their technology as the dominant standard.
Nuch of the literature on standards has identified tactics that firms use to affect the outcome of a
standards contest, but only a few studies have examined strategies. Elevating the focus of the standards
literature to a strategic level requires linking effective tactics in a cohesive sequence over time. While the
process of information sharing is a common thread that runs through much of the previous literature on
standard setting, it has not been adequately studied as a strategic action in is own right that can
influence key adopters expectations. !n this paper, ! link a series of information sharing events or actions
into a coherent strategy that is used by technology sponsors to influence key adopters and initiate the
adoption process.


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2.3 STANDARDS CONTESTS - KEY TACT!CS


Past research efforts have provided some guidance surrounding standards choices and how compatibility
between technologies, control of intellectual property, and the management of expectations through
information sharing can influence the outcome of a standards contest (Farrell 8 Saloner, 1985; Bekkers,
Duysters, 8 verspagen, 2002; Shapiro 8 varian, 1999). This literature recognizes the criticality of
information on the outcome of standard setting, but is primarily concerned with the tactical nature of how
this information is exploited by technology sponsors. The standards literature suggests that the timing of
certain actions can have a critical influence on the outcome of standards contests. First-mover
advantages, positive feedback, installed base, and network externalities are some of the concepts that
focus on how aspects of timing as it relates to the adoption of high technology products have been
discussed in the literature (Farrell 8 Saloner, 1986; Arthur, 1989; Katz 8 Shapiro, 199+; Shapiro 8 varian,
1999). First-mover advantages rest on the logic of preemption: build an early lead and reap the benefits
of positive feedback. They have been credited as a competitive tactic that results in the acquisition of an
early installed base and can lead to a technological standard's gaining market dominance. Positive
feedback is the process by which growth in an installed base of end users or the stock of complementary
products causes more users to adopt the same technology and more firms to develop complementary
hardware or software.
Network externalities exist when the value of a particular technology increases exponentially with
the number of users or with the availability of complementary hardware and software. Where strong
network externalities operate, the battle between competing, incompatible technologies is more intense
because only one can survive and dominate the market. This may accelerate the processes driving
adoption and diffusion of a technology. When network externalities are substantial, the decision of each
adopter influences others, and this further increases the pressure on technology sponsors to convey the
right message through the most effective channel to the appropriate targets. Thus, the strategic use of
information and the timing associated with its delivery becomes especially critical.

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This focus on critical mass, although a valuable component of standards theory, does not
sufficiently address situations where more than one technology continues to thrive. Recent work has
uncovered that although early obtainment of an installed base is an important strategic goal in standards
wars, the strength of a tie between firms can influence technology selection choice, even when a market
is tipping towards a different dominant standard (Suarez, 2005). This work suggests that markets may
not tip in favor of only one alternative. Adopters may choose the technology that prevails in their strong-
ties network.
This research extends the literature by addressing how a firm's network of ties affects its ability to
influence adoption. That tie strength matters is an important underlying principle of an information
sharing strategy. This research does not address how aspects of timing of delivery and message content
affect standards contests.
A variety of other actions have been suggested as useful for winning standard contests, including
forward pricing, co-opting key resources such as lead customers, and continual product improvement
(Shapiro 8 varian, 1999). Their common goal is to influence adopters' technology choice. Noreover,
except for product development, these actions seek to influence adopters' expectations and subjective
evaluations of a technology before its potential has been fully realized. This is critical for managing the
chicken and egg problem: the need of technology sponsors to build an installed base in order to
encourage other firms to develop complementary products for their platform, but at the same time foster
the development of complementary products in order to build their installed base (Grindley, 1990).
Timing has been recognized as an important aspect of standard setting, and timing of message
delivery in a standards contest can be intensified by the presence of network externalities. Nanaging the
expectations of key adopters is an important tool that technology sponsors can use to influence the
outcome of a standards contest. !n many cases, this process of managing expectations occurs long
before the standard is market ready, forcing technology sponsors to share information regarding the
anticipated benefits of the technology. Selecting adopters that are predisposed to certain technical
abilities of a standard is an important aspect of obtaining early support.


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2.+ L!NKAGE BETWEEN T!N!NG AND STANDARD DEvELOPNENT


Throughout the literature on standards contests, the issue of timing surfaces as an important element of
an information sharing strategy. The literature identifies the forces that drive adoption and diffusion,
while conveying how the aspects of the message, the choice of media, and the level of diversity
associated with the target of influence impact key adopters' choices. Even though the literature covered
thus far has offered some interesting revelations regarding certain aspects of an information sharing
strategy, it doesn't address whether firms use distinctive strategies to share information or when they
might do so. To gain further insight into these questions, ! have selected a model from the literature on
standard setting and technology diffusion that identifies the stages of diffusion and technology
development (Bekkers, 2001). This model is ideally suited to this task because it was initially developed
to identify the life cycle associated with development of a wireless technical standard. !t was also based
on the diffusion of innovations defined in Rogers (1995). The differences in technical capabilities of a
standard and those associated with adopters' needs across three stages offers some insight into how
information can be used most effectively within each stage and provides some structure to the timing
associated with when firms should engage in different aspects of an information sharing strategy. The
literature on competitive response timing also offers some insight into this aspect of timing.
Building on the work of Rogers (1995), Bekkers (2001) defines a three-stage standard development
process that links the information content that firms should share, with how it should be timed. Bekkers'
model consists of three phases: the development phase, where technology and other means are
developed through the work of different actors focusing on the technical, economic, and strategic
requirements; the adoption phase, where initial actors embrace the standard, !PR issues arise, and any
formalized approval process occurs; and the diffusion phase, where the standard is selected by a wider
group of actors and infrastructure is deployed. (See Figure 1.) This model displays how the information
that the technology sponsor must convey, changes over time and how this information can drive adoption
decisions.

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!n a standards setting contest or process, the critical window for influencing adopters, especially
key adopters, immediately follows initial technical design and extends into the adoption phase. The
standards advocate should consider the unique needs of all relevant users in determining whom to
contact, when to initiate this action, and what type of information to reveal. Since many technical,
economic, and strategic design issues remain undecided, the use of strong or direct ties will manage the
complexity of the message content. Standard sponsors will exploit their relationships to convey the
anticipated benefits of the standard to early or key adopters. These key adopters will be selected on the
basis of their needs' closely aligning with those of the technology sponsor and on the strength of the
relationship. Contact will be made via boundary spanners that function in technical or industry
committees, through direct and in-direct alliances, or on the basis of past relationships.


Source: Bekkers, Rudi, ¨Nobile Telecommunications Standards - GSN, UNTS, TETRA, and ERNES",
Figure 1. The stages of standard development
Development
Adoption
Diffusion
•Early technical research
•Technical, economic and strategic design issues
•Decision process for basic technical properties
•Initial support from key adopters
•Supporting measures from community at large
•Infrastructure development and procurement
•Equipment development and type approval issues
•Intellectual property rights issues •Infrastructure deployed
•Supply market structure
•Standard upgrading


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As the adoption phase winds down, the first round of significant actors will have selected a
standard and their decisions are affecting the second round of actors or adopters. As the technical
properties of the standard become well defined, the sponsor's message simplifies to conveying the
standard's capabilities and the support it has already gathered from key adopters. Finally, as the
diffusion phase begins, all relevant actors have chosen a standard and are in the process of deployment.
Here the actors publicly justify their standard. This activity has two purposes: to help the standard
become established and to begin posturing for the standards contest that's anticipated for the next
generation technology.
Technology sponsors share information to encourage adopters to select their technology over
competing options. Timing this stimulus is critical; the sooner a response is garnered, the more rapidly
the bandwagon effect can be initiated, but premature support may misdirect the eventual outcome of the
standards contest. Speed of response can be a function of the characteristics of the technology sponsor;
the information sharing action it applies; the channel selected for delivery; the degree of noise or
uncertainty in the environment; and the ability of the responder to sense that an action has occurred,
evaluate the message delivered, and decide upon a response (Smith 8 Grimm, 1991). Among direct
competitors, a firm that initiates an action is seeking to delay a competitive response for as long as
possible. !n a standard setting process, the technology sponsor seeks to balance the speed of response
to optimally capture the most support.
A firm's prior reputation is linked to its credibility in an industry. A strong reputation leads to a
higher degree of visibility in the marketplace and provides key adopters with more information about the
actions of technology sponsors. A firm with a strong reputation will need to invest less time in sharing
information regarding its abilities because it will have a greater degree of credibility among adopters.
Radical technologies require more information gathering by adopters because their costs and benefits
may not be analogous to those of known technologies. Technology sponsors should be concerned with
the degree of visibility their technology has in the market. The more visible the aspects of the

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technology, the less information adopters require in their selection process. Therefore a technology
sponsor that can publicize the benefits of its technology can rapidly influence adopters.
Adopters will be inclined to display their commitment to a technology through public
announcements of their support. These displays of approval for one technology over another are
valuable in influencing other adopters, but public announcements of deployment of infrastructure carry
more weight because they involve financial commitment. Speed of response is also predicated on the
type of channel or medium a firm selects. Generally, mass media can solicit a faster response, since they
are able to pass large amounts of information quickly to a wide variety of interested parties. However,
this may not be the case when a radical technology is involved, due to the ambiguity of the information
that needs to be transferred. Since noise and uncertainty can affect an adopter's ability to process
information and thus impact the speed of adoption, technology sponsors may choose to add noise and
uncertainty depending upon how radical their technology is in comparison to competitors'. Overall, the
literature on competitive response supports the premise that firms use information sharing strategies to
manage the speed of competitive response. !t seems logical to extend this premise to conclude that
information sharing strategies would benefit technology sponsors in standards contests and that firms
can therefore be expected to exploit the various aspects of information sharing that will influence key
adopters in a timely fashion.
! propose that the optimal strategy for sharing information is dependant upon the stage of the
standard's development, the type of relationships or ties that a firm has access to, the complexity of the
information that needs to be communicated, and the end user characteristics. To assure long-term
success in a market, information sharing strategies also need to accelerate user adoption without ceding
too much control over a firm's technology to competitors. !n addition, a firm's information sharing
strategy should consider the effect of its reputation and the nature of its technology. The stronger the
reputation of a technology sponsor, the less information it must share regarding its abilities. The more
radical its technology, the more information it will need to share via personal relationships, if it desires
rapid adoption. !njecting noise and confusion into the environment may serve to slow down the adoption
process of a radical technology and thus might become part of a strategy for a firm that is representing

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an evolutionary technology. ! examine several considerations behind the selection and sequencing of
elements within an information sharing strategy. These include the following: the entities that ultimately
determine technology selection, those entities' criteria, and the most effective method to deliver
information to them.



2.5 THE PROCESSES THROUGH WH!CH STANDARDS ARE ESTABL!SHED PLAY A ROLE !N DETERN!N!NG
NESSAGE CHARACTER!ST!CS AND NED!A CHO!CE

Three distinctive forces drive adoption or diffusion and hence the standard selection process: (1)
authority - government bodies or cooperative industry committees that impose their choice on the
market, (2) market or rational choice - selection of technology as an outcome of the cumulative choices
of individual adopters, and (3) social mechanisms - choice of technologies can only be partially described
as rational; the costs and benefits are complex, uncertain, and evolving; and the criteria by which
technical characteristics ought to be evaluated are based on social mechanisms. These forces are not
isolated from each other, and multiple forces can combine to drive adoption in a standards contest.
Therefore the process of standard selection is influenced by many actors within an industry, and the
outcomes of many standards contests are not determined by technical merits alone. Delivering
information with the intent to influence these different actors can require different message content and
communication channels or media. A firm's information-sharing strategy should consider the influence of
authority, rational choice, and social influences on the process of adoption.

2.5.1 The Committee Process

!nstitutions such as professional societies, trade associations, and standards bodies provide an essential
coordination function for technological innovation (Farrell 8 Saloner, 1986; Tushman 8 Rosenkopf, 1992).
They provide venues to share technical information, adjudicate technical differences, and select
standards (Rosenkopf 8 George, 2001). Firms that participate in these forums benefit by gaining access
to and control of technical and strategic information. At the same time, they risk losing proprietary

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information to competitors. !t is notoriously difficult to obtain agreement in these industry associations
and standards bodies due to the presence of multiple competing interest groups (Grindley, 1990).
Das and van de ven (2000) characterize this type of standard setting process as institutional and
outline a strategy regarding how firms function under these conditions. This strategy recognizes the
presence and influence of firms, consumers, distributors, and regulators. !t suggests that selection is
based on how technologies perform under both technical and non-technical criteria, and that the criteria
for evaluating alternative technologies may not initially exist but are constructed through the interaction
of the participants. This type of selection process increases the complexity of information sharing, due to
the inclusion of varied interest groups. When diverse interest groups or institutional actors have an
important influence on technology selection, these entities are more likely to be persuaded by direct and
tailored communications, as their evaluation demands they weigh the requirements of multiple
stakeholders, which makes it harder to rely on "objective" assessments of technical performance. These
actors may expect greater accommodation from technology sponsors as the technology evolves, and
such promises can only be made through relationships. When the selection criteria widen beyond
technical considerations to include political influences, the benefit of personal contact increases and the
effectiveness of simultaneous contact is diminished. This is analogous to the concept that a firm able to
pursue strategies to influence this institutional process in favor of its own technology can increase its own
innovative performance. Spencer (2003) suggests that when a firm shares technological information
about an innovation with external contacts, it can shape the technological and evaluation standards and
direct the industry-wide discussion concerning the advancement of their technology. !t can also attract
other innovators to its technological trajectory and thus form a critical mass of firms with a vested
interest in the success of their technology.
When the standard setting process is authoritative, it is characterized by the sharing of both
technical and strategic information between key actors. The presence of multiple interest groups
complicates the content and the delivery of this information. An information sharing method that enables
personal contact is preferred in this environment, since in many cases the message delivered to the

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target of influence is unique. An information sharing strategy must take into consideration how the
target of influence shapes the content of the message.

2.5.2 The Narket Process

Often a particular standard becomes de facto for a particular market or industry, when individual firms or
coalitions of firms successfully preempt competing technologies. These alternative technologies compete
until one standard gains sufficient market support to tip the market in its favor and create the
bandwagon effect that leads to its dominance (Tassey, 2000). Recent standards contests that unfolded
in this manner include video recording formats, audio taping, audio compact discs, video discs, computer
operating systems, spreadsheets, word processors, and telecommunication protocols (Liebowitz 8
Nargolis, 1995). A complicated and serious issue associated with market-based standard selection is
convincing users to adopt the standard before it is proven. !n the critical early stages, decisions are
based on expectation of who will win. !t is important for technology sponsors to influence these
expectations and establish the credibility of the standard. various elements affect the attainment of
credibility: technical capability, manufacturing capacity, financial backing, availability of complements,
and ownership of essential !PR (Grindley, 1990; Bekkers, Duysters, 8 verspagen, 2002). Technology
sponsors must time the delivery of information associated with these elements and ensure a fit between
message content and media choice.
An excess of information is available to firms in today's marketplace. Firms filter the content of the
information for knowledge regarding the technical and marketing aspects of the standard that apply to
their particular requirements. !nnovation-decision process theory (Rogers, 1995) suggests a set of
criteria important to the successful diffusion of a new innovation. The theory is based on time and five
distinct stages. The first stage is knowledge. Potential adopters must first learn about the innovation
and be persuaded as to its merits (Rogers, 1995). This stage entails seeking one or more of three types
of knowledge about the innovation: awareness knowledge - that an innovation exists, how-to knowledge
- how to use an innovation properly, and principles knowledge - the fundamentals of how the innovation

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works. Each type of knowledge should be delivered via a form of media that is ideally suited to the
characteristics of the message.
The knowledge stage of the process is where the different characteristics of the message impact
the rate of adoption. The message describes the context or intent being communicated. The degree of
observability and complexity associated with the message determine not only which media is the most
effective at communicating the intended message, but the pace of communication. Awareness
knowledge can be fairly straightforward to communicate, as long as the awareness is directed at a large
community of potential users. The difficulty in communicating awareness knowledge increases as the
target becomes narrower. This alters the choice of media or communication channel. How-to
knowledge and principles knowledge generally increase the degree of message complexity and alter the
choice of media for message delivery. These are important considerations for technology sponsors in the
design of their information sharing strategies.
The next two stages of the innovation-decision process are persuasion and decision to adopt.
Potential adopters, after becoming aware of the technical standard, must be persuaded of its merits and
influenced to select it over competing standards. This persuasion consists of information that references
the aspects of the standards that make it credible. Such information can be applied through direct face-
to-face contact or through a variety of indirect influences. These may include advertisements, industry
speeches, committee relationships, and market and technical trial results. Technology sponsors must
develop the right mix of compelling messages and apply effective communication channels to achieve
their goal of influencing key adopters. The final two stages, implementation and confirmation of decision
choice, are outside the boundaries of this study.
!n a market-based process, information reaches potential adopters either directly from technology
sponsors or through intermediaries. The information itself or the content of the message has different
characteristics depending upon the technology's stage of development; its content ranges from highly
complex technical information that can be difficult to share, to simplistic awareness knowledge. Thus, an
information sharing strategy for prompting markets to decide must consider how the message content is
linked to the choice of media.

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2.5.3 The Process Of Social !nfluence

There has been a growing interest in exploring the influence that social mechanisms like alliances and
relationships have on the outcome of a standards war (Dokko 8 Rosenkopf, 200+; Rosenkopf, Netiu, 8
George, 2001). Alliances and cooperative agreements are used to share the cost of technical
development and spread the risk associated with developing a standard. The process of developing
these cooperative agreements involves the sharing of information related to the technical standard, and
the relationships that develop in conjunction with this information sharing can be very influential in
convincing adopters to prefer one technology over another (Bekkers, Duysters, 8 verspagen, 2002; Hill,
1997). These relationships can act as conduits for the purpose of information sharing, and developing a
set of influential alliance partners can ensure the successful adoption of a standard. When and how
much to share are critical questions.
This avenue of research has also reached the domain of social capital or social network theories.
Dokko and Rosenkopf (200+) examined the role that technical standards setting committees have on the
creation of social capital both at the firm and by the individual. Their focus is on the connection between
individual activity within these committees and firm-level outcomes in the standards setting process.
They conclude that individual relationships are significant in influencing the process and that hiring
connected individuals can increase the firm's influence over standards setting. But these explanations fail
to address the timing of the leveraging of these relationships in relation to the stages of standard
development or how message content in conjunction with choice of media impacts adoption.
Characteristics of the message and the degree of uncertainty that adopters face also influence
what media are best. Nedia richness theory, derived from the communications literature, is based on the
premise that commonly used media in organizations work better for certain tasks than for others (Daft 8
Lengel, 1986). Specifically, written media is preferred for unequivocal messages while face-to-face
contact is preferred for messages containing equivocality, where equivocality refers to the extent of
ambiguity involved in the message. Thus, rich media is generally defined as multi-channel, synchronous
communication with wide language variety and high personal focus. Lean media, which is normally

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asynchronous and single channel, is best suited for the transfer of known facts or response to specific
requests. This classification relates to the literature on social networks, which premises the concept of tie
strength on the amount of contact that occurs among a network of individuals and on the quality of the
exchange.
Since the type of relationships that a technology sponsor has access to can affect its ability to
influence key adopters, a more detailed understanding is needed of how these relationships can be
optimized within an information sharing strategy. Bouty (2000) suggests that informal exchanges across
organizational boundaries offer major learning opportunities and can influence innovation. The strength
of the relationship and the degree of direct competition between firms influences the propensity for an
exchange of information to take place. A stronger relationship can develop and exist between
structurally equivalent actors. Therefore the position that firms occupy in their networks of relationships
affects their ability to share information. The information about a technology can be acquired by
adopters directly from the technology sponsor through its promotional literature, from other adopters
through a sharing of experiences, or indirectly through an intermediary. A range of intermediaries such
as suppliers, journalists, consultants, and trainers popularize the proposed purposes of the technology
and thus influence users' understanding of it (Orlikowski et al., 1995). Firms engaging in an information
sharing strategy must distinguish between direct competitors and those firms with which they are able to
build a relationship that can support the delivery of their message.
Social network analysis takes as its unit of analysis the exchange of resources between actors.
Each kind of exchange is considered a social network relation, and individuals who maintain relations are
said to maintain a tie. A fundamental principle in social network theory is that a network is comprised of
different densities and that ties can be classified as strong versus weak and direct versus indirect (Ahuja,
2000). Social network studies have identified several ways to distinguish a weaker tie from a stronger
one. Tie strength between pairs of actors can vary from weak to strong, for example, from acquaintance
to friend to close friend or from co-worker to teammate. Weakly tied pairs engage in fewer, less intimate
exchanges and share fewer types of information and support than those who report stronger

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relationships. Strong ties involve a higher level of intimacy, more self-disclosure, emotional as well as
instrumental exchanges, reciprocity in exchanges, and more frequent interaction.
Each type of tie is characterized by different costs to sustain and is structured to transfer certain
types of knowledge or information. Rich qualitative content or information that requires interaction is
best communicated through a direct contact or strong tie, whereas lean or simple context that does not
require feedback can efficiently utilize a weak tie (Norabitio 8 Stohr, 2003; Hansen, 1999). Strength of
tie is typically measured through frequency of contact, although it may also be characterized by the
degree of intimacy or emotional intensity (Granovetter, 1973). Rich messages enable multiple cues and
rapid feedback. Strong ties allow for face-to-face contact and are thus the only way to discern visual
cues. They can be used to deliver complex information and are useful when issues are uncertain or
ambiguous. Weak ties, on the other hand, rarely rely upon face-to-face contact. They are best used for
the transfer of less ambiguous or routine information (Daft 8 Lengel, 1986).
The social process associated with standard setting is premised on the various methods for the
delivery of information through relationships. The social relationships that form through a variety of
different mechanisms offer a conduit for message delivery. The literature on tie strength offers insights
that assist in understanding how message content can be linked to a technology sponsor's choice of
media or channel. An information sharing strategy that is sufficiently robust to effectively function across
a variety of standard setting processes should recognize how message content is affected by the target
of influence and the stage of technological development. !t must also consider how the message content
is most effectively linked to the choice of media or channel for message delivery.
Three primary factors drive adoption and diffusion in a standards contest: those derived through
the authority of formal standard bodies and industry committees; the decisions of adopters rationally
operating in a market based structure; and the social mechanisms associated with networks,
relationships, and alliances. The process of standard selection is influenced by many actors within the
industry. The requirements of each of these groups of actors differ in the manner and type of
information necessary for its own evaluation of competing technologies. When selection is based on how
technologies perform on both technical and non-technical factors, this increases the complexity of

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information sharing for technology sponsors and qualifies the content of the message to be delivered.
Establishing the credibility of a standard is important when a technology sponsor must influence key
adopters prior to the finalization of a technology. Understanding the balance between timing of delivery
and message content is a significant aspect of communicating this credibility to the market. Alliances and
networks form the basis of many relationships that exist among standard sponsors, manufacturers, and
adopters. These relationships can act as conduits for the delivery of information and contribute
significantly to the process of standard setting.
The choice of media used to deliver a message is of great import in an information sharing
strategy. Tie strength provides a backbone for linking message type to media choice. Complex or
potentially ambiguous messages are best delivered via direct or strong ties. Simple, direct messages are
usually best delivered via indirect or weak ties, to optimize a firm's resources. Technology sponsors must
weigh the benefits of various channels against message content because selecting a channel that hinders
adopters' abilities to acquire timely information about a technology could impact their adoption choice.
Selecting the ideal combination of message and media and instigating the information sharing process in
a timely manner is an important strategic undertaking for the firm.


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3.0 BU!LD!NG THE NODEL




3.1 !NFORNAT!ON SHAR!NG STRATEG!ES: BROADCAST AND CASCADE


!n this paper, ! will examine two specific information-sharing strategies firms can use: broadcast or
cascade, and suggest how their efficacy varies with characteristics of the technology, the firm and the
environment. The concept of an information cascade is drawn from the economic literature and pertains
to situations where decision makers with private and incomplete information make public decisions in
sequence. Hence, the first few decision makers reveal their information and subsequent decision makers
follow their lead. !n this way the actions of a few influence the choices of many. Firms using a cascade
information sharing strategy focus on closed communications with a few central adopters andfor
developers, in an effort to leverage their ties to the rest of the community. Geroski (2000) describes an
information cascade as involving communication directed at pioneer users in an attempt to "legitimize the
innovation." Once that occurs, an epidemic or information cascade drives subsequent adoption and the
bandwagon effect. Geroski identifies three phases in a diffusion process characterized by information
cascades: an initial choice between technologies, lock-in to one technology and a bandwagon induced by
imitation. He suggests that the lock-in to one technology over another is driven in part by information
available in the selection process and network externalities. But there are many reasons for a firm to
choose one technology over another, and none of them are easy to isolate. The technology chosen
might suit adopters' needs better or it might be less costly. !nformation about the technology might have
been diffused more effectively or the infrastructure to support it might be more effectively organized. The
premise that ! am interested in exploring regards how the effective diffusion of information affects
adoption. ! will explore the actions by technology sponsors that influence adopters' initial choice of
technology.

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!nformation cascades rely heavily upon a firm's relationships for the sharing of information. Here
the firm is interested in transferring complex information directly between individuals via a strong tie
when the message content is tacit or complex. !t seeks to leverage its ties with the community at large,
in the hope of swaying the critical few required to influence the process of choice. When the firm is able
to directly supply information about the technology's benefits and intended use to potential end users, it
will have a greater degree of control over the message that is communicated and the process that is
used. Trade associations, technical committees and alliances are vehicles through which technology
sponsors can reach central adopters or developers.
A key characteristic of a broadcast strategy is that the firm relies upon intermediaries to convey its
intended message, yielding control over the process by which users are influenced to adopt its
technology. Firms employing a broadcast strategy primarily seek to communicate a standard simple
message to the entire community via a weak tie. Since identification of a tie requires an exchange of
resources, the question arises of how a broadcast strategy that primarily consists of one-way information
flows can be characterized by tie strength. The answer involves the presence of intermediaries. A weak
tie exists between the technology sponsor and an array of media contacts. These contacts are loosely
maintained between a firm's public relations department, and industry reporters and business editors.
Contact is predominately via telephone or e-mail and typically occurs infrequently. Either the firm or the
intermediary can instigate the process of information sharing. !n this instance, mass media is the tool
that the technology sponsor uses to communicate a consistent message to both competitors and the
market. Here the firm releases information about the benefits of a particular technological standard in
the hope of swaying competitors or the market away from competing technologies.
Signaling is another method that the firm can utilize to shape expectations about the future of the
technology. The concept of signaling, like response timing, is derived from the literature on competitive
response (Schilling, 2003; Heil 8 Robertson, 1991). Even though the focus of signaling is on controlling
competitive behavior, it may also apply to managing adopters' expectations in a standards contest.
When a signal is deliberate, it can benefit technology adopters by indicating their intentions regarding the
development or refinement of a technology and by communicating a commitment to the lifelong support

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of a technology. Thus sharing information of this nature supports its credibility and may influence
adopters' selection. Similarly, the presence of complementary products can act as a signal that a
technology has the support required to avoid stranded investment. The firm's reputation in prior markets
may also send a signal about its likelihood of success in a standards contest. Table 1 compares
broadcast and cascade information sharing based on the literature.


Table 1. Comparison between broadcast and cascade information sharing

Attribute

Broadcast

Cascade

Nessage

Simple and standard

Complex and unique

Nedium

Nass media via weak tie

Leveraged relationships via strong ties

Target

Entire community

!ndividuals, small groups, single firms

Timing

Adoption and diffusion phases

Development and adoption phases




3.2 A NODEL FOR !NFORNAT!ON SHAR!NG !N A TECHN!CAL STANDARDS SETT!NG PROCESS


The model in Figure 2 integrates the relevant bodies of literature into a succinct and usable framework
for determining when firms are apt to select either a broadcast or cascade information sharing action as
part of their overall strategy in a standards contest. Both timing and message content are critical
determinants of the type of information sharing that a firm selects. The phase of a standards
development is the primary determinant of message type and thus complexity. !n turn, message
complexity and message content are inherently linked and influence whether cascade or broadcast is
employed. A standards contest characterized by network effects is consistently based on influencing key
adopters. These adopters differ regarding the criteria they apply for standard selection, with the
presence of multiple user groups typically increasing the unique nature of the message to be delivered
while users with homogenous needs can be offered a simple and clear message.

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Note: The difference in thickness of lines connecting the phases to the content boxes depicts the amount of this type of
information sharing. The characteristics of a given adopter impact the type of information that a technology sponsor delivers. The
decisions of key adopters affect the content of ongoing information to be shared and the choice of media for sharing throughout the
entire standards contest.
Figure 2. Nodel of information sharing in a standards contest



Cascade information sharing is characterized by the delivery of complex and interactive message
content and generally involves the delivery of how-to knowledge and principles knowledge. The message
consists of rich qualitative information and relies upon the use of verbal and non-verbal cues. Since
personal contact is necessary but costly and time restrictive, the process of cascading information
maintains the personal contact required for a select group of early adopters but also allows for the
message to be delivered to multiple users later on in the process. This type of information sharing
should be seen to transpire over a strong or direct tie, which is also more effective for sharing
information about radical technologies and when adopter's choices are irreversible.
Broadcast, unlike cascade, functions more like cable delivery onto a television set, with delivery of
content occurring on a one-way channel or via intermediaries. The message is less complex and requires
little if any immediate interaction. Awareness knowledge is an example of a message that potentially fits
Rich content
Lean content
Key
Adopters
Development
Phase
Adoption
Phase
Diffusion
Phase
Strong tie
Weak tie
Cascade
Broadcast
The decisions
of key adopters

7f25f2006
30
this criterion, where a simple and straightforward message can be used to notify a community of users
that a new technical standard is available. Large investments in a developing technology or network
infrastructure signal commitment to the marketplace and reduce the risk that a different technology
might attain dominance. A strong reputation can also assist in influencing adopters' expectations
regarding a technology sponsor's ability to bring a developing technology to market readiness. Broadcast
information sharing is expected to primarily occur through an indirect or weak tie.
When it is beneficial to communicate a simple, standard message that requires minimal interaction,
it is advantageous to broadcast that message to the community at large, using a weak tie. When the
firm needs to communicate a complex message that's tailored to the receiver, it can rely upon strong ties
and a cascade information sharing strategy, which targets a small group of users who in turn influence
others. This mirrors Granovetter's concept of crucial bridges that exist within a network. These bridges
exist between weak ties but are important in transferring information to and from distant parts of the
social system. !n a standards contest, once a particular standard gains a few key adopters, this
influences others within the network to also consider selecting this standard over another, resulting in the
broad-based support that creates momentum for a technology (Wade 1995).
The development phase requires the transfer of a high degree of complex or rich information. This
is best managed over a strong or direct tie via a cascade information sharing strategy. This trend
continues into the adoption phase where we see a higher degree of rich, complex information being
transferred between actors, but the amount of lean, simple information also increases. Finally, as we
enter the diffusion phase, almost all the information related to the standard selection process is simple or
lean, and firms employ broadcast information sharing to communicate these messages.
Proposition #1: Technology sponsors engaged in a standards contest will rely more heavily on the use of
cascade information sharing when the technical standard remains in its development phase.
Proposition #2: Technology sponsors engaged in a standards contest will rely more heavily on the use of
broadcast information sharing when the technical standard has moved into the adoption phase.

Since the presence of multiple interest groups in a standards contest increases the probability that
key adopters will have unique requirements, the message to be delivered to this type of community will

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31
typically be complex and ambiguous. This increase in complexity will occur no matter the phase of
standard setting and will therefore reinforce the amount of cascade information sharing evident within all
three phases. Therefore the characteristics of the target of influence also determine the more
appropriate information sharing method. Conversely, when user needs are homogenous and key
adopters are primarily concerned with technical abilities of the standard, technology sponsors may use
more broadcast information sharing. Once again, this occurrence is not dependent upon the phase of
standard selection but will influence all phases of the standard setting process.
Both timing and message content are critical determinants of the type of information sharing that a
firm selects. Each stage within the standards setting process is characterized by its own unique
information that technology sponsors share to influence adoption. The point in time and the content of
the information to be shared, along with the individual attributes of the target, determine whether the
appropriate method of delivery is broadcast or cascade. The selection and sequencing of multiple
information sharing elements forms the basis of an information sharing strategy.

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32



+.0 NETHODOLOGY




This analysis focuses on the standards contest for 2G digital wireless in the United States. ! selected this
battle due to the following reasons: the dominant standard evolved through a competitive standard
setting process, a sufficient amount of time has passed to allow for access to the complete standards
process, and there exists sufficient media coverage of the entire process to ensure that multiple sources
of data are available for analysis. Since standards are a prominent aspect of wireless telecommunications
and the presence of network externalities increases the significance of the technology selection, the
degree of overall firm involvement in this process is high.
! selected a case study methodology because understanding the impact of information-sharing
events and activities on the outcome of a standards battle requires analyzing the entire process that a
technological standard undergoes in order to gain market dominance. Through examination of the
standards development process from initial development to infrastructure deployment, ! looked for
sequences of actions and events that might indicate which strategies were most successful.
i
The wireless
industry is characterized by technical and market complexity. Nultiple players, fragmented technology,
and diverse user needs all increase the number of contingencies that should be considered by a firm
wishing to influence technical standards setting. Therefore, the decisions and actions of firms are best
understood and analyzed within a qualitative study that allows for in-depth analysis and an understanding
of the events in a real-life context. Due to this inherent complexity within the environment, ! not only
will look for evidence to assess the propositions derived from the literature but will seek other aspects of
firm strategies for influencing standards contests that the literature does not currently address.
Since the strategies associated with information sharing can only be inferred from sequences of
actions and outcomes, qualitative research is ideally suited to this undertaking í it is concerned primarily
with the underlying process, meaning, and understanding of a particular situation (Creswell, 199+). !t

7f25f2006
33
allows for the interpretation required to uncover all of the relevant information. A longitudinal case study
is particularly suited to this type of research because its primary purpose is to analyze one research entity
at multiple points in time or through a temporal sequence of events where the researcher is seeking to
establish that a given effect is outside normal fluctuations within a time series (Jensen 8 Rodgers, 2001).
This research studies and documents events that unfolded over a 10-year period. ! utilize a single-case
design with the focus on events and actions of multiple firms within a single industry, focusing on the
information-sharing actions between two primary technology sponsors and the body of potential
adopters. The unit of analysis is the firm, and my interest is directed at the actions firms undertook
through their sharing of information to influence the outcome of a technical standards process.
The time period of interest begins in the early 80s in the European community and extends until
1997 in the United States. This is when the majority of network operators had chosen a 2G standard,
and manufacturers had determined their own level of support. Although the case study focuses on the
standard contest in the American market for 2G, it seems important to include certain aspects of the
European standard setting process for 2G because the firms involved in digital wireless operate on a
global scale and occurrences within the European situation impact events and actions taken in the United
States.
To identify the information sharing strategies, understand their patterns of change, and document
the outcomes specifically enabled by information sharing, ! needed an in-depth view of the actions and
events along with the context in which they occurred. Therefore this process began with an extensive
web search to familiarize myself with the 2G standard setting process. This enabled me to identify the
group of key actors and relevant terminology that supported my data collection process. This web search
also provided the raw data to determine the time horizon for the study. To guide data collection and
assessment, ! developed a series of research questions based on theory that identified the study's
research objectives; identification of firms' information sharing strategies and determining their impact on
adoption. These questions were used in the collection and categorization of the study data. Yin (1989)
refers to this as a "case study protocol."


7f25f2006
34

+.1 DATA COLLECT!ON


! collected data over two main time periods: Nay through November 200+ and July through September
2005. Using the key search terms ! had already identified, ! began the search for articles, books, and
analyst reports that dealt with 2G wireless during the 16-year period ! designated for the study: 1982
through 1998. !nitially, ! assessed the relevancy of an article based on its title. This located 1+8 relevant
articles, books, and analyst reports. After reading through each article in its entirety, ! reduced these to
59 that reflected information specifically on the 2G standard setting process and relevant actions
undertaken by any of the main actors. Nany of the articles ! discarded, either dealt with highly technical
standards issues or were irrelevant to the information-sharing actions of firms. From these 59 sources, !
extracted 80 quotes, comments, or statements that displayed evidence of information sharing between
key actors. These formed the basis of my initial data set.
The data either were located from direct actions that can be identified and labeled as part of an
information sharing strategy or emerged from a process or series of activities undertaken by a firm.
These include press releases that espouse a standard's benefits or identify commitment from a service
operator or manufacturer, evidence of active participation in a standards setting committee or meetings
where the discussion involved a technical standard, signs of visible commitment to a particular standard
as in alliance or joint development agreements, speeches or public statements that display benefits or
advantages of a standard, and documentation of live demonstrations along with market and technical
trials. All data was gathered through a purposive sampling method, with the population consisting of all
network operators and equipment manufacturers involved in the 2G wireless standard selection contest in
the U.S. Sample members must be seen to actively participate in a manner that has been documented in
a secondary source.
The data was gathered from multiple sources. These included inter-organizational agreements,
productftechnology announcements, analyst assessments, expert testimony, and management
comments. ! used secondary data sources that were publicly available, mirroring the method employed

7f25f2006
35
by Das and van De ven (2000). By relying upon data that was recorded at the time the events occurred,
the retrospective bias that might occur through the interview process with informants was minimized.
Also, these sources provided information identifying the actions that companies actually undertook. As
did Das and van De ven (2000), ! attempted to only include information about a firm's actions that could
be gathered from at least two separate sources, in order to avoid potential editorial bias. Thus a second
data search was undertaken to determine if this type of support could be located for all actions and
events in my initial data set. This process was almost completely successful, resulting in multiple
evidence of support for the majority of the actions and events. Only 9 items were unable to be
supported by a minimum of two separate sources. !n addition, seven more information-sharing actions
were identified. Being adequately sourced, they were added into the data set. Upon further analysis, !
determined that the five items from a single source were consistent with the others in their description of
actions and events. Therefore ! judged that their inclusion would not bias the data set, and the final
conclusion from this study is based on relevant data supported by both single and multiple sources.
ii

Therefore the final size of the data set is 87 relevant items.

+.2 DATA ANALYS!S

Since ! relied upon publicly available data, my sources, books, newspaper articles, and public company
documents are all available for perusal. Each quote or example gathered was initially categorized as
either a cascade or a broadcast information-sharing event. Based on theory that distinguishes these two
types, ! developed a set of criteria to define each. The first step after locating an information-sharing
event or action involved identifying the content of the message to be delivered and the type of media
used for delivery. Nessages comprised of strategic and technical content or involving operational or
design specifications were determined to be complex; those that contained support for a standard,
claimed benefits or disadvantages, or announced operational readiness were classified as simple.
Complex messages were typically delivered via interpersonal channels that allowed for frequent and
direct contact. Simple messages were delivered through press releases, interviews, and speeches. This

7f25f2006
36
classification was based on theories of media and information richness in Daft and Lengel (198+; 1986),
is related to descriptions of the message content and media choice for rich and lean information, and
reinforces the literature on tie strength that supports the relationship between the strength of
interpersonal ties, message content, and choice of channel for delivery (Granovetter, 1973; Hansen,
1999). ! reviewed all 87 data items and coded each as either cascade or broadcast. Next, they were
listed chronologically. The data were then separated further according to those information-sharing
instances or actions initiated by Ericsson or Qualcomm, the key standards advocates. Finally, the target
of influence was identified as being government, key adopters, and industry in general, or the market.
The results of this data gathering are depicted in the Results section.
The strength of my methodology is its ability to view patterns within the data as they relate to
actions and outcomes over an entire process. !ts weakness is lack of generalizability to other industries.
As with many forms of research, this study entails a trade-off: it sacrifices some degree of external
validity to gain a more precise understanding of how the strategic sharing of information can influence
standard setting. !n response to this criticism, Yin (198+) argued that cases are not statistical "samples"
and that the goal in case study research is to understand behavioral logic ("analytical generalization"),
not to enumerate frequencies ("statistical generalization")!""When studying human decisions and actions,
"soft" predictions are appropriate to accommodate the unexpected influences that impact these types of
choices.
The important aspect of this study is that it is seeking to provide insights into the factors that
define firm choices in a particular situation.""The descriptive results of this study will form a unique
interpretation of events related to whether and when firms use information-sharing strategies in
standards contests. The results, while not directly transferable to standards contests in other industries,
will provide a greater understanding of the information sharing strategies of firms engaged in standards
contests where network externalities are present, competition exists between both evolutionary and
revolutionary technologies, and the phases of the standard setting process are sufficiently similar to that
of 2G to allow congruence within the information content that is to be delivered. Thus, the value of the

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37
case study findings in this study lie not in their complete generality, but in the behavioral insights they
suggest!

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38




5.0 BACKGROUND: THE W!RELESS !NDUSTRY




The wireless industry consists of all companies that are connected to providing wireless voice and data
services in the United States. Service providers are defined as those firms that build andfor maintain the
wireless infrastructure and offer telecommunications services to users of wireless devices. Nanufacturers
provide the components of the infrastructure along with the end user devices. Technology sponsors
consist of a subset of equipment manufacturers that also develop technical standards. Adopters consist
of service providers and other manufacturers that must decide which technology to support. The wireless
industry is characterized by intense competition, high entry barriers, technological fragmentation, strong
growth, and market fragmentation. These characteristics influenced the decisions and actions of firms
participating in the standards contest for 2G. These key characteristics are also salient features of the
wireless industry as they relate to the events associated with the 2G standard contest. ! also wish to
assess the degree to which they affect the information sharing strategies of the key actors; technology
sponsors (Qualcomm and Ericsson) and technology adopters (service providers) and thus act as
important boundary conditions for my study.



5.1 DEGREE OF R!vALRY


There is a high degree of rivalry amongst service providers in the wireless industry. Competition is fierce
and continues to increase as the industry matures. Basic wireless service has become a commodity, with
its offerings differentiated solely by coverage area and price. Consumer plans that offer unlimited usage
under a variety of conditions have contributed to rapid growth in volumes of minutes and decreased
profit margins for service providers. New production introductions are rapidly imitated, and consumers
hardly have to wait for their own service providers to introduce competitive offerings. This rivalry among

7f25f2006
39
service providers assisted in defining the important criteria that these adopters would apply to their
selection of a 2G technology. !t elevated the importance of selecting a technology that would optimize
network capacity. A viable message that assured service providers that this important requirement would
be met was a substantial component of an information sharing strategy.



5.2 BARR!ERS TO ENTRY


The wireless industry possesses high entry barriers due to the requirement for access to government
controlled spectrum and the necessity for large capital outlays to both acquire spectrum and build
wireless infrastructure. These entry barriers are in place for all new market entrants interested in
providing digital service. The auction process instituted by the FCC in late 199+ for the assignment of 2G
spectrum was structured to enhance competition. !ts goal was to temporarily ease entry into an industry
previously closed to new competition. !n order to ensure that only bidders with adequate financial
backing participated, the FCC forced applicants to pay an up-front fee for any area in which they
intended to bid. For some of the larger areas like New York City, this fee could be as high as $16N.
iii

The continental USA was divided into +6 NTAs (Najor Trading Areas), with licenses available in
each NTA. Current operators were restricted from bidding on spectrum in their own markets, and no
single operator would be able to acquire national coverage. These and other rules effected fragmentation
of the industry by ensuring that multiple players obtained licenses to small portions of spectrum spread
throughout the U.S. The main round of auctions was slated for December 199+, and the FCC received 7+
bid applications for 99 wireless licenses. Relatively few technical standards or service requirements were
imposed on the licenses, causing PCS system operators or new license holders to have relatively little
concern for interoperability with each other's systems.
iv
However, there were restrictions on the
timeframes for service deployment. PCS service providers who purchased licenses in the auctions were
required to begin offering service within two years or face possible forfeit of their licenses.
v
They were
also required to pay half of their spectrum license fee within the first week after receiving the license and
the remaining half within one year.
vi
For national operators who purchased large blocks of spectrum, this

7f25f2006
40
required being ready to pay the FCC extremely large sums of capital quickly. !n total, these auctions
raised over $7 billion for the FCC.
One of the primary outcomes of the FCC's announcement of a 2G auction process was its impact
on the timing of information sharing strategies. The auctions acted as a trigger for service providers to
make their technology selection. The capacity issues of the late 1980s were being resolved through
advancements in analog infrastructure. The introduction of micro cells and cell enhancers in the early
1990s had mitigated any capacity issues that service providers were facing in dense urban cores and
therefore reduced the pressure for 2G standard selection.
vii
This innovation allowed service providers to
delay making a technology choice and provided additional time for new technologies to achieve market
readiness. However, the advent of the auctions forced many current and hopeful service operators to
increase their interest in technology selection, since bidding in the auction required predicting full-scale
deployment costs, which necessitated selection of a technology.
Wireless service is characterized by high fixed costs and is therefore a volume-based business with
greater profits accrued through the transport of greater volumes of traffic. Wireless service providers
must continually invest aggressively in their networks in order to support growth in usage and the arrival
of new services. Thus, aspects of scale and scope influence decision making within the industry.
The primary objective of a wireless digital carrier is to provide a nationwide network of continuous
service with ease of use for the end user.
viii
To achieve that, service providers must either leverage
existing frameworks or build new network infrastructures that can support coast-to-coast wireless service.
Furthermore, the wireless network operator must build or acquire the operating and support
infrastructure for functions such as billing and customer care. !mplementation of an integral, fully
functioning system required both industry experience and access to finances.

7f25f2006
41











Figure 3. U.S. network operators - merger, acquisition, and joint venture activity: 1990-2000


Although there were many potential wireless carriers immediately following the FCC auctions, only
a few possessed the capabilities to accomplish development of the necessary infrastructure in a timely
fashion. Through alliances, acquisitions and roaming agreements, wireless providers gathered the
necessary resources and capabilities to offer seamless national or even global service. Therefore, the
market realities of the wireless industry overcame the imposed fragmentation, and the industry became
consolidated once again. The considerable post-auction N8A activity was undertaken with the
recognition of incompatibility among the competing standards, and the alliances that formed among
network operators took this into consideration.
ix
Throughout 1995-2000, merger and acquisition activity
resulted in the top carriers' being reduced to verizon Wireless (formerly GTE and PCS PrimeCo members),
Cingular Wireless (SBC and Bell South), AT8T Wireless, Sprint PCS (divested themselves of both Cox and
Comcast), voicestream (subsidiary of Western Wireless and now T-Nobile) and Nextel (see Figure 3).
x

U.S. Network Operators – Merger, Acquisition and
Joint Venture Activity 1990 - 2000
1990 1994 1996 2000
McCaw Cellular
GTE
BellSouth
BellAtlantic
Nynex
US West
Ameritech
Pacific Telesis
SouthWestern Bell
Pacific Northwest
Cellular
General Cellular
AT&T
Sprint
MCI
Comcast
Cox
AT&T Wireless
GTE
BellSouth
BellAtlantic
Nynex
US West
Ameritech
AirTouch
SouthWestern Bell
Nextel
Western Wireless
Sprint
MCI
Comcast
Cox
AT&T Wireless
PCS PrimeCo
GTE
*STV
BellSouth
Ameritech
SouthWestern Bell
MCI / Nextel
Western Wireless
*Sprint Telecommunications Ventures
AT&T Wireless
Verizon
Sprint PCS
Cingular Wireless
MCI / Nextel
Voicestream
Comcast
Cox

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42



5.3 TECHNOLOG!CAL FRAGNENTAT!ON


Fragmentation of the technology is indicated by the number of distinctive components that comprise the
technology and the number of different firms that should be considered sponsors of a particular standard.
Both manufacturers and service providers need to address this heterogeneity in the market. The greater
the number of distinctive components that comprise the technology, the greater the number of different
firms involved in the process of product development and distribution.
Technological fragmentation affects how information travels through communities of end users and
technology developers, and the degree to which each developer or adopter affects another's decision to
choose a technology. !n choosing an information sharing strategy, a firm considers what diffusion
pattern is most likely for a particular type of community. !n place of a few known actors, industries
characterized by technological fragmentation have multiple actors - some known and others unknown.
Nultiple signals exist and there is noise in the environment, which can delay key actors' responses. !t
becomes more difficult to influence outcomes in complex environments, and firms might require more
information prior to making decisions (Forster, 1986). These events can increase the uncertainty
associated with a standards setting process and result in firms' seeking to reduce this uncertainty through
alliances and information gathering activities.
Digital wireless technology is a complex technical system that involves many different industry
layers in order to function effectively. The radio access portion (RAN) of the network is primarily
comprised of the handsets, base transceiver station (BTS) and the base station controller (BSC). The
BTS is the transmit and receive link for a mobile communication system. !t's the device that
communicates with the mobile phone and come in three sizes: pico, micro and macro. Each size offers
different benefits according to whether the application is indoor or outdoor, the size of the region to be
covered and the density of users. The BSC, the final component of the RAN, manages the handoff
between BTSs. !t consolidates the transmissions from multiple BTSs and sends the transmissions to the
mobile switching center (NSC). The NSC bridges the wireless network with other networks and acts as

7f25f2006
43
the gateway or entrance points to these other networks. Since users require the ability to access both
other wireless users and wire line users and have a growing demand for global communications,
interconnection of all wireless and wire line networks is necessary. Thus, a digital wireless standard must
include the detailed specification of several distinct interfaces.
Developing and distributing all of these components cannot be managed by a single firm, or by a
small group of firms. !n today's market place, there are at least 100 firms involved in some aspect of the
development, manufacture and service provisioning of a wireless network. This is not surprising, since
past research efforts have identified that complex technologies require the participation of multiple
parties for continuous innovation (Tushman and Rosenkopf, 1992; Rycroft and Kash, 199+). One example
of the complexity inherent within the wireless industry is the large number of firms that are involved in
the manufacture of a wireless handset, which is just one component of a complete digital wireless system
(see Figure +).
A typical cell phone handset, despite its basic function of sending and receiving a telephone call, is
a complex piece of equipment. !t requires many different operating systems and interfaces to provide
the combinations and range of services demanded by the market. Handsets' user interfaces can vary in
screen size, depth of color and keypad configuration. Chip-level differences can constrain their memory
and processing speed. Nany cell phones operate like miniature computers. A myriad of manufacturers
and service providers contribute to the development and manufacturing of a single cell phone. Thus, the
cellular telephone industry is characterized by a highly fragmented technology (see Figure +).

7f25f2006
44

Technical Complexity – The Pieces of the Puzzle in the Mobile Handset Industry
Global Handset Manufacturers
Alcatel Fujitsu HTC LG Motorola Nokia Sagem Sendo Sharp Sony
Ericsson Hitachi Kyocera Mitsubishi NEC Panasonic Samsung Sanyo Siemens Toshiba
Passive Components
Conexant
Intel
Motorola
Nortel
PrairieComm
RF Micro
STMicroelectric
Texas Instrument
Modems, Processors & Memory
Altera
Analog Development
Conexant
Infineon
Intel
LSI Logic
Lucent
Mobilink
MorphICs
Motorola
PrairieComm
Qualcomm
Samsung
Silicon Wave
ST Microelectric
Texas Instrument
Transmeta
Active Components
Alcatel
Alpha Industries
Anadigics
Analog Development
Celeritek
Conexant
Infineon
Mobillink
Motorola
National Semiconductor
Nortel
RF Micro
Sawtek
SiliconWave
STMicroelectric
Texas Instrument
Tropian
Apps, Drivers & Accessories
Conexant
Intel
Motorola
Nortel
PrairieComm
RF Micro
STMicroelec
Texas Instrument
Raw Materials
Alpha Industries RF Micro
Atmel Sumitomo
Conexant TSMC
Infineon Texas Instrument
Kopin TRW
Technology Licensing
ARM Qualcomm
MorphICs Symbian
Palm
Technical Complexity – The Pieces of the Puzzle in the Mobile Handset Industry
Global Handset Manufacturers
Alcatel Fujitsu HTC LG Motorola Nokia Sagem Sendo Sharp Sony
Ericsson Hitachi Kyocera Mitsubishi NEC Panasonic Samsung Sanyo Siemens Toshiba
Passive Components
Conexant
Intel
Motorola
Nortel
PrairieComm
RF Micro
STMicroelectric
Texas Instrument
Modems, Processors & Memory
Altera
Analog Development
Conexant
Infineon
Intel
LSI Logic
Lucent
Mobilink
MorphICs
Motorola
PrairieComm
Qualcomm
Samsung
Silicon Wave
ST Microelectric
Texas Instrument
Transmeta
Active Components
Alcatel
Alpha Industries
Anadigics
Analog Development
Celeritek
Conexant
Infineon
Mobillink
Motorola
National Semiconductor
Nortel
RF Micro
Sawtek
SiliconWave
STMicroelectric
Texas Instrument
Tropian
Apps, Drivers & Accessories
Conexant
Intel
Motorola
Nortel
PrairieComm
RF Micro
STMicroelec
Texas Instrument
Raw Materials
Alpha Industries RF Micro
Atmel Sumitomo
Conexant TSMC
Infineon Texas Instrument
Kopin TRW
Technology Licensing
ARM Qualcomm
MorphICs Symbian
Palm

source:
1
Deutsche Bank Alex.Brown, 2001
Figure +. Nanufacturers of mobile handset components



Firm strategy for sharing information with other sponsors and adopters is affected by the degree of
technological fragmentation. Under a high degree of technology fragmentation, multiple players are
typically involved in the development of the standard - the target of influence spans beyond traditional
users. Nultiple players can lead to many different interests and priorities, increasing the difficulty of
reaching agreement on the merits of a particular standard. These users are critical to the development
of the technology and must be brought on board. To achieve this, the firm's information sharing strategy
must adapt to the unique needs of each party involved, requiring a customized cascade strategy.



5.+ GROWTH


Wireless has been one of the most dynamic and fastest growing industries of the past 20 years. Between
1983, the year of wireless service inception in the U.S. market, and 1999, wireless subscribers grew to 86

7f25f2006
45
million, driven primarily by consumers. A large portion of this growth is attributed to substantial declines
in service prices; between 1996 and 1999, average prices per minute of usage declined by more than
30¾. During the same period, wireless user demand was found to be price elastic, with average usage
doubling from 200 to +00 minutes per month.
xi
This growth made the industry an attractive proposition
for service providers and makers of complementary products.
Ongoing innovation in content, related wireless devices like personal digital assistants (PDAs) and
advances in chips and semiconductors stretched the capacity of existing wireless networks. The problem
of insufficient capacity increased the pressure on service providers to select a technology standard. At
the same time that these new innovations were increasing the pressure on industry to move from 1G to
2G, technological advancements in 1G technologies were reducing this pressure. These advancements
enhanced analog network abilities to partially manage the demands of increased usage and thus allowed
service providers to retain their current infrastructure for an extended period of time. This allowed the
revolutionary standard CDNA to work through a series of technical difficulties and eventually become as
market ready as TDNA and GSN.



5.5 NARKET FRAGNENTAT!ON


Fragmentation of the market refers to variation in adopters' use of and preferences for the technology;
the criteria that optimize the technology's utility to some users may detract from its value to another
segment of the market. !f adopters' needs are homogenous and the product is not complex in its make-
up or application, a consistent, simple message regarding the intent of the technology and its anticipated
benefits can be communicated to the entire market simultaneously, irrespective of the standard's stage of
development. However, in a market characterized by a high degree of heterogeneity in adopters' needs
and complexity associated with the technology, a more detailed and differentiated message needs to be
communicated across a variety of target markets. !n each situation, a different information sharing
strategy and the timing associated with its use may yield greater success in influencing users'
preferences.

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46
Demand for service in the wireless industry is fragmented, with consumer demand expectations
that vary according to individual lifestyle. Different market segments require differing levels of network
coverage and different levels of usage. Sophisticated users are interested in access to advanced
features, while more casual users require only basic service. The market is able to select from a variety
of offerings or packages comprised of different allocations of wireless minutes. !n addition, the packages
also contain an array of enhanced services. !ndividual users generally pay a flat monthly fee for these
packages, but can customize their own service through selecting or opting out of certain features or
offerings. Advancements in chip technology allow users to customize their handsets with applications
and features instead of being constrained by service providers or handset manufacturers.
xii
Thus,
wireless service is able to appeal to multiple segments within any market.
Although this market fragmentation allows wireless services to have appeal in many different
market segments, it does not increase the complexity of the information sharing message to be
communicated to end users. This message is comprised of coverage advantages and differences in
allocations of monthly minutes and can be delivered adequately through broadcast channels.



5.6 FUTURE R!SK


Rapid change, an uncertain future and technical fragmentation forced many firms to enter into alliance
arrangements from 1990 through 1996, when the technologies were undergoing development. The
technology was complex, with many vested sponsors and significant risk embedded in decision making.
Service providers that deployed the wrong technology might be stranded with infrastructure, whereas
manufacturers that developed the wrong technology might face financial decline. Companies in both
sectors needed to reduce their exposure, since no-one was able to predict which wireless standard would
dominate the U.S. or global market. This spurred development agreements between standards sponsors
and key service providers and manufacturers. These agreements generally involved the exchange of
capital and specialized knowledge and required personal relationships for effective delivery, since some of
the information associated with the standard's development at this time is tacit. These relationships also

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47
formed the basis for the merger and acquisition activity that followed, with many of these alliance
partners ending up equity partners.
Nearing the end of the development period, firms began to prepare for commercial deployment of
networks. This caused a shift towards the use of licensing agreements, where those firms involved in the
development of the standard, issued licenses that allowed others to manufacture infrastructure
components and handsets. Nany wireless equipment manufacturers chose to acquire licenses for more
than one standard, in case one standard would dominate. These licensing agreements occurred in
conjunction with the signs of early adoption and correspond with a shift from the use of relationships and
cascade information sharing to increased broadcasting of the technical and market claims of all
competing standards.

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6.0 CASE STUDY: THE SECOND-GENERAT!ON (2G) D!G!TAL W!RELESS STANDARD SETT!NG PROCESS
!N THE UN!TED STATES




The 2G standards contest in the United States is an excellent example of a competitive standard setting
process. !t is primarily a competition between two different firms, each sponsoring its unique technical
standard. This provides the backdrop for an analysis of information sharing methods. This case study
looks at the development and deployment of the air interface standards TDNA, GSN and CDNA, focusing
on the information sharing aspects evident within this standard setting contest.
The first section overviews the technologies and provides the context for the discussion on the
timing of information sharing events and actions. The next sections describe in detail the technology
sponsors and adopters, along with the decision criteria adopters use in the selection of a wireless
technology. Finally, the key information-sharing elements associated with the message, media, target
and timing are described. The actual information sharing events are provided in narrative form,
beginning with the technology sponsor Ericsson and its support for both TDNA and GSN, and following
with technology sponsor Qualcomm with its evident support for CDNA. The final section of the case
study provides insights into the outcome of the standards contest.



6.1 THE TECHNOLOGY


The first cellular services were analog and operated via a common standard at 800 NHz. These analog
services are commonly referred to as First Generation Technologies (1G). Second Generation wireless
service (2G) is a digital offering that operates at and around 1850 NHz. Digital technologies are
considered superior to analog due to their ability to use spectrum more efficiently, allowing for greater
transmission speeds and security. Digital technology encodes voice into bit streams by sampling the

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49
sound wave and then sending the frequency of each sample separately. This delivery method helps make
digital transmission secure. Digital technology provides the faster data speeds necessary for today's
demanding multi-functional user. Digital technologies are a vast improvement over older analog systems
like 800 ANPS, as the former allow increases in capacity and their transmission or voice quality is highly
superior.
xiii
Other benefits of digital include better usage of "bandwidth," or being able to transmit more
data within a fixed amount of time and reduced likelihood of a poor quality call. One disadvantage of
digital technologies is their requirement for smaller cell sites. 2G wireless services in the United States
operate at a higher frequency (1.8 GHz to 2.2 GHz) than the ANPS or analog standard, which more
severely limits the distance that the 2G wireless signal can travel. This forces 2G operators to deploy
more cell sites and purchase more equipment than analog carriers would.
xiv
The result intensifies the
significance of the decision surrounding the choice of a digital standard, since it increases the presence of
lock-in for the service provider.
Another important difference in the digital case is the changing nature of the business environment
for service providers. Domestic concerns had been the primary driver in the choice of a standard, but
with the advent of wireless digital, they've become overshadowed by global concerns. A standard must
allow access to this international network. According to the American National Standards !nstitute (ANS!),
2G digital service requires network interconnection and universal access. National economies have
become global economies, and international business has raised the demand for mobile services. Cellular
had largely been a business tool, but social demand for cellular has grown a vision of digital wireless
service that is communications anytime, anywhere and to anyone.
xv
The ability of service to be
seamless, wherever the end user might be, will continue to increase in importance. This change serves
to heighten the importance of network externalities for this industry and has direct influence on the
decision criteria for technology choice.
There exist three separate methods for sending wireless information digitally. The first is frequency
division multiple access (FDNA), in which each conversation is transmitted over a dedicated frequency.
This is the earliest version of digital access and is considered the least efficient. Next is time division
multiple access (TDNA), in which a conversation is broken into packets or pieces of messages encoded

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with the destination address, which are then sent sequentially over a single selected frequency. Finally,
there is code division multiple access (CDNA), in which a conversation is broken into individual packets,
each stamped with an identity code and sent out over a spread spectrum of frequencies. These three
technologies form of the basis of the digital wireless standards, with TDNA and CDNA being the ones
directly involved in the 2G contest.
There were three technologies vying to be the dominant standard in the U.S. wireless industry:
TDNA (!S-5+), the European version of GSN (TDNA 1900) and CDNA (!S-95). The GSN technology was
originally developed for the European market in the late 1970s and early 1980s. TDNA, a derivative of
GSN, did not begin development until the late 1980s but was still initiated slightly ahead of CDNA.
European GSN also reached the adoption and diffusion stages later than either TDNA or CDNA. The late
entrance of GSN into the North American market was not from a lack of technical readiness, but due to
the priority its technology sponsor had on the development and adoption of TDNA !S-5+ in the United
States wireless market (see Figure 5).
!n January 1989, the Cellular Telecommunications !ndustry Association (CT!A) endorsed the TDNA
standard in the United States. The CT!A is an industry-based group consisting of both manufacturers and
service providers who operate in the wireless industry. !ts endorsement, although not necessary for the
marketing of a standard, was beneficial since a non-endorsed standard would have little chance of being
adopted industry wide. TDNA was an evolutionary technology and offered a seamless transition path
from 1G to 2G. Network operators would be able to reuse much of their current infrastructure under the
guise of TDNA. GSN and CDNA, on the other hand, required significant deployment of new
infrastructure. GSN was a proven technology, mandated as the standard of choice by the European
community and already widely accepted internationally during the critical phases of the 2G standard
contest in the U.S. market. !t was revolutionary in nature and required reconstruction of infrastructure,
but promised benefits in increased capacity and feature availability. CDNA was also a revolutionary
change for wireless service operators and a bold departure from conventional wireless theory. When
QUALCONN first proposed using the technology in 1989, much of the industry was mystified.

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Qualcomm's story is one of perseverance and unmitigated support for an innovative new technology that
succeeds despite numerous obstacles and setbacks.

Source: Bekkers, Rudi, ¨Nobile Telecommunications Standards - GSN, UNTS, TETRA, and ERNES"
Figure 5. 2G wireless standards: the stages of standard development



!nitially, the standards contest was primarily between TDNA !S-5+ and CDNA !S-95. !t gradually
became evident that the !S-5+ technology lacked the technical merits of CDNA or GSN. !S-5+ did
undergo two revisions culminating in !S-136, which added features and corrected some basic problems,
but its lack of market support hampered efforts to develop a migration path into the 3rd generation (3G)
era.
xvi
Therefore, although TDNA was initially thought to be a viable contender and was the first to be
Development
Adoption
Diffusion
•Early technical research
•Technical, economic and strategic design issues
•Decision process for basic technical properties
•Initial support from key adopters
•Supporting measures from community at large
•Infrastructure development and procurement
•Equipment development and type approval issues
•Intellectual property rights issues •Infrastructure deployed
•Supply market structure
•Standard upgrading
GSM Global 1979
TDMA 1987
CDMA 1988
GSM Europe 1992
GSM USA 1996
TDMA 1993
CDMA 1996
GSM Europe 1986
GSM USA 1994
TDMA 1988
CDMA 1989
2G wireless standards – The Stages of Standard
Ongoing for
GSM and
CDMA

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endorsed by the CT!A, as time passed and its limitations became more obvious, the majority of U.S.
service providers chose between the Qualcomm CDNA solution and the European based GSN solution
supported by Ericsson.
xvii

Table 2. Key attributes of competing 2G standards

Standard Technical
Name
Primary Advantages Technology
Sponsor
TDNA !S-5+ ƒ Early CT!A endorsement
ƒ Backward compatibility with analog
ƒ !ncreased capacity over analog but only
three-fold
Ericsson
GSN TDNA 1900 ƒ Proven technology with large international
support
ƒ !ncreased capacity over analog, closer to
six-fold
Ericsson
CDNA !S-95 ƒ Further increased capacity claimed over
analog and other digital standards, at least
ten-fold
ƒ Expectations of efficiency and cost
effective future operations
Qualcomm




6.2 TECHNOLOGY SPONSORS: ER!CSSON AND QUALCONN


Equipment manufacturers produce the base stations, control towers and handsets necessary for a
wireless network. They are actively involved in the development of the digital wireless technical
standards and may decide at the outset to promote one standard over another. Ericsson is credited with
the basic design of GSN and TDNA and thus displays significant loyalty to both. !t refused to develop any
CDNA related equipment until the year 1999, when the technical strengths and limitations of the
standard were well known.
Qualcomm designed and developed the CDNA !S-95 standard, controlled numerous related patents
and licensees and manufactured some of the technical components related to CDNA. Due to the
advanced nature of the CDNA standard, critical components like chipsets and software that facilitated the
functioning of the first CDNA handsets were not available for Qualcomm to acquire from traditional
equipment manufacturers. This forced Qualcomm to garner expertise in the development and

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53
manufacture of AS!C (application-specific integrated circuit) technology in order to commercialize the
CDNA technology, thus increasing their overall risk and commitment.
Ericsson is a multinational telecommunications company based in Stockholm, Sweden, with more
than 70,000 employees by the late 1980s. The company was a pioneer in the development of wired
telephones and had been in operation since 1876. !t was and remains the largest supplier of mobile
systems in the world. !n contrast to Qualcomm, Ericsson was a large multinational telecommunications
provider that possessed a strong reputation in the wireless industry for innovative products. !t was a
traditional company and its hierarchical business unit structure reflected this. Qualcomm was considered
an upstart in the industry with a handful of wireless products all revolving around CDNA technology.
When it developed the technology for CDNA in the early 1990s, it had fewer than 100 employees.
Qualcomm, established in 1985 in San Diego, California, began as a six-person communication
technology company providing contract research and development services and limited product
manufacturing for the wireless telecommunications marketplace. Qualcomm did have experience in the
development and manufacturing of digital technologies, especially in the satellite industry. However, it
was markedly different from Ericsson in size, structure and culture. There was a very fluid and open
environment at Qualcomm that supported new ideas. The original company members were all good
friends, and business and pleasure often mixed. This created an opportunistic approach to innovation
where all ideas could be explored during or after hours. Today it has revenues of over $+ billion, with
8000 employees and operations in over +0 countries.
xviii

Ericsson has continually participated in the development of a variety of standards through its own
research and development sector.
xix
Qualcomm remains solely committed to CDNA and migration of this
standard to 3G. For Ericsson, advocating GSN and !S-5+ was important but not critical to their existence
as a firm. Ericsson already possessed a strong industry reputation and numerous contacts. !t had access
to large sums of capital that could be used to support the development and implementation of its
standards. Qualcomm, a relative newcomer within the industry, required the development of a network
of contacts and the forging of new relationships with key actors. Capital was often scarce, and it was
necessary to form alliances to obtain critical funds. With its focus on CDNA, Qualcomm had the most to

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lose in the 2G contest since it was unlikely that it would exist as a firm if CDNA failed. !t accomplished its
goal of CDNA industry-wide acceptance through persuasion and unwavering commitment.

Table 3. Characteristics of the technology sponsors












6.3 TECHNOLOGY ADOPTERS AND OTHER !NFLUENCERS


The key participants in the wireless industry consist of the network operators, which deploy the
infrastructure and offer service to end users; equipment and switch manufacturers, which develop the
technical standards; federal government regulatory bodies that allocate spectrum and monitor progress;
and end users who ultimately purchase handsets and are interested in seamless, reliable and inexpensive
mobile service.
!n America, the most influential group involved in the 2G standard-setting process is the network
operators or service providers. The network operators are an important part of the link between the
manufacturer and the end user, and are primary adopters of the technology. Network operators
construct networks associated with the standard they've selected. They need to pay attention to which
• CDMA is a revolutionary technology • TDMA is considered evolutionary
technology but GSM is revolutionary
Technology
• 4 business units: CDMA Technologies,
Wireless & Internet, Technology
Licensing, and Strategic Initiatives
• Separate R&D sector; Business units
consist of Access technologies, Mobile
and Non-Mobile systems, Transmission
and Transport systems and global
services
Structure
• Makes mobile phone chipsets based on
CDMA technology and also licenses that
technology to other makers of mobile
phones.
• Supplies a full range of network
equipment and services that enable
telecommunications; committed to open
standards, developer of multiple
technologies
Focus
• Started in 1985 • Started in 1876
Age
• Revenues of $4.9B (2004)
• 8000 employees (2004)
• Operations in over 40 countries
• Revenues of $131B (2004)
• 18 000 employees (2004)
• Operations in over 140 countries
Size
Qualcomm Ericsson
• CDMA is a revolutionary technology • TDMA is considered evolutionary
technology but GSM is revolutionary
Technology
• 4 business units: CDMA Technologies,
Wireless & Internet, Technology
Licensing, and Strategic Initiatives
• Separate R&D sector; Business units
consist of Access technologies, Mobile
and Non-Mobile systems, Transmission
and Transport systems and global
services
Structure
• Makes mobile phone chipsets based on
CDMA technology and also licenses that
technology to other makers of mobile
phones.
• Supplies a full range of network
equipment and services that enable
telecommunications; committed to open
standards, developer of multiple
technologies
Focus
• Started in 1985 • Started in 1876
Age
• Revenues of $4.9B (2004)
• 8000 employees (2004)
• Operations in over 40 countries
• Revenues of $131B (2004)
• 18 000 employees (2004)
• Operations in over 140 countries
Size
Qualcomm Ericsson

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network infrastructures will survive and how their technology choice impacts features, price and
performance in both the short and long term.
xx
To avoid stranded investment, they desire a technology
standard that other network providers and especially manufacturers are supporting.
Traditionally, in an information-based standard-setting process, regulatory bodies are one of the
most influential groups. The nature of these standard setting processes and the impact they have on
both public resources and economic prosperity have historically required the direct command and control
of government supported boards operating in the best interests of the public. Historically, regulators and
government bodies are one of the most important early adopters that a firm supporting a particular
technological standard must influence.
xxi
This is certainly the case with GSN, as the active participation
of many government bodies within the European communities was instrumental in its development and
acceptance.










Figure 6. Actors and their main relations during the 2G standards contest


The main telecommunication regulatory body in the United States, the Federal Communications
Commission (FCC), chose not to become actively involved in the 2G standard setting process. !nstead, it
Standard Sponsors:
Ericsson and Qualcomm Network Operators
Software Suppliers
Intermediaries
Equipment Manufacturers
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Standard Sponsors:
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decided to let the marketplace determine the "best" standard. This is consistent with its behavior across
a number of information-related technologies and is based on the belief that innovation patterns are
better determined by responses to economic than to political forces, and that given the chance, firms will
respond to commercial and technological opportunities and drive technological change.
xxii

End users cannot influence this process of standards adoption, but implicitly support a particular
standard through their selection of wireless carriers. They make this choice based on clarity of voice
transmission, handset prices, usage rates, coverage and service.
xxiii
Each digital standard has different
capabilities associated with the technical aspects of spectrum usage and voice clarity. The abilities of
service providers also depend on the size of the network they deploy, the coverage they provide, the
level of service they offer, and their pricing.

6.3.1 The Service Providers


The early wireless network operators in the U.S. market consisted of the Regional Bell operating
companies of Bell South, Southwestern Bell (SBC), Pactel, Nynex, Ameritech, US West and Bell Atlantic;
GTE; and NcCaw Cellular. By 1992, they represented the top 9 cellular providers and served a
population base in excess of 350 million.
xxiv
These were the incumbents that participated in the later
selection of a digital wireless standard. AT8T purchased NcCaw Cellular in 1993, making AT8T Wireless
the largest cellular provider in the U.S. market. Since the cellular business was a success globally,
predictions for future growth in both subscribers and usage made entry into this market very appealing.
The FCC's decision to implement an auction process for the dispersal of spectrum for 2G provided an
entry opportunity to long distance carriers NC! and Sprint, and cable companies Comcast, TC! and Cox.
xxv

As of 199+, the top cellular providers or key adopters were Ameritech, AT8T Wireless, Bell South,
GTE, PCS PrimeCo (partnership of AirTouch, Bell Atlantic, NYNEX and US WEST), Sprint
Telecommunications venture (alliance with Comcast and Cox Cable), Southwestern Bell (SBC) and
Western Wireless.
xxvi
These were the key service providers whose technology choice was to determine
the outcome of this standards contest. By mid-1995, the majority of these carriers had made their
selection regarding a 2G wireless standard.

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6.3.2 How Service Providers Decide between Standards


The choice of a wireless digital standard is driven by four primary concerns: capacity, feature availability,
network deployment costs and market pricing of wireless devices. Long term capacity of the network is
one of the most critical concerns for wireless service providers. Wireless services require access to
spectrum, a finite resource. Technologies that make the most efficient use of available spectrum are
considered superior. Digital technology has the ability to support larger volumes of users within a given
network. TDNA- or GSN-based standards are claimed to offer three- to six-fold increases in capacity
over analog ANPS. CDNA is claimed to offer a ten-fold increase over ANPS.
xxvii
Continually increasing
demand for mobile services will constrain the ability of available spectrum to meet the future needs of
users. The key decision hinges upon degree of belief in each standard's capacity claims.
The availability for a wireless technology to support a variety of features is a measure of its
functionality, that is, its capability to support technological advances. One example of this requirement
for the wireless phone industry is the ability to support the transmission of very high-speed data. The
wireless phone industry, although predominately interested in the transmission of digitized voice today, is
quickly shifting towards future requirements for a wide variety of data applications. The growing
popularity of the !nternet is placing increased emphasis on the development of wireless devices that
combine voice communications and !nternet access capabilities. "Cell phone and wireless PDA capabilities
are moving well beyond just making a call or organizing personal information," according to Hans Geyer,
!ntel vice president and general manager of its PCA Components Group. "The ability to send and receive
pictures, play rich 3D games, or download ring tones, video clips, and music are growing in popularity. To
support the ongoing adoption of data services and applications, the underlying technology must be able
to deliver enhanced multimedia capabilities and lower power."
xxviii
Since ongoing innovation that displays
commitment to a particular technological standard sends a signal of ongoing support, the future
functionality of a standard along with a clear migration path to next generation technologies is effective
at convincing potential adopters to select one standard over another.

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Digital wireless standards are characterized by producer and consumer lock-in. Producer lock-in
has a strong impact on choice of standard. Once service providers decide upon a standard, they must
construct a network. The large capital outlay and time commitment required to deploy a wireless
network locks in operators and thus end users to certain standards. The rules that accompanied receiving
spectrum in the 2G auction process forced service providers to commit and deploy in a short timeframe.
To deploy a wireless network, a firm requires access to capital, technological expertise, potential cell sites
and spectrum. The cost of the equipment for these new technologies is highly dependent upon
economies of scale in the manufacturing process. A common standard can bring about network
externalities that benefit producers. They can acquire inputs more cheaply through exploitation of
economies of scale associated with increased volumes of production. Since each technological standard
is significantly different, economies of scale can only be generated by sufficient demand for equipment
meeting a given standard.
Positive feedback and lock-in are also evident within the manufacturing of wireless handsets.
!ncreased demand for a particular handset reduces the cost to produce it, thus reducing its market price.
Handsets designed to function with one technology do not operate on another type of digital network,
since each technology standard is unique. The only means of compatibility exists through the original
800 NHz band. !n order to offer national coverage during the initial years of digital service, wireless
providers in the U.S. began using dual-mode phones that support 800 ANPS as one standard and their
digital choice as the other. The presence of 800 ANPS enables nationwide roaming but increases the
manufacturing cost of the handset and does not allow consumers to retain their handsets if they choose
an alternate carrier supporting a different standard. The literature suggests that consumers win as
common standards typically heighten competition causing reduced prices, enhanced services and
increased quality.
xxix
The GSN standard, with its early support in Europe and other key markets, had the
added allure of promising higher global demand than CDNA.

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Table +. Key criteria for technology adopters 1990-1995
Criterion TDNA !S-5+
(Ericsson)
GSN
(Ericsson)
CDNA !S-95
(Qualcomm)
Availability 1992 1991 1995
Capacity enhancements
over analog
3-6 times 6-10 times 10-20 times
Compatibility with
analog infrastructure
Backward compatible !ncompatible !ncompatible
Known presence of
scale economies
!nitially thought to be
medium to high, but
declines to low over
time
Highly certain !nitially uncertain but
becomes medium over
time
Perceived service quality !nferior Superior Superior
Ability to support
complex Data services
Low High High
Degree of decision risk
surrounding adoption
due to stranded
infrastructure
!nitially low but
increases to medium
Low !nitially high but
declines to low
Ability for seamless
international roaming
Low Nedium !nitially low but
increases to medium

6.3.3 Key Equipment Nanufacturers


Nany firms that produce handsets also manufacture equipment for the infrastructure. Key equipment
manufacturers that are important in this analysis are Notorola, AT8T Network Systems (Lucent), Nokia
and Northern Telecom (Nortel). These firms, with Ericsson, represented the top equipment and handset
manufacturers offering service to the U.S. market at the time of the 2G standards contest. Even though
these manufacturers supported multiple digital wireless standards, they tended to emphasize TDNA-
based standards or CDNA. Therefore, they can be described as "choosing a side" within the standards
contest, although the evidence of this is marginal. This is important since their support and dedication to
a particular standard impacts the perception of service providers' ability to supply equipment in a timely
and seamless manner.
Notorola was the earliest supporter of CDNA, entering into a development agreement with
Qualcomm in late 1989. This agreement was a hedge against the possibility that CDNA might eventually
dominate. !n addition, Notorola supported TDNA and GSN, developing and manufacturing equipment for
these networks as well. AT8T Network Systems was also an early advocate of CDNA and committed

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funding for its development in mid-1990. This support continued even as AT8T Wireless, a separate
entity, was choosing to deploy a TDNA-based network. Notorola, AT8T Network Systems and Qualcomm
would be the largest beneficiaries of a successful CDNA standard.
On the other side of the contest we see Ericsson clearly supporting TDNA and GSN. Both Northern
Telecom and Nokia also support these standards but in addition display support for CDNA. Northern
Telecom publicly displays its support for the CDNA standard through a partnership agreement to
manufacture infrastructure with Qualcomm in late 199+. However even with this late hedge, Northern
Telecom, Nokia and Ericsson are seen as the clear winners if the GSN standard dominates the U.S.
market. Today, all of these firms, including Ericsson, produce equipment complying with both the CDNA
and GSN 2G digital standards and with the newer 3G digital standards.

6.3.+ Software Developers


The wireless industry also supports providers of software applications for use within both the handset and
the base equipment. These companies range from large, well-known ones like Sun Nicrosystems to
newer, more application specific ones like Smartvideo Technologies. These firms share some
responsibility for the success or failure of the standards. Since their choice is down market, their
influence is not as great as that of the network providers or the equipment manufacturers, but sufficient
demand must exist prior to one of these firms committing to the development of the software necessary
for the equipment to function. Their support is required before the results of the standards battle are
evident, as software development is essential in prototypes and in technical and market trials.



6.+ !NFORNAT!ON SHAR!NG - ASPECTS OF NESSAGE, NED!A AND TARGET


6.+.1 Whom to influence


This analysis investigates the key actors in the standard setting process that took place in the U.S.
market during 1988-1998. The focus is on the decisions of service providers, since they are the link

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between the manufacturers and end users. Their actions and commitments at the firm level will be a key
source of data for this assessment. Other influential actors are the equipment providers, as their role
includes developing the standards from the onset, generally being the technology sponsors and
committing to manufacture and distribute products for a standard. Their decisions directly impact and
affect service providers' choices. The interaction between these two groups provides evidence of
information sharing being used to influence the choice of a technical standard.
The standard setting process for CDNA and particularly GSN involved a high degree of regulatory
influence, and the revolutionary natures of CDNA and GSN required a significant degree of interactions
among industry players in order to gather the quantity and quality of both technical and non-technical
information required for standard selection. The process by which TDNA was initially selected by the
CT!A appears more reflective of what Das and van De ven (2000) suggest is a technical process with
agreement being reached on technical merits in a timely fashion. However the process gains complexity
as the decision enters the market, and even in the case of TDNA, the characteristics of the standard
selection process align themselves more with those of an institutional strategy, due to the fragmentation
of the wireless technology and the need to convince multiple interest groups of the superiority of one
technology over another.

6.+.2 How does it occur?


!n the 2G standard setting process, broadcast mechanisms were used to try to frame the debate. These
included press releases, news stories, white papers, speeches at industry conferences or symposia, and
!nternet forums. Cascade techniques were also employed, such as personal relationships through
alliances, and cooperative agreements that were facilitated through technical committees and industry
groups.
Press releases are generally issued by technology sponsors and early adopters to announce key
benefits or significant events. Their impact is industry wide if not beyond. White papers are generally
developed by technology sponsors on a stand alone basis or in conjunction with already committed
service providers. Their sphere of influence, although large, is generally limited to industry actors.

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Speeches and symposia are generally targeted at specific actors within the industry, primarily those in
attendance, and can be expected to have less widespread influence. Finally, !nternet forums are the
least controllable aspect of broadcast information sharing. The message delivered in these venues is
solely determined by the writer, and anyone having on-line access can participate. !nternet forums tend
to have the most limited span of influence, typically directed at select groups of users who participate in
the activity, but can be a way to influence adopters.
!n highly complex and fragmented industries, organized groups evolve in order to facilitate
coordination of the activities of all the participating firms. !n the telecommunication industry, cooperative
technical organizations (CTOs) are used as a central coordination point for the dissemination of
information on many aspects of a standard (Dokko 8 Rosenkopf, 200+). These groups are influential in
the selection of a standard and in some cases their influence may actually determine a standard. !n the
U.S., the key groups are the CT!A, the CDNA development group formed in 1993 and the North American
GSN alliance, formed in 1997. These groups provided opportunities for personal contact among
technology sponsors, adopters and manufacturers. Within the CT!A, representatives from interested
firms sought to influence others to support their technology. All parties involved attempt to agree on
migration paths and the components of the technical standard (Dokko 8 Rosenkopf, 200+). Nembership
in CT!A included all relevant manufacturers and service providers within this analysis and at least one
license holder in each of the U.S. markets.
xxx
!ts board in 1995 included Ericsson, Notorola, PCS PrimeCo
and Pacific Telecom. The membership of the CDNA development group initially included 17 companies,
all already committed to the advancement of the standard. This is similar to the GSN development
group, which represented the interests of both service providers and manufacturers committed to the
delivery of GSN. The contacts formulated within these committees represent the foundation for much of
the alliance activity and relationship building. Rosenkopf, Netiu and varghese (2001) suggest that
participation in these technical committees provides access to and control of technical and strategic
knowledge, and that this venue provides a pre-alliance context in which firms communicate and identify
opportunities for future collaboration.


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63
6.+.3 When does it Occur?


For the 2G case, the development phase was the most critical for the sharing of information that would
convince key adopters to move forward with the final development of both the GSN and the CDNA
standards. !n GSN, the first key adopters that Ericsson needed to influence were the governments of
West Germany and France. Later, as the standard gained worldwide momentum, Ericsson would focus on
the network operators in North America. !n contrast, Qualcomm needed to influence major network
operators and manufacturers in the U.S. and globally. Qualcomm recognized that for the CDNA standard
to endure, support was needed from a major service provider and manufacturer early in the standard
setting process.
xxxi
For TDNA !S-5+, endorsement by the CT!A was the trigger event that allowed it to
become part of the U.S. standard setting process.
As the standard selection process moved into the adoption phase, the bandwagon effect began. A
series of key adopters publicly announced their choice of a standard, and this solidarity helped engage
the support of other firms. ¨When PrimeCo and Sprint PCS chose to implement CDNA, it was clear to us
that we could move forward with our CDNA plan and be compatible with other PCS service providers
around us."
xxxii
Finally in the diffusion phase it is evident which technology each adopter chose to
support as they begin to purchase equipment and build infrastructure.



6.5 EvENTS LEAD!NG UP TO THE STANDARDS CONTEST


The market for wireless phone service in the U.S. began more than 25 years ago. !nitial cellular service in
the U.S. was analog, based on the Advanced Nobile Phone System (ANPS) standard which relied on
frequency division technology (FDNA) in the 800 NHz to 900 NHz bands. ANPS is considered to be a
first generation (1G) solution. ANPS or some version of it was the dominant worldwide standard
throughout the 1980s and is still used in many locations today to supplement digital coverage.
The European market used a variety of different analog standards. Britain, Germany, France, !taly
and the Nordic countries all had their own proprietary systems. The fractured nature of these multiple

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64
systems hindered system interoperability and continent-wide roaming. They were ill equipped to handle
the growing demand of wireless users. These factors forced the European countries to begin searching
for a better solution well ahead of American wireless carriers.
xxxiii

!n the mid-1980s, the European Union was already concerned about the sustainability and
interoperability of its wireless systems. Frustrated with the slow progress of the !nternational
Telecommunications Union (!TU), an arm of the United Nations that was responsible to lead discussions
for a common global standard, the European Union in 1988 mandated that the common standard within
its borders be GSN.
xxxiv

Launched in 1988, the European Telecommunications Standards !nstitute (ETS!) was designed to
promote regional harmonization of cellular networks in Europe. Group Special Nobile, the standards
group dedicated to the development of radio and telephone systems in Europe, had been working on a
new European standard since 1982. This group was moved under the auspices of ETS! in 1989.
Based on time division multiplexing, GSN is a digital technology that operates in the 900 NHz and
1800 NHz frequency bands. The selected design is based on a proposal by Ericsson, but between the
devising of initial concepts for the standard in 1982, and the completion of standard specifications in
1988, a wide variety of industry participants was actively involved in the development of the GSN
standard. The 2nd Generation (2G) standard-setting process in Europe was characterized by a high
degree of political behavior. Certain member countries tried to foster acceptance of a standard that was
developed by a manufacturer located in their own country. This proved an obstacle for Ericsson, which
was based in a country that was not yet a European Union member. Ericsson ultimately found it
necessary to forge agreements and joint ventures with both German- and French-based companies.
The cellular carriers or service providers in the United States in the mid-80s were developing similar
concerns regarding the ongoing viability of the ANPS standard. Just a few years after the initial launch of
cellular service in 1983, customer demand had far exceeded expectations.
xxxv
Wireless traffic congestion
was affecting urban areas like Los Angeles and New York. U.S. service providers were aware of and
interested in what was occurring in Europe with the GSN standard. Digital systems were recognized as
offering more efficient use of the available spectrum. Nany equipment suppliers were active participants

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65
in the European standard setting process for GSN. Even Notorola, a U.S.-based equipment manufacturer
that had not serviced the European market in the past, recognized the future potential of GSN and was
participating with the likes of Ericsson, Siemens, Alcatel and Nokia.
The FCC did not choose to mandate a single standard for use in the U.S. !t decided to allow the
industry and the market to determine which wireless digital standard would become dominant. This is
similar to the FCC's strategy for the development of the analog cellular standard in the early 1980s and
reflects the trend away from government-led standards selection, which began in the late 1970s. There
exist two sides to this argument regarding the relative roles of government and industry in technical
standard setting and the function of the marketplace in the absence of clear technological standards. The
first side clearly identifies the benefits of a common technical standard early in the process. !t can
increase price competition and thus demand. !t increases compatibility and interoperability and can
increase the use of the technology, giving the installed base enhanced economic and functional value. At
the same time, standard setting can thwart innovation and entrench an older standard when a newer,
better or more widely accepted technology is available.
The Cellular Telecommunications !ndustry Association (CT!A) was founded in 198+. !t is an
industry-led group consisting of both network operators and manufacturers. The purpose of the CT!A was
to represent its members' interests with policy makers in the Executive Branch, in the Federal
Communications Commission and in Congress. !n addition, it offered its members a certification program
that was unbiased, independent and centralized. The CT!A took an active interest in the 2G standard
setting process in the U.S. !n September 1988, it published a set of User Performance Requirements
(UPR) that encouraged the industry to develop a digital wireless standard with at least ten times the
capacity of current analog networks, in addition to better reliability and quality.
xxxvi
!n January 1989, its
membership voted to endorse the time-based method (TDNA) of digital communications for cellular
systems based on an Ericsson proposal. The technical name for this standard became !S-5+. Numerous
U.S. network operators had tested time-based methods and were comfortable with both the capabilities
and limitations of this technological standard.
xxxvii
For many operators it offered a swift solution to
growing capacity concerns.

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!n late 1988, Qualcomm began work on a code-based signaling method based on spread spectrum.
This technological standard, which came to be known as CDNA, was a significant departure from the
more familiar TDNA-based wireless standard. The process associated with its functioning was complex
and appeared to many industry experts to be beyond the reaches of the current technology.
xxxviii

Nonetheless, believing in CDNA technology, Qualcomm began to introduce key industry players to CDNA
by 1989. Qualcomm's senior management team, led by CEO !rwin Jacobs, launched a campaign
designed to create awareness of CDNA and its benefits.



6.6 THE AUCT!ON PROCESS !NST!GATES CHO!CE


Radio spectrum is a limited commodity that is managed by the federal government. Spectrum for 2G
wireless was allotted in the 1.8 GHz to 2.2 GHz radio frequency band. !n late 1993, the FCC announced
its decision to allocate spectrum to the U.S. market for wireless service providers through an auction
process, with the licenses awarded to the highest bidders. The continental USA was divided into +6
NTAs (major trading areas), with licenses available in each NTA. The main round of auctions was slated
for December 199+, and the FCC received 7+ bid applications for 99 wireless licenses. Since bidding
required detailed information on anticipated costs and revenues, many service operators were forced to
finalize their choice of technical standard in order to participate in the auctions. The FCC, although
imposing very few service requirements on the licenses, did place restrictions on the timeframes for
service deployment.
xxxix
PCS service providers who purchased licenses in the auctions were required to
begin offering service within two years or face possible forfeit of their licenses.
xl
They were also required
to pay half of their spectrum license fee within the first week after receiving the license and the
remaining half within one year.
xli
For national operators who purchased large blocks of spectrum, this
required being ready to pay the FCC extremely large sums of capital quite quickly and further instigated
the industry movement towards digital service. !n total, these initial auctions raised over $7 billion for
the FCC.


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67


6.7 CASE DETA!LS: !NFORNAT!ON SHAR!NG EvENTS CHRON!CLED


This focus of this analysis is on the information sharing actions and events displayed by two key actors,
Ericsson and Qualcomm, and how throughout the standards contest, these emerge as strategies to
influence adoption. Ericsson or Qualcomm was responsible for the development and marketing of the
three competing standards: TDNA, GSN and CDNA. Even though other manufacturers were also
involved in this activity, Ericsson and Qualcomm were the primary drivers of adoption. !t is through their
actions that each of these standards was involved in the standard setting processes during 1988-2000.
Since the advent of 2G wireless alters the traditional national market approach, which was common
throughout the 1980s, it will be enlightening to also include certain aspects of the European 2G standard
setting process, as events that occurred there are influential on the outcome in the U.S., especially in
relation to the GSN standard.

6.7.1 Ericsson promotes GSN


The Standards contest for GSN officially began in Stockholm in 1982. Representatives, including network
operators, wireless equipment manufacturers, universities and governments from 11 European countries,
gathered at an inaugural meeting for the development of the GSN technical standard. This was the first
and most important part of the standards contest for Ericsson, as having their technical design accepted
as the European Standard would be the foundation upon which all the remaining competition would build.
Over the next five years, the system requirements and technical details of the standard were defined.
Eight prototype systems were evaluated, with the results presented at a landmark plenary session in
February 1987. The GSN standardization process was politically driven, with the governments of the
European Union actively involved in the design, development and selection of a 2G wireless standard.
The evaluation process utilized in the selection of GSN consisted of both political compromise and
engineering assessment, with influences arising from national vested interests for one version of a
standard over another.
xlii
The technology selection process most closely followed the institutional

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68
strategy described earlier by van de ven. Firms, distributors and regulators influenced the selection
among alternatives, and selection was based on both technical and non-technical aspects of the
standards.
Ericsson particularly influenced this phase of the European 2G standard setting process. Even
though the process was controlled by governments, there still existed the same relationship building and
support solicitation evident within a de facto or market-based process. Both the French and West
German governments strongly subsidized the development of suitable technology, hoping to ensure a
lead position for their national industries. They were strongly advocating proposals designed for areas of
high population density. Other members were keenly interested in less complex technologies designed to
operate in areas of medium density. !n late 1986, Ericsson issued a proposal that bridged these
differences, and this was advocated by many of the actors in the decision process. However, it quickly
became evident that France and West Germany, both critical to the acceptance of Ericsson's proposal,
would not back this decision since the proposal did not come from a French or West German company.
Ericsson quickly reacted by negotiating agreements with LTC, a French network operator, and Siemens, a
large West German manufacturer. Ericsson agreed to an exchange of technology with LTC and forged a
cooperative development agreement with Siemens.
xliii
Geroski (2000) describes how a critical few can
influence the process of choice, and when these actors accept a technology, the bandwagon effect can
begin. This process generally happens through relationships that facilitate the persuasion, negotiation
and coordination of key adopters. Ericsson forged and employed direct relationships with both LTC and
Siemens that enabled the transfer of the critical information that tipped the balance in its favor.
This process of directly imparting information through relationships or employing information
cascades, endured as the government of West Germany continued to have difficulty accepting the
development of the technical features associated with the GSN standard. Diplomatic efforts were
employed once again in early 1987 among the heads of state of the United Kingdom, West Germany,
France and !taly. Once again, strategic information sharing was used to sway West Germany that it was
best to act in the interests of the deployment of GSN rather than in the interest of its own industries.
xliv

GSN, based largely on Ericsson's proposed TDNA technology design, became the standard of choice for

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69
the European Community. This example of strategic information sharing at a critical juncture in the GSN
standard setting process is evidence of the impact that information cascades can have on key adopters'
actions.
Once Ericsson's version of the GSN standard became the accepted choice by Europe, there was
worldwide recognition that sufficient demand would be available to justify the manufacture of equipment.
This generated interest in the use of the GSN standard in much of the world, including the U.S. !n the
late 1980s and early 1990s, cellular service providers in the U.S. were very much aware of the standard
setting and development activities going on in Europe and were beginning their own inquiries regarding
the move from 1G to 2G wireless standards. Previously, the U.S. market for wireless services could be
characterized as having smooth, continuous growth.
xlv
All networks were using the ANPS standard,
giving rise to great economies of scale. Spectrum limitation issues began to occur in dense urban cores
like the city centers of New York and Los Angeles. The CT!A took up the development of new technology
to combat capacity shortages in wireless networks.

6.7.2 Ericsson Wins Again with TDNA


An offshoot of the CT!A, the T!A (Telecommunications !ndustry Association) is a supplier's trade
organization for wireless networks. The T!A endorsed the development of a TDNA standard. !ts primary
concern was to have a standard compatible with current architecture to minimize upgrade problems.
Ericsson's TDNA !S-5+ offered the benefits of three-fold increased capacity and a seamless transition
path. !t did not contain all the same features and functionality that GSN offered but was based on the
original Ericsson proposal for GSN. Therefore, in the U.S. market, Ericsson became a strong supporter of
TDNA and throughout both the development and adoption stages of the standard setting process,
attempted to convince key actors of its superiority over CDNA.
Ericsson also remained a strong advocate of the GSN standard, and along with Siemens, Notorola
and Nokia, dominated the supply side of the market for both GSN terminals and infrastructure well into
the mid 1990s.
xlvi
Nost manufacturers eventually agreed to develop product for all competing standards,
even CDNA, but Ericsson continued to only support TDNA !S-5+ and GSN.
xlvii
Ericsson felt there was little

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70
risk that any standard developed would surpass the benefits of its GSN version, and it continued to
publicly advocate adoption of GSN to service providers worldwide through a constant barrage of white
papers and press releases.
xlviii


6.7.3 TDNA Takes the Lead


Throughout the development of the CDNA standard by Qualcomm, Ericsson carried out a campaign
aimed at discrediting it. Ericsson utilized a broadcast campaign comprised of fear, uncertainty and
doubt. This campaign created noise and confusion in the environment. At critical junctures in the
development of CDNA, Ericsson attempted to discredit the superiority claims being made by Qualcomm.
!t issued numerous public statements between 1992 and 199+, the critical juncture for CDNA, disputing
the claimed advantages of CDNA.
xlix
During this period, Qualcomm was having difficulty delivering on
some of its promises regarding the readiness of CDNA. Ericsson and other advocates of both the GSN
and TDNA standards exploited this weakness through public statements that identified GSN and TDNA as
¨proven technologies ready for deployment," whereas they suggested that CDNA was still ¨many months
away from being deployable."
l
Ericsson issued a series of white papers that warn of possible technical
problems with CDNA. One of these papers in particular concluded there were no capacity or voice quality
differences between CDNA and GSN.
li
Proof of the effectiveness of this Ericsson-led information-sharing
plan was the failure once again of the CT!A to endorse CDNA in January 1992.
As a concession, the CT!A announced an open forum for the purpose of reviewing the opportunity
for a wideband spread spectrum technology like CDNA to be approved. Ericsson took this opportunity to
continue its campaign to discredit CDNA and, in an attempt to delay the process of accreditation by the
CT!A, argued over details of the components of the standard at every opportunity. !t voted against
supporting the CDNA standard at an April 16th meeting of the CT!A, where 21 voted in favor, + voted
against and 2 abstained.
lii
Finally, recognizing how important it was for Qualcomm to have a major
manufacturer on board in order to entice the commitment and support of network operators, Ericsson
refused to develop CDNA equipment in the hope that this lack of support would signal to the 2G wireless

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world its skepticism regarding Qualcomm's claims and convince other equipment manufacturers to
withhold support for CDNA.
The momentum for TDNA in the U.S. market became recognizable in early 1992. Rapidly following
the failure of the CT!A to endorse CDNA, Southwestern Bell (SBC) signaled its commitment to TDNA and
announced its intention to order TDNA equipment from Ericsson. Later that same year, NcCaw Cellular
(now AT8T Wireless) also announced its intent to commit to TDNA and deploy infrastructure in its Florida
markets in early 1993. Ericsson spent millions of dollars throughout 1992 highlighting the benefits of
TDNA and GSN in the trade press and on industry forums.
liii
This momentum slowed, however, when
Ameritech announced the results of its market and technology trial for TDNA in mid-1993. Ameritech
publicly backed away from the TDNA standard and outlined a number of issues that convinced it to
support CDNA.
liv

During the earlier years of the standard setting process, Ericsson focused on the promotion of the
TDNA standard into the U.S. market. As the results of the market and technical trials, such as
Ameritech's, began to suggest that TDNA had operational issues, Ericsson shifted the focus of its U.S.
promotional efforts from TDNA to GSN. Throughout the process, however, Ericsson's primary message
was disbelief in CDNA claims, concentrating its campaign of fear, uncertainty and doubt during the time
period of 1992-1993, which is post-development stage.

6.7.+ Ericsson Signs up Support for both TDNA and GSN


Overall, Ericsson was able to sway the major network operators NcCaw Cellular, Southwestern Bell,
Western Wireless and Bellsouth to use TDNA and GSN. Of these, the most significant is AT8T Wireless,
the largest cellular carrier at 78.757 million points of presence (POPs).
lv
The manufacturers that
committed to support GSN due to its level of global acceptance, also publicly stated their support for
TDNA through press releases and white papers very early on in the adoption stage. These
manufacturers were Northern Telecom (Nortel), Nokia and Notorola. There is no evidence available
suggesting that a personal relationship between any of these manufacturers and Ericsson was the reason
behind their support of these standards. Rather, it can be assumed that due to GSN's global popularity

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72
and the CT!A's endorsement of TDNA, the decision to develop infrastructure equipment and handsets for
these standards was a fait accompli.
Between 199+ and 1997, numerous press releases announced the above network operators'
commitment to TDNA or GSN, based on their availability and proven performance. Pacific Bell signed a
$300 million deal with Ericsson for purchase of GSN equipment; Omnipoint launched GSN-based service
in November of 1996; and AT8T announced a rollout of commercial service based on TDNA in December
of 1996. Within the U.S., this stage culminated with the formation of the GSN alliance group, a
consortium of 7 regional GSN operators who supported GSN. Their focus was on promoting GSN
technology and improving the roaming agreements between various GSN carriers in order to improve the
ease of use for the end user.

6.7.5 Qualcomm and CDNA


Qualcomm began work on the CDNA standard in 1988 and, until 1995, endeavored to alter the
perception of network operators worldwide that CDNA was complex and risky, into regard for CDNA as
proven and accepted. Since CDNA was a revolutionary change for U.S. service operators, and a less risky
path existed to transition to either TDNA !S-95 (!S-136) or GSN, Qualcomm had to highlight the benefits
of CDNA and dissipate the momentum that TDNA or GSN had with manufacturers and service providers.
!t became necessary for Qualcomm to develop an information-sharing strategy to encourage both
manufacturers and service providers to fully support CDNA. Qualcomm's basic message to the industry
was as follows: CDNA was the future, investing in it now will give you an advantage in time to market,
we will reduce your risk through allowing you to try the technology before you buy it, and we will
continue to support all your technical needs.
lvi

CDNA was considered a complex technical standard because its use of spread-spectrum technology
was a complete departure from other wireless technologies available in the late 1980s. Educating
potential adopters regarding the unique aspects and proposed benefits of CDNA required the transfer of
large amounts of rich qualitative information. This required personal relationships and repeat interactions
in order for the full intent of the message to be delivered. Communicating to key adopters the technical

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specifications and abilities of the CDNA standard necessitated the utilization of a cascade information
sharing strategy.
!n February 1989, Qualcomm began influencing key adopters. !t identified and undertook
personal visits to a few key network operators, PacTel Cellular, the cellular division of Pacific Telesis;
Ameritech, with head office in Chicago; and NYNEX, servicing New York. All three operators' serviced
densely populated areas with high capacity requirements. CDNA's superior capacity claims seemed ideal
for their needs. !n addition, Qualcomm identified PacTel as an operator that possessed a reputation for
innovativeness, and was known to possess doubts regarding the long term functionality of the recently
approved TDNA !S-95 standard. PacTel was also located in close proximity to Qualcomm's San Diego
office. !rwin Jacobs, CEO of Qualcomm, visited chief engineers and senior management at PacTel on
more than one occasion throughout 1989, introducing them to CDNA, identifying the planned benefits
associated with the standard and building a relationship that would be critical to the success of CDNA in
the future.
lvii
This resulted in a form of commitment by PacTel to CDNA; they agreed to provide funding
of $2 million for the further development of the technology in return for Qualcomm's commitment to a
live trial of the technology in San Diego in November 1989.
lviii

!n July 1990, failing a more formalized mechanism for the development of a detailed technical
description of a standard, Qualcomm released its "Green Book" - a compilation of draft standard
specifications - and requested feedback from CDNA supporters. Throughout 1989 and 1990, Qualcomm
senior executives were constantly in the news media proclaiming ¨CDNA is superior" and ¨CDNA is ready
to go." Recognizing that certain international markets held tremendous opportunity for wireless
communications and the importance of obtaining as many supporters as possible in a short time period,
Qualcomm invited numerous international governments and operators to demonstrations and symposia in
late 1989. The government of South Korea identified itself as a likely early adopter of CDNA technology,
and Qualcomm sent senior representatives there to make a series of presentations in mid- to late 1990
that described CDNA technology as the optimum choice to meet that country's unique capacity needs.
This effort was rewarded when in late 1991; Qualcomm and the Korean government announced a joint
development agreement for CDNA in South Korea worth $17 million.
lix


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74
A key tactic in a standards war is the management of expectations. The most direct way to
manage expectations is by assembling allies and making grand claims about your product's future or
current popularity (Shapiro 8 varian, 1999). !n conjunction with information cascades, we see
Qualcomm attuned to the management of expectations as it began to take the CDNA message to a
broader audience and incorporate the use of broadcast techniques in the communication of a
straightforward message: CDNA is the best commercial alternative for the 2G wireless market. !n June
1989, !rwin Jacobs gave a presentation on CDNA to the CT!A standards committee, attempting to begin
the process of delivering the benefits of the standard to the larger community. !n Fall 1989, Qualcomm
hired a public relations firm to develop an awareness campaign for CDNA, which resulted in a senior level
representative from Qualcomm speaking about CDNA at every industry conference and symposium
through the remainder of 1989.
lx
Another broadcast technique employed by Qualcomm was live
demonstrations, conducting live trials in both San Diego and New York. !t used these to showcase the
abilities of the technology and invited manufacturers and network operators to attend. These
demonstrations signaled to potential adopters the commercial viability of this revolutionary standard.
Qualcomm recognized that no network carrier would likely invest in a technology that could only be
provided by a single source, and that one of its key adopters would therefore need to be an equipment
manufacturer. The endorsement by PacTel prompted Notorola to join Qualcomm and PacTel in a
development agreement for CDNA technology as early as 1989. This activity resulted in Notorola's
becoming an early licensee of Qualcomm's CDNA in mid-1990. Northern Telecom and AT8T Networks
also became early licensees of CDNA, influenced by Ameritech's and Nynex's early support of CDNA.
lxi

That these equipment manufacturers let their support be known was an important signal of CDNA's
legitimacy.

6.7.6 Qualcomm Spreads the Nessage


Qualcomm was undeterred by its failure to obtain CT!A endorsement for CDNA in January 1992.
!mmediately following the CT!A's announcement, Qualcomm accelerated its information sharing strategy,
with !rwin Jacobs publicly stating his commitment to have CDNA commercially viable within 12 months.
lxii


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75
!n Nay of that year, Qualcomm and PacTel launched an aggressive public relations campaign targeted at
network operators. Their focus was twofold: to assure the industry that CDNA remained a viable option
and to influence the outcome of the CT!A's open forum process on a wideband spread spectrum
technology.
!n August 1992, US West New vector announced it will adopt CDNA technology and sign purchase
agreements for equipment with Notorola and Northern Telecom (Nortel). Quickly following, Bell Atlantic
Nobile (BANS) announced its intent to use CDNA. Both PacTel and Ameritech strongly advocated
support for CDNA at the CT!A board meetings in Narch and July 1993, resulting in the CT!A's
endorsement of !S-95 as an interim CDNA standard.
Whereas Ericsson effectively used trade associations and technical committees to promote GSN
and TDNA, Qualcomm avoided these venues and relied heavily on its alliance partners and supporters for
continued diffusion of its message. !n late 1993, Qualcomm formed the CDNA development group,
consisting of key supporters of CDNA in the U.S., in order to continue spreading the CDNA message in
the U.S. and globally.
lxiii


6.7.7 Support for CDNA Continues


199+ brought the PCS Auctions and the network operators' open commitment for their standards choices.
Upon completion of the AfB block PCS auctions, CDNA emerged as the leading digital wireless technology
in the U.S. marketplace. Nost significant was the choice by Sprint Telecommunications venture to use
CDNA. After the auctions, Sprint Spectrum held 163 million POPs, making it the largest provider of
wireless service in the U.S. market, and it announced in July 1995 that it would deploy CDNA technology
because it represented the best long-term solution for a seamless national wireless network. "Sprint
Telecommunications venture has selected CDNA as the best technology for its customers, and has
selected NortelfQualcomm because of our product architecture and CDNA network expertise," said !rwin
Jacobs. Even though this announcement was a broadcast directed at the industry, many prior personal
visits by Jacobs to Sprint senior engineers were considered very convincing and a large factor in Sprint's
technology choice.
lxiv
Other important companies that selected CDNA were BANS, Nynex, US West and

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PacTel, which formed the consortium PCS PrimeCo. They announced their support in June 1995 and
boasted the third largest wireless market holdings at 60 million POPs. Finally, GTE Nobilenet, which
provided wireless service to 21 million POPs, also announced its intention to deploy CDNA. !n late 1995,
Qualcomm claimed that CDNA was becoming the dominant choice for wireless service providers in the US
market.
lxv

Nore triumph for Qualcomm came at the end of 1995, when the first commercial CDNA system
was launched in Hong Kong. Although Hong Kong has one of the world's most difficult terrains and
congested radio frequency environments, the network delivered outstanding performance. Jack Scanlon,
executive vice president and general manager of Notorola's Cellular !nfrastructure Group, said, "The
successful deployment of the CDNA Networks in Hong Kong is proof that CDNA will work well anywhere
in the world." !n addition, South Korea announced the launch of its commercial CDNA network in
December 1995. Finally, in late 1996, both Sprint PCS (previously STv) and PrimeCo launched
commercial service in the U.S. !n 1997, China placed a $300 million order for Qualcomm CDNA phones.

6.7.8 Who Won - Post 1996


As of February 1997, 1+¾ of the U.S. market was covered by TDNA technology, 2+¾ by GSN, and 5+¾
by CDNA. The only significant player to select and deploy TDNA, AT8T Wireless, opted for this choice
primarily to gain first mover advantages in the market. As of 2000, it was still gaining subscribers and
considered a powerhouse in the U.S. wireless market, but the growth in wireless data and the migration
path to an effective 3rd generation technology were beginning to prove its TDNA choice an impediment.
Even though GSN was not a big winner in the U.S. market, by 2000 it was deployed and operating in
over 108 countries, totaling more than 166 million subscribers. CDNA, although declared the winner by
many in the U.S., had operations in fewer than half as many countries and claimed only 21 million
subscribers.
Qualcomm was able to successfully alter the perception of CDNA as unproven, risky and ill-suited
to the needs of wireless service operators, enabling CDNA to obtain commercial success and dominate
both GSN and TDNA in the U.S. A large part of this success may be attributed to the timing, content and

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delivery of information and linking of numerous events and actions into a strategy to influence adoption.
Herschel Shosteck, an industry economist, suggested that Qualcomm ¨overcame what should have been
fatal disadvantages with brilliant public relations" (1997). The relationships it forged and the messages
it communicated were important to the process of influencing critical key adopters. The final testament
to its success was Ericsson's offer to buy the Qualcomm !nfrastructure Division in Narch 1999, a move
that legitimized the important role CDNA plays in the wireless world.










Figure 7. Technology sponsors and their key relationships
Network of Relationships – When Commitment Occurs
Qualcomm
Pacific Telesis / AirTouch
Ameritech
Nynex
US West
Bell Atlantic Mobile
Sprint Technology Ventures
Ericsson
Southwestern Bell
McCaw / AT&T
Bell South
Pacific Bell
American Personal Communications
MCI / Nextel
OmniPoint
1990
1992 - 1993
1995
1992 - 1993
1994
1995 - 1996
Qualcomm
Pacific Telesis / AirTouch
Ameritech
Nynex
US West
Bell Atlantic Mobile
Sprint Technology Ventures
Ericsson
Southwestern Bell
McCaw / AT&T
Bell South
Pacific Bell
American Personal Communications
MCI / Nextel
OmniPoint
1990
1992 - 1993
1995
1992 - 1993
1994
1995 - 1996

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Figure 8. !ndicators of size and influence
$2 100 145 $13 600 Sprint
$73
$158
0
$82
$398
$1 100
$1 600
Paid in MTA
auction (millions)
57 $41 600 *PCS PrimeCo
7
8
0
11
19
107
Population
acquired in
auction (millions)
$13 900 SBC
$15 000 Ameritech
$18 000 MCI
$19 000 BellSouth
$21 000 GTE
$45 400 AT&T wireless
1996 Gross
Revenue
(millions)
$2 100 145 $13 600 Sprint
$73
$158
0
$82
$398
$1 100
$1 600
Paid in MTA
auction (millions)
57 $41 600 *PCS PrimeCo
7
8
0
11
19
107
Population
acquired in
auction (millions)
$13 900 SBC
$15 000 Ameritech
$18 000 MCI
$19 000 BellSouth
$21 000 GTE
$45 400 AT&T wireless
1996 Gross
Revenue
(millions)
Sources: Garrard, Garry, “Cellular communications: Worldwide market development ; FCC website, “How
the players rate”, Telephony, Jun2 1997
*Revenues for PCS PrimeCo are compiled from individual revenues for PacTel, Bell Atlantic, Nynex and US
West

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7.0 RESULTS




7.1 PATTERNS !N THE DATA


The following charts contain, in chronological order, the information-sharing events documented for the
case studies. Tables 5 and 6 identify those information-sharing events associated with the CDNA
standard and influenced by Qualcomm. Table 5 provides additional details within the data according to
the four elements of the strategy: timing, message, media, and target. Table 6 displays an aggregated
version of the same data. Tables 7 and 8 focus on the information-sharing events connected to the
TDNA and GSN standards and influenced by Ericsson. Table 7 provides the additional details associated
with the elements of the strategy, while Table 8 presents an aggregated version of the actions and
events.
Certain patterns are evident. The most obvious is a preponderance of cascade information-sharing
events early in the standard setting process. This result supports the first proposition: technology
sponsors seeking to influence key adopters in a standards contest will rely more heavily on the use of
cascade information sharing during the standard's development phase. !t also supports the logic behind
this prediction: firms require the use of personal relationships in order to deliver the complex and
ambiguous messages characteristic of a technology in its development phase. Therefore, these cascade
events are based on the exploitation of relationships and occur via strong ties. They generally involve
visits to share or develop detailed specifications for the standard or to discuss agreements for funding or
joint development. !n some cases, complex information is delivered via a written specification that is
transferred amongst firms.
Broadcast information sharing is primarily utilized in the latter part of the standards process,
supporting the second proposition: technology sponsors seeking to influence key adopters in a standards

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contest will rely more heavily on the use of broadcast information sharing when the technical standard
has reached the adoption phase. The broadcasting of information almost always occurs through an
intermediary or a weak tie and generally involves making claims regarding the standard's abilities. The
primary vehicles for delivery are press releases and industry speeches. !nitially, the claims mainly
communicate the benefits of the standards being championed. The positive results of technical and
market trials are communicated, and posturing surrounding market readiness and technical superiority is
displayed by technology sponsors. !n some cases, the messages attempt to discredit a competitive
standard by identifying its weaknesses. As the standards eventually approach commercial viability, the
intent of the message begins to shift towards identification of an adopter's support of a particular
standard. When the message communicated becomes associated with commercial deployment, an even
greater emphasis is placed on broadcast information sharing, with the standard sponsors identifying their
supporters and successful commercial launches.
As can be seen from the detailed depictions of the information-sharing events, the target of
influence, although originally considered an important element of the strategy, does not appear to be a
core component of determining whether an action or event should be delivered via a cascade or
broadcast methodology. Key adopters, the primary target, receive a mix of cascade and broadcast
information sharing throughout the study period. There is a trend of more initial contact with key
adopters and later contact with the overall industry, but when messages are directed at the market or the
industry, the most efficient and effective way to deliver a message to such a potentially diverse and
broad target is through broadcast. Therefore, it seems logical that the key determinant of how an action
or event should be transferred appears to be aligned with the message content and the timing of
delivery. These two elements of the strategy combine to determine the most appropriate method of
conveyance.
A given message's intent is categorized in the detailed data chart to be either informative or
persuasive, but it may actually be both simultaneously. The majority of the information sharing events
identified can be either directly or indirectly construed as persuading key adopters. This also seems a
logical conclusion since the essence of a standards contest is persuading key participants to adopt a

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technology, and influencing them to select one technology over any others is a central goal of a
technology sponsor's information-sharing strategy. Therefore, even if the primary function of an action
or event is apparently to inform the target, there is generally an underlying intention to also persuade.
This appears true without regard to the timing of delivery, content of message, or type of media.

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Table 5. !nformation sharing events - detailed version: Qualcomm promotes CDNA
Timing
Qualcomm and CDMA information sharing
events / activities 1989 - 1997 Message Content
Message
Complexity
Message
Intent Media Type Target Media Strategy
Jan-89 CTIA endorses TDMA legitimization of TDMA simple inform press release industry Broadcast
Feb-89 Qualcomm management visit Pactel management
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Mar-89 Qualcomm management visit Ameritech management
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Apr-89
Qualcomm hires PR firm to develop awareness
campaign future benefits of technology simple persuade
press releases and
speeches key adopters Broadcast
Apr - Nov
1989
Qualcomm senior level representatives speak about
CDMA at industry conferences/symposiums future benefits of technology simple persuade industry speeches key adopters Broadcast
Jun-89 Irwin Jacobs gives presentation at CTIA future benefits of technology simple persuade industry speech industry Broadcast
Jul-89
PacTel agrees to provide $2M to Qualcomm for further
development of CDMA
technical and strategic design
issues complex inform face to face meeting single adopter Cascade
Jul-89 Qualcomm executives visit NYNEX
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Oct-89 Qualcomm executives visit Ameritech
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Nov-89
Live demonstration at Qualcomm work site,
manufacturers and operators attend operational issues simple persuade technical trial key adopters Broadcast
Dec-89
Qualcomm / PacTel l/ Motorola reach development
agreement
technical and strategic design
issues complex inform face to face meeting key adopters Cascade
Feb-90 Qualcomm & NYNEX conduct live trial in New York operational issues simple persuade technical trial key adopters Broadcast
Mar - Sept
1990
AT&T, NYNEX, Ameritech, Motorola and PacTel commit
$30M in further funding for continued development of
CDMA
technical and strategic design
issues simple inform face to face meeting key adopters Broadcast
Jul-90
Qualcomm distributes Green Book of CDMA to partners
and advocates which outlines standard specifications
and invites input and feedback
technical and strategic design
issues complex inform
intra-group
communication key adopters Cascade
Sep-90
Qualcomm senior executive makes series of presentation
to Korean government (ETRI and MoC) promote technology complex persuade face to face meeting single adopter Cascade
May-91
Qualcomm and ETRI reach Joint development
agreement technical design issues complex inform face to face meeting single adopter Cascade
Oct-91
Qualcomm distributes Gold Book of CDMA standard
specifications to partners / advocates- final document
after revisions final design specifications complex inform
written
communication key adopters Cascade
Nov-91
Trial of CDMA in San Diego - full fledged cellular network
- in conjunction with PacTel operational issues simple persuade technical trial key adopters Broadcast
Dec-91 Qualcomm IPO raises $68M investment support simple inform press release industry Broadcast
Dec-91
Dr Irwin Jacobs CEO of Qualcomm publicly states that
"all questions regarding CDMA have been put to rest" operational readiness simple persuade press release key adopters Broadcast
Jan-92 CTIA fails to endorse Qualcomm's CDMA lack of industry support simple inform press release industry Broadcast
Jan-92
Qualcomm CEO Irwin Jacobs publicly states that CDMA
will be commercially available in 12 months operational readiness simple persuade press release key adopters Broadcast
May-92
Aggressive PR by Qualcomm / PacTel /Motorola
targeted at network operators operational readiness simple persuade press release key adopters Broadcast
Jun-92
Ameritech launches 18 month market and technology
trial of both TDMA and CDMA technical and market issues simple inform press release key adopters Broadcast
Aug-92
US West New Vector announce they will adopt CDMA
and sign purchase agreements with Motorola and
Northern Telecom support from key adopter simple persuade press release key adopters Broadcast
1992
Qualcomm invests millions in communicating the
benefits of CDMA in trade press and industry forums benefits of technology simple persuade press release key adopters Broadcast



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Timing
Qualcomm and CDMA information sharing
events / activities 1989 - 1997 Message Content
Message
Complexity
Message
Intent Media Type Target Media Strategy
Mar-93 BAMS announces they will use CDMA support from key adopter simple persuade press release key adopters Broadcast
Mar-93
Pactel and Ameritech support CDMA at CTIA board
meeting support from key adopters complex persuade face to face meeting industry Cascade
Jun-93
US West claims it will have CDMA up and running in its
Seattle market by late 1994 support from key adopter simple persuade press release key adopters Broadcast
Jul-93
Ameritech backs away from TDMA, claims market and
technology trial does not support adoption of TDMA legitimization of CDMA simple persuade press release key adopters Broadcast
Jul-93
CTIA endorses Qualcomm's CDMA as an interim
standard IS-95 legitimization of CDMA simple inform press release industry Broadcast
Dec-93
CDMA development group formed - 17 companies -
press release identifies capacity benefits of CDMA benefits of technology simple inform press release industry Broadcast
Dec-93
CDMA development group - acts as mechanism for
sharing information and building relationships
network of relationships for
Qualcomm complex persuade
ongoing
communication group members Cascade
Jan-94
Thomas Crawford, Director of marketing at Qualcomm -
press release stating "CDMA is ready to go" technology readiness simple persuade press release key adopters Broadcast
1994
Qualcomm makes public claims via press releases, news
media, speeches regarding the technical superiority of
CDMA benefits of technology simple persuade
press releases and
speeches key adopters Broadcast
Dec-94
Qualcomm and Northern Telecom sign agreement for the
joint manufacture of infrastructure equipment for CDMA
equipment development
issues complex inform face to face meeting single adopter Cascade
Dec-94 Digital Spectrum Auctions - $7B raised
triggers industry wide
adoption simple inform industry event industry Broadcast
Jun-95 PCS PrimeCo announce they will use CDMA support from key adopter simple inform press release industry Broadcast
Jul-95
Sprint Technology Ventures (STV) publicly supports their
choice of CDMA support from key adopter simple persuade press release industry Broadcast
Oct-95
Hutchinson Telephone of Hong Kong announces launch
of first commercial CDMA network infrastructure deployed simple inform press release
market & key
adopters Broadcast
Oct-95
Qualcomm claims that Sprint, GTE, Ameritech, AirTouch,
Bell Atlantic, NYNEX and US West are all committed to
the commercial use of CDMA industry support simple persuade press release key adopters Broadcast
Dec-95
South Korea announces launch of commercial CDMA
network infrastructure deployed simple inform press release
market & key
adopters Broadcast
Jan-96
STV requests Motorola to provide last minute financial
guarantees in case of system failures for CDMA roll-out
lack of support from key
adopter simple inform press release industry Broadcast
Jan-96
Motorola refuses to provide guarantees to STV; Nortel /
Lucent agree to performance guarantees support from key adopter complex persuade face to face meeting group of adopters Cascade
Feb-96
Qualcomm claims 10 of top 14 Cellular operators have
committed to CDMA industry support simple persuade press release key adopters Broadcast
Mar-96
CDMA development group announce deployment of
CDMA in India, China, Brazil, Indonesia and Russia infrastructure deployed simple persuade press release key adopters Broadcast
Nov-96
STV commits to massive launch with CDMA prior to year
end support from key adopter simple inform press release industry Broadcast
Nov-96
Primeco announces it will launch CDMA service in
several markets support from key adopter simple persuade press release key adopters Broadcast
Feb-97 China places $300M order to Qualcomm CDMA phones support from key adopter simple inform press release key adopters Broadcast


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Table 6. !nformation sharing events - aggregated version: Qualcomm promotes CDNA
Jan-89 CTIA endorses TDMA Broadcast
Feb-89 Qualcomm management visit Pactel management - series of meetings ensues throughout 1989 Cascade
Mar-89 Qualcomm management visit Ameritech management Cascade
Apr-89 Qualcomm hires PR firm to develop awareness campaign Broadcast
Apr - Nov 1989 At every industry conference or symposium, Qualcomm sent senior level representatives to speak about CDMA Broadcast
Jun-89 Irwin Jacobs gives presentation at CTIA Broadcast
Jul-89 PacTel agrees to provide $2M to Qualcomm for further development of CDMA Cascade
Jul-89 Qualcomm executives visit NYNEX Cascade
Oct-89 Qualcomm executives visit Ameritech Cascade
Nov-89 Live demonstration at Qualcomm work site, manufacturers and operators attend Broadcast
Dec-89 Qualcomm / PacTel l/ Motorola reach development agreement Cascade
Feb-90 Qualcomm & NYNEX conduct live trial in New York Broadcast
Mar - Sept 1990 AT&T, NYNEX, Ameritech, Motorola and PacTel commit $30M in further funding for continued development of CDMA Broadcast
Jul-90 feedback Cascade
Sep-90 Qualcomm senior executive makes series of presentation to Korean government (ETRI and MoC) Cascade
May-91 Qualcomm and ETRI reach Joint development agreement Cascade
Oct-91 Qualcomm distributes Gold Book of CDMA standard specifications to partners / advocates- final document after revisions Cascade
Nov-91 Trial of CDMA in San Diego - full fledged cellular network - in conjunction with PacTel Broadcast
Dec-91 Qualcomm IPO raises $68M Broadcast
Dec-91 Dr Irwin Jacobs CEO of Qualcomm publicly states that "all questions regarding CDMA have been put to rest" Broadcast
Jan-92 CTIA fails to endorse Qualcomm's CDMA Broadcast
Jan-92 Qualcomm CEO Irwin Jacobs publicly states that CDMA will be commercially available in 12 months Broadcast
May-92 Aggressive PR by Qualcomm / PacTel /Motorola targeted at network operators Broadcast
Jun-92 Ameritech launches 18 month market and technology trial of both TDMA and CDMA Broadcast
Aug-92 US West New Vector announce they will adopt CDMA and sign purchase agreements with Motorola and Northern Telecom Broadcast
1992 Qualcomm invests millions in communicating the benefits of CDMA in trade press and industry forums Broadcast
Mar-93 BAMS announces they will use CDMA Broadcast
Mar-93 Pactel and Ameritech support CDMA at CTIA board meeting Cascade
Jun-93 US West claims it will have CDMA up and running in its Seattle market by late 1994 Broadcast
Jul-93 Ameritech backs away from TDMA, claims market and technology trial does not support adoption of TDMA Broadcast
Jul-93 CTIA endorses Qualcomm's CDMA as an interim standard IS-95 Broadcast
Dec-93 CDMA development group formed - 17 companies - press release identifies capacity benefits of CDMA Broadcast
Dec-93 CDMA development group - acts as mechanism for sharing information and building relationships Cascade
Jan-94 Thomas Crawford, Director of marketing at Qualcomm - press release stating "CDMA is ready to go" Broadcast
1994 Qualcomm makes public claims via press releases, news media, speeches regarding the technical superiority of CDMA Broadcast
Dec-94 Qualcomm and Northern Telecom sign agreement for the joint manufacture of infrastructure equipment for CDMA Cascade
Dec-94 Digital Spectrum Auctions - $7B raised Broadcast
Jun-95 PCS PrimeCo announce they will use CDMA Broadcast
Jul-95 Sprint Technology Ventures (STV) publicly supports their choice of CDMA Broadcast
Oct-95 Hutchinson Telephone of Hong Kong announces launch of first commercial CDMA network Broadcast
Oct-95 CDMA Broadcast
Dec-95 South Korea announces launch of commercial CDMA network Broadcast
Jan-96 STV requests Motorola to provide last minute financial guarantees in case of system failures for CDMA roll-out Broadcast
Jan-96 Motorola refuses to provide guarantees to STV; Nortel / Lucent agree to performance guarantees Cascade
Feb-96 Qualcomm claims 10 of top 14 Cellular operators have committed to CDMA Broadcast
Mar-96 CDMA development group announce deployment of CDMA in India, China, Brazil, Indonesia and Russia Broadcast
Nov-96 STV commits to massive launch with CDMA technology prior to year end Broadcast
Nov-96 Primeco announces it will launch service in several markets using CDMA Broadcast
Feb-97 China places $300M order to Qualcomm CDMA phones Broadcast
Qualcomm and CDMA information sharing events / activities 1989 - 1997





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Table 7. !nformation sharing events - detailed version: Ericsson promotes TDNA 8 GSN
Timing
Ericsson TDMA/GSM information
sharing events & activities 1982 - 1997 Message Content
Message
Complexity Message Intent Media Type Target Media Strategy
1982
Stockholm inaugural meeting for GSM standard -
representatives from 11 countries
technical and strategic design
issues complex inform face to face meeting
government & key
adopters Cascade
1985 Ericsson presents its TDMA based proposal
technical and strategic design
issues complex persuade face to face meeting
government & key
adopters Cascade
1985
system requirements defined, circulated and
endorsed
technical and strategic design
issues complex persuade face to face meeting
government & key
adopters Cascade
1985 development of technical details for GSM begins
technical and strategic design
issues complex persuade face to face meeting
government & key
adopters Cascade
Jun-86
narrowband TDMA design by Ericsson and
broadband CDMA design by SEL/Alcatel are the
technical and strategic design
issues complex persuade face to face meeting
government & key
adopters Cascade
Oct-86
All parties supporting Ericsson proposal with the
exception of French and German governments
technical and strategic design
issues complex persuade face to face meeting
government & key
adopters Cascade
Nov-86
Ericsson goes into a cooperation agreement with
Siemens (German telecommunication
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Nov-86
Ericsson signs a development agreement with LTC
(French telephone operator) for the GSM standard
technical and strategic design
issues complex persuade face to face meeting single adopter Cascade
Feb-87
GSM standard to be based on Ericsson TDMA
proposal
initial support from key
adopters complex inform face to face meeting
government & key
adopters Cascade
1987 - 1991 GSM standard details defined operational issues complex inform face to face meeting
government & key
adopters Cascade
Jan-89
In the U.S. CTIA endorses TDMA version of a
digital standard based on Ericsson's GSM proposal legitimization of TDMA simple inform press release industry Broadcast
1991
Ericsson continues to publicly state at every
opportunity their disbelief in the claims being made discredit CDMA simple persuade
speeches, conferences,
interviews key adopters Broadcast
Feb-91
Los Angeles Cellular Telephone Co. publicly
commits to TDMA; orders equipment from Ericsson support from key adopter simple inform press release key adopters Broadcast
Jul-91
Ericsson and GE mobile enter discussions to build
a dual-mode handset with analog and TDMA final design specifications complex inform written communication key adopters Cascade



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Timing
Ericsson TDMA/GSM information
sharing events & activities 1982 - 1997 Message Content
Message
Complexity Message Intent Media Type Target Media Strategy
Jan-92 CTIA fails to endorse Qualcomm's CDMA investment support simple inform press release public at large Broadcast
Jan-92
Southwestern Bell announces it will order TDMA
equipment from Ericsson operational readiness simple persuade press release key adopters Broadcast
Feb-92 First GSM handsets receive interim approval for operational readiness simple persuade press release key adopters Broadcast
May-92
Ericsson and GE mobile announce dual-mode
handset with analog and TDMA technology will be operational readiness simple persuade press release key adopters Broadcast
Aug-92
Ericsson and GE mobile announce delay in launch
of dual-mode handset with analog and TDMA lack of operational readiness simple inform press release key adopters Broadcast
Nov-92
McCaw Cellular announces it will commit to TDMA
standard and deploy in Florida markets in early 93 support from key adopter simple persuade press release key adopters Broadcast
Nov-92 Ericsson and GE mobile launch dual mode handset operational readiness simple persuade press release key adopters Broadcast
1992
Ericsson spends millions to highlight benefits of
their TDMA and GSM standards in trade press and benefits of technology simple persuade press release key adopters Broadcast
Jul-93
Southwestern Bell launches media blitz for its new
TDMA based digital service in Chicago infrastructure deployed simple persuade press release
market & key
adopters Broadcast
Jul-93
Ameritech backs away from TDMA, it announces
market and technology trial doesn't support limitations of technology simple inform press release key adopters Broadcast
Aug-93 AT&T announces takeover of McCaw Cellular for acquisition of key adopter simple inform press release industry Broadcast
Oct - Dec 93
AT&T with Southwestern Bell send out a torrent of
attacks in the trade press, at conventions and on discredit CDMA simple persuade
speeches, press releases
& discussions key adopters Broadcast
Jan-94
MCI announces it will invest $1.3B into Nextel in
order to get into digital game support from key adopter simple inform press release industry Broadcast
Mar-94
Ericsson announces development of new intelligent
base station for GSM standard benefits of technology simple persuade press release key adopters Broadcast
Apr-94
MCI/Nextel announce they will support GSM since
it is a proven technology that is ready to go support from key adopter simple persuade press release key adopters Broadcast
Jun-94
Bellsouth announces support for TDMA due to its
availability and proven performance support from key adopter simple persuade press release key adopters Broadcast
Dec-94 Digital Spectrum Auctions - $7B raised triggers industry wide adoption simple inform press release industry Broadcast
Jun - Dec 94 Ericsson releases a series of white papers aimed discredit CDMA simple persuade written communication key adopters Broadcast
Mar-95 American Personal Communications pledges to support from key adopter simple persuade press release key adopters Broadcast
Mar-95
Pacific Bell agrees to $300M deal with Ericsson for
GSM equipment for deployment in California and support from key adopter simple persuade press release key adopters Broadcast
Nov-96
Omnipoint announces roll out of GSM based
service support from key adopter simple persuade press release
market & key
adopters Broadcast
Dec-96
AT&T attempts to pre-empt competitors and
announces roll out of new digital service based on infrastructure deployed simple inform press release
market & key
adopters Broadcast
Nov-97
Seven regional GSM carriers announce the North
American GSM alliance group formation support from key adopters simple inform press release industry Broadcast
Nov-97
Seven regional GSM carriers form the North
American GSM alliance group
network of relationships for
Ericsson complex inform ongoing communcation group members Cascade





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Table 8. !nformation sharing events - aggregated version: Ericsson promotes TDNA 8 GSN

1982 Stockholm inaugural meeting for GSM standard - representatives from 11 countries Cascade
1985 Ericsson presents its TDMA based proposal Cascade
1985 system requirements defined, circulated and endorsed Cascade
1985 development of technical details for GSM begins Cascade
Jun-86 standard Cascade
Oct-86 All parties supporting Ericsson proposal with the exception of French and German governments Cascade
Nov-86 Ericsson goes into a cooperation agreement with Siemens (German telecommunication manufacturer) for the GSM standard Cascade
Nov-86 Ericsson signs a development agreement with LTC (French telephone operator) for the GSM standard based on its TDMA version Cascade
Feb-87 GSM standard to be based on Ericsson TDMA proposal Cascade
1987 - 1991 GSM standard details defined Cascade
Jan-89 In the U.S. CTIA endorses TDMA version of a digital standard based on Ericsson's GSM proposal for the EU Broadcast
1991 Ericsson continues to publicly state at every opportunity their disbelief in the claims being made about CDMA by Qualcomm Broadcast
Feb-91 Los Angeles Cellular Telephone Co. publicly commits to TDMA; orders equipment from Ericsson Broadcast
Jul-91 Ericsson and GE mobile enter discussions to build a dual-mode handset with analog and TDMA technology Cascade
Jan-92 CTIA fails to endorse Qualcomm's CDMA Broadcast
Jan-92 Southwestern Bell announces it will order TDMA equipment from Ericsson Broadcast
Feb-92 First GSM handsets receive interim approval for global markets Broadcast
May-92 Ericsson and GE mobile announce dual-mode handset with analog and TDMA technology will be available in Aug 1992 Broadcast
Aug-92 Ericsson and GE mobile announce delay in launch of dual-mode handset with analog and TDMA technology until year end Broadcast
Nov-92 McCaw Cellular announces it will commit to TDMA standard and deploy in Florida markets in early 93 Broadcast
Nov-92 Ericsson and GE mobile launch dual mode handset Broadcast
1992 Ericsson spends millions to highlight benefits of their TDMA and GSM standards in trade press and industry forums Broadcast
Jul-93 Southwestern Bell launches media blitz for its new TDMA based digital service in Chicago Broadcast
Jul-93 Ameritech backs away from TDMA, it announces market and technology trial doesn't support adoption of TDMA Broadcast
Aug-93 AT&T announces takeover of McCaw Cellular for $12.6B Broadcast
Oct - Dec 93 AT&T with Southwestern Bell send out a torrent of attacks in the trade press, at conventions and on internet forums against CDMA Broadcast
Jan-94 MCI announces it will invest $1.3B into Nextel in order to get into digital game Broadcast
Mar-94 Ericsson announces development of new intelligent base station for GSM standard Broadcast
Apr-94 MCI/Nextel announce they will support GSM since it is a proven technology that is ready to go Broadcast
Jun-94 Bellsouth announces support for TDMA due to its availability and proven performance Broadcast
Dec-94 Digital Spectrum Auctions - $7B raised Broadcast
Jun - Dec 94 Ericsson releases a series of white papers aimed at discrediting CDMA Broadcast
Mar-95 American Personal Communications pledges to support GSM standard Broadcast
Mar-95 Pacific Bell agrees to $300M deal with Ericsson for GSM equipment for deployment in California and Nevada markets Broadcast
Nov-96 Omnipoint announces roll out of GSM based service Broadcast
Dec-96 AT&T attempts to pre-empt competitors and announces roll out of new digital service based on TDMA Broadcast
Nov-97 Seven regional GSM carriers announce the North American GSM alliance group formation Broadcast
Nov-97 Seven regional GSM carriers form the North American GSM alliance group Cascade
Ericsson TDMA and GSM information sharing events / activities 1982 - 1997



Timing evidently plays a significant role in a firm's decision regarding the type of message to be
communicated, the media chosen for delivery, and therefore the type of information sharing activity. As
these information-sharing events are further analyzed, natural breaks appear within the chronological list
of events and actions based on different characteristics of the message, media, timing, and target. For
example, in 1992 we begin to see service providers declare their support for TDNA, GSN, or CDNA.
Therefore, the message changes to one of postulating support for a choice, the media shifts to more
broadcast, and the target becomes the market or industry in general and undecided adopters. Prior to
this, most of the information-sharing activity was directed at convincing adopters of the technology's

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superiority and involved more cascade sharing. These breaks within the data set facilitate the separation
or categorization of the actions and events into eras.


7.2 !NFORNAT!ON SHAR!NG -THREE S!GN!F!CANT ERAS


Three distinct eras emerge from the data set, each with its own set of characteristics. The movement
from era to era is a natural process associated with the technical development and market readiness of
the technologies. These eras are defined as follows:
• Connection Era: The connection era is characterized by relationship building, mutual interests and
support solicitation. !nformation sharing is directed at a select group of potential influencers or
those in a powerful position within the standard setting process. The messages communicated are
ambiguous and complex. Technology sponsors represent a dominant portion of the information
sharing and are seeking compatibility between the anticipated technical abilities of the standard
and the adopters' unique environments. The connection era begins shortly after the start of the
development phase and continues into the adoption phase.
• Ego Era: The ego era is characterized by boasts about a standard's future abilities. Grand claims
and unfavorable comparisons are used to influence the community at large of potential adopters.
Deliberate messages of fear, uncertainty and doubt are commonly employed to discredit a
competitive standard. The messages communicated in this era are less complex than in the
connection era. There is a mixture of information being shared by both technology sponsors and
adopters. The ego era, though the briefest of the eras, is where the market tips towards one
standard. !t exists strictly within the adoption phase.
• Commitment Era: The commitment era is characterized by adopters' commitment to a particular
course of action. Here a shift occurs, with technology adopters representing a dominant portion of
the information sharing as they select a competing standard and publicly announce their choices.
The message in this era, as in the ego era, is less complex than in the connection era.

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!nvestment occurs, contracts are signed and deployment can begin. This era begins late in the
adoption phase and continues into the diffusion phase.
These eras relate to the 2G standard setting process of Bekkers (2001). The connection era begins
with the existence of a technological prototype or design(s), continues with basic technological decisions
and culminates in technical and market trials. There exists a high degree of uncertainty regarding the
future abilities of the technical standards within this era. This uncertainty requires the gathering of large
volumes of information in order to facilitate the decision making process. Technology sponsors dedicate
significant resources to introducing key actors to the technical possibilities of their own standard and start
to build relationships that they will rely upon to influence the adoption process. They wish to legitimize
the standard in the eyes of key adopters. This process is characterized by communal competition. !n
other words, rivalry among competing technology sponsors exists, but at the same time there is a desire
to gather input from the community of actors on technical, economic and strategic design issues with
scientific emphasis on developing the most superior technical standards possible. Firms that share similar
goals and expectations eventually seek each other, and alliances are formed in order to promote a
particular standard. Development agreements are used to share technological expertise and spread the
risk of failure. The process of cascade information sharing is beginning. The end of the connection era is
signaled through the increase in issues that affect commercialization of the standard(s) and the first signs
of licensing agreements.
The ego era begins with the end of the communal competition associated with the connection era.
Rivalry is now intense. Firms are signaling their commitment to a particular standard through press
releases and aggressive PR campaigns. Broadcast information sharing is predominant. The results of
technology and market trials are being communicated along with the pros and cons of each standard.
Commercial service plans are being developed and there are the first signs of credible commitment
through the announcements of early purchases and procurements of network equipment and handsets.
There exists a significant amount of noise, with an emphasis on convincing the undecided element. This
is where the bandwagon effect begins. The ego era ends with the first signs of formalized support
evident in the marketplace. Firms begin to prefer one standard over another.

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The commitment era begins in the adoption phase, but also continues into the diffusion phase. !n
this era, as firms choose standards, the degree of noise and rivalry in the environment is reduced, yet
there remains a high use of broadcast information sharing identifying launch dates and deployment
schedules. Here deals are brokered, and importance shifts to financial considerations and
implementation issues. Firms shift their focus from convincing other industry actors to persuading the
end user, and there is a rise of advertisements for new products and services. !t is within this era that
the market will tend to tip towards one particular standard in the presence of network externalities.












Figure 9. Stages of standard development and eras of information sharing






GSM 1979
TDMA 1988
CDMA 1988
*GSM E 1992
**GSM US 1996
TDMA 1993
CDMA 1996
*GSM E 1986
**GSM US 1994
TDMA 1989
CDMA 1989
2G wireless standards – The Stages of Standard Development and the
ERA’s of Information Sharing
GSM 1982
TDMA 1989
CDMA 1989
GSM US 1993
TDMA 1992
CDMA 1992
*GSM US 1996
TDMA 1994
CDMA 1995
Development Phase
Connection Era
Ego Era
Adoption Phase
Commitment Era
Diffusion Phase
*Europe
** United States
GSM 1979
TDMA 1988
CDMA 1988
*GSM E 1992
**GSM US 1996
TDMA 1993
CDMA 1996
*GSM E 1986
**GSM US 1994
TDMA 1989
CDMA 1989
2G wireless standards – The Stages of Standard Development and the
ERA’s of Information Sharing
GSM 1982
TDMA 1989
CDMA 1989
GSM US 1993
TDMA 1992
CDMA 1992
*GSM US 1996
TDMA 1994
CDMA 1995
Development Phase
Connection Era
Ego Era
Adoption Phase
Commitment Era
Diffusion Phase
*Europe
** United States

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Table 9. Eras of information sharing events: Qualcomm promotes CDNA

SEPARATED INTO ERAS
Jan-89 CTIA endorses TDMA Broadcast
Feb-89 Qualcomm management visit Pactel management - series of meetings ensues throughout 1989 Cascade
Mar-89 Qualcomm management visit Ameritech management Cascade
Apr-89 Qualcomm hires PR firm to develop awareness campaign Broadcast
Apr - Nov 1989 At every industry conference or symposium, Qualcomm sent senior level representatives to speak about CDMA Broadcast
Jun-89 Irwin Jacobs gives presentation at CTIA Broadcast
Jul-89 PacTel agrees to provide $2M to Qualcomm for further development of CDMA Cascade
Jul-89 Qualcomm executives visit NYNEX Cascade
Oct-89 Qualcomm executives visit Ameritech Cascade
Nov-89 Live demonstration at Qualcomm work site, manufacturers and operators attend Broadcast
Dec-89 Qualcomm / PacTel l/ Motorola reach development agreement Cascade
Feb-90 Qualcomm & NYNEX conduct live trial in New York Broadcast
Mar - Sept 1990 AT&T, NYNEX, Ameritech, Motorola and PacTel commit $30M for continued development of CDMA Broadcast
Jul-90 Qualcomm distributes Green Book of CDMA to partners and advocates which outlines standard specifications and invites input and feedback Cascade
Sep-90 Qualcomm senior executive makes series of presentation to Korean government (ETRI and MoC) Cascade
May-91 Qualcomm and ETRI reach Joint development agreement Cascade
Oct-91 Qualcomm distributes Gold Book of CDMA standard specifications to partners / advocates- final document after revisions Cascade
Nov-91 Trial of CDMA in San Diego - full fledged cellular network - in conjunction with PacTel Broadcast
Dec-91 Qualcomm IPO raises $68M Broadcast
Dec-91 Dr Irwin Jacobs CEO of Qualcomm publicly states that "all questions regarding CDMA have been put to rest" Broadcast
Jan-92 CTIA fails to endorse Qualcomm's CDMA Broadcast
Jan-92 Qualcomm CEO Irwin Jacobs publicly states that CDMA will be commercially available in 12 months Broadcast
May-92 Aggressive PR by Qualcomm / PacTel /Motorola targeted at network operators Broadcast
Jun-92 Ameritech launches 18 month market and technology trial of both TDMA and CDMA Broadcast
Aug-92 US West New Vector announce they will adopt CDMA and sign purchase agreements with Motorola and Northern Telecom Broadcast
1992 Qualcomm invests millions in communicating the benefits of CDMA in trade press and industry forums Broadcast
Mar-93 BAMS announces they will use CDMA Broadcast
Mar-93 Pactel and Ameritech support CDMA at CTIA board meeting Cascade
Jun-93 US West claims it will have CDMA up and running in its Seattle market by late 1994 Broadcast
Jul-93 Ameritech backs away from TDMA, claims market and technology trial does not support adoption of TDMA Broadcast
Jul-93 CTIA endorses Qualcomm's CDMA as an interim standard IS-95 Broadcast
Dec-93 CDMA development group formed - 17 companies - press release identifies capacity benefits of CDMA Broadcast
Dec-93 CDMA development group - acts as mechanism for sharing information and building relationships Cascade
Jan-94 Thomas Crawford, Director of marketing at Qualcomm - press release stating "CDMA is ready to go" Broadcast
1994 Qualcomm makes public claims via press releases, news media, speeches regarding the technical superiority of CDMA Broadcast
Dec-94 Qualcomm and Northern Telecom sign agreement for the joint manufacture of infrastructure equipment for CDMA Cascade
Dec-94 Digital Spectrum Auctions - $7B raised Broadcast
Jun-95 PCS PrimeCo announce they will use CDMA Broadcast
Jul-95 Sprint Technology Ventures (STV) publicly supports their choice of CDMA Broadcast
Oct-95 Hutchinson Telephone of Hong Kong announces launch of first commercial CDMA network Broadcast
Oct-95 Qualcomm claims that Sprint, GTE, Ameritech, AirTouch, Bell Atlantic, NYNEX and US West are all committed to the commercial use of Broadcast
Dec-95 South Korea announces launch of commercial CDMA network Broadcast
Jan-96 STV requests Motorola to provide last minute financial guarantees in case of system failures for CDMA roll-out Broadcast
Jan-96 Motorola refuses to provide guarantees to STV; Nortel / Lucent agree to performance guarantees Cascade
Feb-96 Qualcomm claims 10 of top 14 Cellular operators have committed to CDMA Broadcast
Mar-96 CDMA development group announce deployment of CDMA in India, China, Brazil, Indonesia and Russia Broadcast
Nov-96 STV commits to massive launch with CDMA technology prior to year end Broadcast
Oct-96 Primeco announces it will launch service in several markets using CDMA Broadcast
Feb-97 China places $300M order to Qualcomm for CDMA phones Broadcast
Qualcomm and CDMA information sharing events / activities 1989 - 1997
EGO ERA
CONNECTION ERA
COMMITMENT ERA






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Table 10. Eras of information sharing events: Ericsson promotes TDNA 8 GSN
SEPARATED INTO ERAS
1982 Stockholm inaugural meeting for GSM standard - representatives from 11 countries Cascade
1985 Ericsson presents its TDMA based proposal Cascade
1985 system requirements defined, circulated and endorsed Cascade
1985 development of technical details for GSM begins Cascade
Jun-86 standard Cascade
Oct-86 All parties supporting Ericsson proposal with the exception of French and German governments Cascade
Nov-86 Ericsson goes into a cooperation agreement with Siemens (German telecommunication manufacturer) for the GSM standard Cascade
Nov-86 Ericsson signs a development agreement with LTC (French telephone operator) for the GSM standard based on its TDMA version Cascade
Feb-87 GSM standard to be based on Ericsson TDMA proposal Cascade
1987 - 1991 GSM standard details defined Cascade
Jan-89 In the U.S. CTIA endorses TDMA version of a digital standard based on Ericsson's GSM proposal for the EU Broadcast
1991 Ericsson continues to publicly state at every opportunity their disbelief in the claims being made about CDMA by Qualcomm Broadcast
Feb-91 Los Angeles Cellular Telephone Co. publicly commits to TDMA; orders equipment from Ericsson Broadcast
Jul-91 Ericsson and GE mobile enter discussions to build a dual-mode handset with analog and TDMA technology Cascade
Jan-92 CTIA fails to endorse Qualcomm's CDMA Broadcast
Jan-92 Southwestern Bell announces it will order TDMA equipment from Ericsson Broadcast
Feb-92 First GSM handsets receive interim approval for global markets Broadcast
May-92 Ericsson and GE mobile announce dual-mode handset with analog and TDMA technology will be available in Aug 1992 Broadcast
Aug-92 Ericsson and GE mobile announce delay in launch of dual-mode handset with analog and TDMA technology until year end Broadcast
Nov-92 McCaw Cellular announces it will commit to TDMA standard and deploy in Florida markets in early 93 Broadcast
Nov-92 Ericsson and GE mobile launch dual mode handset Broadcast
1992 Ericsson spends millions to highlight benefits of their TDMA and GSM standards in trade press and industry forums Broadcast
Jul-93 Southwestern Bell launches media blitz for its new TDMA based digital service in Chicago Broadcast
Jul-93 Ameritech backs away from TDMA, it announces market and technology trial doesn't support adoption of TDMA Broadcast
Aug-93 AT&T announces takeover of McCaw Cellular for $12.6B Broadcast
Oct - Dec 93 AT&T with Southwestern Bell send out a torrent of attacks in the trade press, at conventions and on internet forums against CDMA Broadcast
Jan-94 MCI announces it will invest $1.3B into Nextel in order to get into digital game Broadcast
Mar-94 Ericsson announces development of new intelligent base station for GSM standard Broadcast
Apr-94 MCI/Nextel announce they will support GSM since it is a proven technology that is ready to go Broadcast
Jun-94 Bellsouth announces support for TDMA due to its availability and proven performance Broadcast
Dec-94 Digital Spectrum Auctions - $7B raised Broadcast
Jun - Dec 94 Ericsson releases a series of white papers aimed at discrediting CDMA Broadcast
Mar-95 American Personal Communications pledges to support GSM standard Broadcast
Mar-95 Pacific Bell agrees to $300M deal with Ericsson for GSM equipment for deployment in California and Nevada markets Broadcast
Nov-96 Omnipoint announces roll out of GSM based service Broadcast
Dec-96 AT&T attempts to pre-empt competitors and announces roll out of new digital service based on TDMA Broadcast
Nov-97 Seven regional GSM carriers announce the North American GSM alliance group formation Broadcast
Nov-97 Seven regional GSM carriers form the North American GSM alliance group Cascade
Ericsson TDMA and GSM information sharing events / activities 1982 - 1997
CONNECTION ERA
EGO ERA
COMMITMENT ERA



Tables 9 and 10 display the same set of information sharing events as Tables 5, 6, 7, and 8 but
with the eras identified.
Figure 10 displays the compilation of information sharing events for all three standards, separated
by broadcast or cascade and displayed according to frequency within the eras. The highest instances of
cascade information sharing occur in the connection era and that these instances of cascade information
sharing decline as we enter the ego and commitment eras. The use of broadcast information sharing

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peaks in the ego era, but there is also much evidence of its continued use throughout the commitment
era.

Figure 10. !ncidence of cascade and broadcast information sharing

All Standards Combined - Instances of Cascade and Broadcast
0
5
10
15
20
25
30
35
40
45
1982 - 1990 1991-1996 1997
Connection era Ego era Commitment era
I
n
s
t
a
n
c
e
s
Cascade Broadcast

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Throughout the study period, both Ericsson and Qualcomm employed a combination of broadcast
and cascade information sharing techniques, with the focus in the connection era on the use of
information cascades. !n the initial years of the standard development phase, when the technical,
economic and strategic design issues were being decided and the communication of Qualcomm's
message was new and complex, we see a heavier preponderance on the reliance of strong ties or
relationship cascades to promote CDNA. Qualcomm's senior management team identifies and
undertakes face-to-face meetings with key adopters like PacTel, Ameritech and Nynex. These meetings
more than once and relationships build between the involved parties. As proof of these relationships and
the ability to describe them as strong ties, PacTel enters into development agreements for CDNA with
Qualcomm. This type of arrangement requires close contact and regular updates between parties. Also
Qualcomm and Nynex conduct a joint live trial of CDNA. This activity would also require frequent contact
between parties and the delivery of complex technical information. Ericsson also relies on its network of
strong ties to finalize the development and acceptance of both standards it supports. !n the connection
era for CNDA, 50¾ of the identified information sharing activities was cascade.
For Ericsson this percentage is even higher - over 75¾. Here the evidence of strong ties also lies
in the use of development and cooperation agreements with Siemens and LTC for the further
development of the technology. !n the U.S. scenario, the early support by the CT!A for TDNA is surely
propagated on the delivery of complex information regarding the technology. Even though direct
evidence does not exist in this analysis, it seems logical to conclude that gaining approval by the CT!A
would require frequent interactions between members of the CT!A and Ericsson. Thus a strong tie most
likely existed here as well. By 1991, near the end of the connection era, the instances of cascade
sharing decline drastically and there is a shift towards the predominant use of broadcast for both
technology sponsors. Since the process of cascades involves identifying a few key adopters who
legitimize the innovation and then through their support, drive more widespread adoption, it was
important for Qualcomm to locate a group of network operators it could build relationships with that
allowed for ongoing direct contact through strong ties for the necessary education and acceptance of
CDNA. The support of these operators would influence others to support CDNA. Since one adopter can

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tip the balance, and obtaining timely access to adopters is so critical, it might seem that technology
sponsors must be everywhere at the same time. However this is where the process of information
cascades is most effective. Even though Qualcomm sought out relationships with PacTel, Ameritech and
Nynex, the actions and support of these service providers was also critical in influencing others to select
the CDNA standard.
As both firms entered the ego era in 1992, the use of cascade information sharing has all but
yielded to broadcast information sharing. Again in the commitment era, there is little cascade
information sharing, accounting for less than 15¾ of information sharing events by the two sponsors
combined. !nformation sharing in the commitment era is no longer being generated by the technology
sponsors, and instead is almost solely coming from adopters as they proclaim their support. Here the tie
strength between sponsors and adopters is primarily weak as intermediaries are managing the transfer of
information in these eras.
Other indicators that may assist firms in distinguishing between eras, or recognizing which era they
might be participating in, are licensing and development agreements. This process of era recognition is
certainly useful for a firm since the eras provide insights into where along the standard setting process
the industry currently is. This information could assist in enhancing the strategic actions of both sponsors
and adopter firms who are participating in the standard contest. For sponsors, it would allow them to
recognize and apply the most befitting information sharing for a particular point in time. For adopters, it
could signal to them the market viability of a particular choice and thus reduce the risk associated with an
improper selection.
Figure 11 displays the frequency of development and licensing agreements evident within the 2G
standards process distributed according to eras. Since development of the technological standard
primarily occurs within the connection era, it is here that the greatest numbers of development
agreements are announced. One potential indicator that allows firms to recognize that the standards
contest is moving into the ego era is the increased incidence of licensing agreements, which indicates
that the standard is nearing both technological and market readiness. Firms begin to demonstrate their
commitment to adopt a standard as early as the latter portion of the connection era, and this continues

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throughout the ego and commitment eras. Adoptions peak in the commitment era and decline toward
the end of the standard battle. !f a firm was tracking market activity, it could use the intensity of
adoptions as a gauge to assist in identifying which point in the standard setting process they are at. !n
addition, evidence of both licensing and development agreements would also support this ability.

Figure 8. !ndicators of size and influence

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Factors Affecting Standards Process Seperated by Era
All Three Competing Standards - CDMA, TDMA & GSM
-2
0
2
4
6
8
10
12
14
16
18
year 1 year 2 year 3 year 1 year 2 year 1 year2 year 3 year 4
Connection Era Ego Era Commitment Era
F
r
e
q
u
e
n
c
y

o
f

E
v
e
n
t

cascade events broadcast events # development agreements
# license agreements # adoptions

Figure 11. Factors affecting the standards process

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8.0 D!SCUSS!ON


!n this paper ! develop a model of information sharing for use in a technical market based standards
process. !t extends previous work on how a firm can influence the outcome of a standards contest and
combines aspects of the literature on diffusion and social networks with traditional standard setting
knowledge. Previously much of the literature on standard setting and network externalities focused on
timing of entry and management of expectations. Likewise, the literature on technology diffusion
recognized the importance of effective communication to increasing the speed of technology adoption.
Social network theory effectively deals with the strength of relationships and how these influence the
delivery of information. The model ! develop extends these concepts further through their application to
a standards setting process and introduces a new focus on how the use of strategic sharing of
information can impact the rate of adoption and thus alter the outcome of a standards contest.
The results of this single case study suggest that firms use information to influence adopters'
expectations regarding a technical standard. They are aware of this activity, called information sharing,
and objectively apply it as a strategic tool within a de-facto standards contest. Further, it seems
apparent that firms rely more heavily on cascade information sharing during the early stages of a
standard's development in a market based contest. Here the information being shared consists of
awareness knowledge, how-to knowledge and principles knowledge (Rogers, 1995). Bekker (2001)
classifies this as the development phase of the standard setting process. !n my focus on information
sharing, ! label it the connection era. Here the sharing takes place through strong or direct ties and
requires relationships for the transfer of the complex and ambiguous information (rich-media) associated
with technical, economic and strategic design issues of the standard. !n contrast to this, firms rely more
heavily on broadcast information sharing during the adoption and diffusion stages of Bekkers (2001),

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which ! link to ego and commitment eras. Broadcast information sharing takes place over weak or
indirect ties and delivers a straightforward message of technical superiority and market support. The
message here emphasizes the credibility and merits of the technology and commitment to a irreversible
path. !t is interesting that within this era we see information sharing being instigated by both sponsors
and adopters as they communicate trial results, generate advertisements, announce support through
purchase agreements for infrastructure and service launches.
Beyond confirming the relevance of the information sharing process in a standards context, this
study also indicates the possibility of how certain characteristics of the firm and the standard impact a
chosen information sharing strategy. Ericsson, the incumbent in the market, initially supporting an
evolutionary standard, employed a campaign of information sharing directed at creating fear, uncertainty
and doubt (FUD). !t attempted to create noise in the environment and add confusion into the selection
process for adopters. Nuch of its communication involved comparisons between competing standards,
identifying its standard's strengths versus the competing standard's weaknesses. !n addition, Ericsson
publicly discounted claims made by Qualcomm regarding the benefits of CDNA. Ericsson also possessed
a strong reputation for quality and innovativeness in the industry. Therefore it invested less time in
sharing information regarding its abilities. Qualcomm, a new entrant advocating a revolutionary standard
that was considered technically superior, avoided negative comparisons and instead focused its message
on its own standard's advantages. !n general, its message was a positive one that evaded the negativity
associated with Ericsson's message. Qualcomm did not have a strong reputation in the industry and this
required information sharing that lent support to its credibility. The funding support obtained from PacTel
and Notorola is an example of an action that improved Qualcomm's reputation. !t is difficult to fully
comprehend why these two firms undertook a different approach, however, Ericsson's FUD campaign was
probably an attempt to exploit its strong reputation against the unknown factor that Qualcomm
represented. Qualcomm recognized its weak position in the network of manufacturers and network
operators and chose to avoid confronting Ericsson's directly. !nstead, Qualcomm focused on delivery of a
repetitious message designed to highlight the advantages of CDNA, and as some commentary suggests,

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designed to exaggerate the anticipated technical capabilities of CDNA in an attempt to build early support
for the standard.
Another possible rationale for the difference in the context of the messages chosen by these firms
is enmeshed in the technical capability and degree of radical change surrounding each technology. The
evolutionary nature of TDNA placed Ericsson in a preemptory position in the market place. Ericsson may
have assumed, and rightly so, that adopters would be inclined towards a standard that required minimal
upgrade to infrastructure and was based on commonly accepted principles of design. Since TDNA was
an evolutionary technology, adopters would require less information in their selection process. Adding to
this sense of confidence would have been the certification of TDNA by the CT!A. These conditions could
have provided Ericsson with a false sense of security regarding TDNA's adoption in the U.S. market and
may have been responsible for Ericsson's slow start in an attempt to thwart claims made by Qualcomm
regarding CDNA.
lxvi
When TDNA's subordinate technical abilities became evident, Ericsson was left with
little choice than to use public doubt and disbelief to discount the superiority claims being advanced by
Qualcomm.
The revolutionary nature of CDNA required overcoming the obstacles presented by adopters'
requirement to replace much of their current infrastructure. Undertaking an overhaul of this nature
would require an expectation that CDNA would encompass exceptional technical potential. Radical
technologies require significant information sharing by adopters. Since Qualcomm recognized this, its use
of grand claims throughout all three eras, but intensifying in the ego era, suggests that the revolutionary
nature of CDNA along with its technical advantages was responsible for the type of information sharing
strategy that Qualcomm employed.
lxvii



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9.0 THEORET!CAL !NPL!CAT!ONS


Standard setting is a complex process where many factors can influence the outcome. From a theoretical
perspective, the most apparent implication of this study is that information sharing does matter. Firms
participating in a technical standards contest can adopt information sharing as a strategic tool to
positively influence the outcome and thus the overall success of an organization. This finding supports
other theoretical conclusions put forward in the literature on diffusion and adoption, standards, and social
network theory and extends this body of work through the introduction of information sharing as a key
strategic tool. As identified by other scholars, timing associated with market actions and events,
especially in markets characterized by externalities, can lead to excess inertia causing the market to tip
towards one dominant standard (Farrell 8 Saloner, 1986). This notion is also related to the concept of
obtaining critical mass, derived from the technology diffusion literature. When a sufficient number of
adopters have selected a technology to allow further adoption to be self-sustaining, a situation of critical
mass occurs (Rogers, 2003). Finally, there exists much work surrounding tie strength and information
delivery, suggesting that strong or direct ties are more apt for the delivery of complex and ambiguous
information, while weak or indirect ties are better equipped to deliver simpler, less complex messages.
The results of this case study support these conclusions and suggest that timing of information sharing
when undertaken through the appropriate media can assist a firm in attaining a dominant standard. !f
firms can develop and implement an information-sharing strategy, they potentially can improve their
chances of success in a standards contest.
!n addition, it appears that there exist some moderating effects associated with firm characteristics
like size and reputation and the degree of revolutionary change a technology requires. The influence of
firm size has traditionally been recognized in the literature on innovation as a determinant of innovative
ability, with R8D intensity used as a measure of innovative effort. Other firm characteristics such as cash
flow and degree of diversification have been considered as possible explanations of R8D ability and thus

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innovative capability (Cohen 8 Levinthal, 1989). However, unlike the revolutionary nature of the
technical standard itself, where compatibility between a technical standard and the current technology
influences the firm's choice of strategy when it wages a standards war (Shapiro 8 varian, 1999), less
research exists on how firm size and reputation affect firms' actions in a standards contest. Since much
of the standards literature focuses on the market conditions that lead to dominant standards, this
research introduces a perspective that warrants further exploration - how differences in firm
characteristics affect a firm's deciding what actions, activities, and strategy to undertake in a standards
contest.
These findings enrich the discussion on standard setting and suggest that other factors potentially
affect the outcome of a standards contest. Further research should attempt to extend this model to
ensure its application across other industry settings and determine if other factors or conditions should be
added that affect how information is shared in technical standard setting. For example, one area that
would benefit from further investigation is how firm characteristics play a role in the choice of
information-sharing strategy and how firms can use the information they possess to offset disadvantages
like Qualcomm's relatively small size and nebulous reputation or Ericsson's relatively static culture. !n
addition, since the focus of this paper is on the information-sharing activities of firms in a market based
or de-facto standards process, it would be enlightening to undertake a study that investigates the use of
strategic information sharing in a committee-based process, comparing and contrasting the similarities
and differences associated with each type. For instance, would the mix of cascade versus broadcast
information sharing significantly change in a committee-based process? One would expect so, but there
would remain the question of the degree that the relationship between the two would be altered.
Another question to explore would be whether a shift might be primarily due to the environmental
conditions of a committee-based process or to firm-related characteristics. Also worth investigating is the
definition of what constitutes a winner as it relates to standards contests with multiple competing
technologies. Since market share tends to be not as relevant in these instances, it would be valuable to
identify what other measures firms could use to understand the viability of a particular standard.

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The implications of this model should be of great interest to managers. Convincing key adopters is
recognized as an important component of obtaining a dominant standard, so advocates of a technical
standard would benefit from an understanding of how information sharing can be used to advance that
end. On the other hand, adoption of a technical standard is a decision steeped in risk and uncertainty. !f
managers who are seeking to adopt can increase their awareness of the eras associated with the
standards process, they may be better able to make judgments regarding a standard's potential to be
dominant. !n either case, an enhanced understanding of how information sharing affects the outcome of
standard setting benefits the industry overall.

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10.0 L!N!TAT!ONS OF THE STUDY


The first potential limitation of this study is a lack of external validity due to the single case study
approach that was selected and that the results are difficult to generalize beyond the 2G standard setting
process in the wireless industry in the United States. However, the nature of the information sharing
data itself limits the type of study that can be undertaken in this context. A longitudinal qualitative
research project might be the only way to substantively identify the outcome of a firm's information
sharing actions. The study does provide insights into factors that impact the outcome of technical
standard setting, and with further research that includes more comprehensive sampling into other
industries and situations, the results might be duplicated and thus become more generalizable.
The second study limitation deals with the degree that cascade information sharing events are
publicly known and those secondary sources supporting their existence are available to the researcher.
Cascade events are based on relationships and direct imparting of information between individuals.
Unlike broadcast events, which by their use of intermediaries are generally available and easily gathered
through secondary sources, cascade events are more difficult to identify and locate evidence of.
Therefore, there may be instances of cascade information sharing that could not be identified for this
study's data set.. However, there is no evidence to suggest that there are a significant number of
unidentified cascade events. !n order for the study results to be substantively altered, there would have
to exist a significant trove of cascade information sharing events that if discovered, would suggest that
the information sharing trends identified and discussed in this analysis were in err. Since this evidence
has not come to light as of yet, ! believe it is safe to assume that it is possible but not highly probable
that instances of cascade information sharing remain unaccounted for within this standards contest, but
highly unlikely that enough exist to alter the set of conclusions gathered.

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As previously discussed, a standards process is inherently complex, and many factors potential
influence the outcome. This study, although offering insights into firm-related factors that potentially
influence a technical standards process, does not attempt to offer conclusive evidence that information
sharing alone answers our quest to ascertain the complete rationale behind technology selection in a
standards contest. Nany factors, both environmental and firm-related, interact in the selection of a
dominant standard.
Finally, the final study limitation involves the data collection and interpretation process. At this
point in time, the data has been only interpreted by me and therefore some degree of personal bias
might be present in the collection and assessment of the information sharing events collected. This can
be rectified by having a second coder check the internal reliability of the process in the future.

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11.0 CONCLUS!ON


This paper presents a model of the information sharing process that firms undergo in a technical market
based standards contest. The research design consists of a longitudinal examination of the United States
standards contest for second generation wireless service. The results of this study provide insights into a
set of factors that influence the outcome of these contests. They identify that the process of information
sharing is one method that can be used to influence key adopters and thus the outcome of the contest.
They also suggest that this is a strategic activity undertaken by firms and entails a series of actions and
events over an extended duration of time. Two primary types of information sharing were identified:
cascade and broadcast. These were found to commonly occur over different types of network ties with
each type best suited for the delivery of its own unique message. The timing of delivery was determined
to be consequential in the effectiveness of the information sharing process, and the complexity of the
message content was seen to shape and govern the choice of media for delivery. Three separate eras
were defined in order to assist in the appreciation of the strategic process that firms undertake in the
sharing of important and influential information.
Further research is required in order to increase the generalizability of this research. Testing this
model in the context of different standards processes and different industries is necessary to improve the
external validity of the study. !n addition, further research could extend the model developed by this
study to ensure its comprehensiveness and explore whether other conditions exist that should be added
to the model. Certain firm-related factors along with revolutionary nature of the technical standards were
presented as potentially being important aspects of the overall process of information sharing. Further
exploration of these areas is also warranted to determine their impact on the process of technical
standard setting.

7f25f2006
107
The literature on standard setting has focused on the environmental factors that influence the
outcome of a standard contest. This research supports a more recent trend in the literature that seeks to
understand how firm-related factors interact with environmental conditions in order to influence the
selection of a dominant standard. This study also combines key findings from three separate streams of
literature: standard setting, technology diffusion and social networks, with the intent of creating a more
comprehensive set of factors that can be relied upon to further our understanding of technology
selection.
Finally, the issue of technology selection as it relates to standard setting is far from fully
understood. ! have suggested a new strategy choice exists for firms that are attempting to influence the
outcome of a standards contest. This strategy choice reflects the process of information sharing as it
relates to the contest of the message, the choice of media for delivery, the target of influence and the
timing of delivery. Further research in this area may be able to extend the framework presented in the
paper and answer additional questions concerning the comprehensiveness and external validity of these
conclusions.


i
!n the case of 2nd Generation wireless, + standards are now reduced to 2, CDNA 8 GSN. As developers and service
providers begin the move to 3rd Generation wireless, the battle is clearly still evident. However through constant
improvements to interoperability across standards, the battle may never end in a single winner. Both standards
could acquire sufficient users on a global basis to be competitive.
ii
When categorization of the actions took place, two of these five that were single sourced were later categorized as
cascade and three as broadcast. Three were actions undertaken by Qualcomm and two by Ericsson. This lack of
concentration as being either all cascade or all broadcast or all Qualcomm's or all Ericsson's further reinforced my
satisfaction that their inclusion in the data set was acceptable.
iii
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
iv
Breed, Gary, ¨FCC will let market pick the technology", Communications, Sep 1995, v32, pPCS+
v
NcHale, Tom. ¨Digital Spearheads the Revolution", Electronic Buyers News, Nay 29, 1995, p38
vi
Thryft, Ann. ¨PCS standards war boils-CDNA seems to have long-term edge over TDNA, other systems", Electronic
Buyers News, Feb 12, 1996, p20
vii
Nason, Charles, ¨How CDNA came from behind and overtook TDNA: Telephony, June 21 1993.
viii
Nason, Charles, ¨Wireless market is hot, hot, hot", Telephony, April 18, 199+.
ix
Later in the process there are examples of N8A activity where alliances are formed with incompatible networks,
one example being the merger of BellSouth (GSN), Southwestern Bell (TDNA) and Ameritech (CDNA) into verizon in
1999.
x
Based on, Wireless Week Retrospective, !ssue of December +
xi
Federal Communications Commission Seventh Annual Report and Analysis of Competitive Conditions with Respect
to Commercial Nobile Services. July 2002.
xii
Deutsche Bank
xiii
Wexler, Joanie. ¨Getting to know PCS", Network World, Nay 22, 1995, v12, p28
xiv
Bernier, Paula, ¨Taking Stock of the PCS Network", Telephony; Chicago; Nay 15, 1995, pg 12.

7f25f2006
108

xv
Strege, Arlene. ¨Developing Global wireless systems for PCS", AT8T Technology; New York, autumn 1993, v8, ! 3,
pg 10.
xvi
Deutsche Bank Alex.Brown, ¨The Rise of the 3G Empire - even Rome wasn't built in a day", US Wireless
Communications Equipment Report, Sept 2001.
xvii
The main exception to this is the commitment early on for AT8T Wireless to support TDNA. Their choice is driven
primarily by a desire to leverage existing infrastructure and to gain a first mover advantage in the market.
xviii
Qualcomm corporate website
xix
Article from The Ericsson Files (DvD for PC)
© 2001 Föreningen Stockholms Företagsminnen and Telefon AB L N Ericsson
xx
Wexler, Joanie. ¨Getting to know PCS", Network World, Nay 22, 1995, v12, p28
xxi
Evidence is the 2G standard setting processes in the European Union, China, Japan; 1G standard setting process in
Canada, United States
xxii
Berg, Sanford. ¨Telecommunications: balancing regulation and the marketplace", Public Utilities Fortnightly,
Washington, may 15, 1993.
xxiii
Supported by Narket Research.still need to source this...
xxiv
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
xxv
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
xxvi
Although NC! was a powerful long distance carrier at the time and many felt assured they would command a
presence in 2G wireless, they choose to align themselves with Nextel and offer wireless service via their own unique
technology, not participating in the 2G standards process.
xxvii
Wexler, Joanie. ¨Getting to know PCS", Network World; Farmingham; Nay 22, 1995, v 12, ! 21, pg 28.
xxviii
!ntel Unveils New Technologies For Future Cell Phone, PDA Processors Based On !ntel® XScale® Technology;
http:ffwww.intel.comfpressroomf
xxix
Liebowitz, S.J. and Nargolis, Stephen E, ¨Path Dependence, Lock-!n, and History," Journal of Law, Economics and
Organization, 1995, v11, N1, p20+-226.
xxx
CT!A website; wireless news; press releases, Sept 1995
xxxi
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
xxxii
Keenan, Nichael, ¨No-click CDNA", Communications Week, Narch, 1998.
xxxiii
Garrard, Garry; Cellular communications: worldwide market development", Artech house, 1997.
xxxiv
Arnst, Catherine. ¨Commentary: Uncle Sam, Please Pick a Cell-Phone Standard", Business Week, Feb 2+, 1997,
page ++
xxxv
Nason, Charles
xxxvi
Mock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
xxxvii
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
xxxviii
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
xxxix
Breed, Gary. ¨FCC will let market pick the technology", Communications, Sep 1995, v32, pPCS+
xl
NcHale, Tom. ¨Digital Spearheads the Revolution", Electronic Buyers News, Nay 29, 1995, p38
xli
Thryft, Ann. ¨PCS standards war boils-CDNA seems to have long-term edge over TDNA, other systems",
Electronic Buyers News, Feb 12, 1996, p20
xlii
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
xliii
Bekkers, Rudi.
xliv
Cattaneo, G., ¨The making of a Pan-European network as a path dependency process: The case of GSN versus
!BC (!ntegrated Broadband Communications) network," in G. Pogorel (ed.), Global Telecommunication Strategies,
Amsterdam: Elsevier Science, 199+.
xlv
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
xlvi
Bekkers, Rudi
xlvii
Until 1999 when the results of a legal battle between Qualcomm and Ericsson resulted in Ericsson's purchase of
Qualcomm's
xlviii
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
xlix
Bekkers 8 Nock
l
Nason, Charles (199+)
li
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
lii
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
liii
Farley, Tom ¨Nobile telephone History", privateline.com, Narch 2005.
liv
Nason, Charles, ¨Ameritech drops TDNA, says technology is inferior to analog", Telephony, July 26, 1993.
lv
Garrard, Garry, ¨Cellular communications: worldwide market development", Artech House, 1997.
lvi
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
lvii
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.

7f25f2006
109

lviii
Farley, Tom ¨Nobile telephone History", privateline.com, Narch 2005.
lix
Dobbin, Naureen, ¨Partners and pioneers", CDNA development group website, January, 2003.
lx
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
lxi
Nock, Dave, ¨The Qualcomm Equation", American Nanagement Association, 2005.
lxii
Hardy, Quentin, ¨Jacobs patter: an inventor's promise has companies taking big cellular gamble", Wall Street
Journal, September 6, 1996.
lxiii
Wexler, Joanie, ¨vendors team up on digital cellular spec", Network World, August, 199+.
lxiv
Paglusch, Keith. Senior Engineers Sprint PCS, 1996
lxv
Schine, Eric, and Elstron, Peter., ¨Not exactly an overnight success", Business Week, June 2, 1997
!ndustryftechnology edition, ! 3529, pg 132.
lxvi
Qualcomm began to promote CDNA in late 1989, whereas the first signs of public retaliation by Ericsson are not
evident until early 1991.
lxvii
Qualcomm understood that the lack of certification by the CT!A and the unproven nature of CDNA left much of
the market skeptical regarding the abilities of CDNA (Nock, 2005).












































7f25f2006
110

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! 22

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MNGONGHHI!

! 23

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#%/.*7$!$F/+$%&!&#*&!&#$!.8dOc!+/+! C%+$)9'!&X'!)$F/-/'%-!.Y-\!!!! ! 2G wireless standards – The Stages of Standard Development GSM Global 1979 TDMA 1987 CDMA 1988 Adoption GSM Europe 1986 GSM USA 1994 TDMA 1988 CDMA 1989 Diffusion GSM Europe 1992 GSM USA 1996 TDMA 1993 CDMA 1996 Ongoing for GSM and CDMA •Early technical research •Technical.'77]-!-&')=!/-!'%$!'6!2$)-$F$)*%.$5!!($YY$)-D!4C+/D!k^'</3$!R$3$.$$+-!+$-2/&$!%C7$)'C-!'<-&*.L^?!')!:8^\!!.#!*++$+!6$*&C)$-!*%+!.&!9)*+C*33=! <$.'))$.Y!'6!7*)Y$&!-C22')&!#*72$)$+!$66')&-!&'!+$F$3'2!*!7/9)*&/'%!2*&#!/%&'!&#$!a)+!9$%$)*&/'%!ea:f! $)*\ 1F/!!R#$)$6')$D!*3&#'C9#!RL^?!X*-!/%/&/*33=!&#'C9#&!&'!<$!*!F/*<3$!.Y$+!&#$!&$.%/&/*33=D!&#$!-&*%+*)+-!.'%&$%+$)!*%+!X*-!&#$!6/)-&!&'!<$! MNGONGHHI! ! 51 ! .#%'3'9=!3*..$!*%+!C%7/&/9*&$+!-C22')&!6')!*%!/%%'F*&/F$!%$X!&$.8diO\!!.C37/%*&/%9!/%!.3$-!*%+!-$&<*. economic and strategic design issues •Decision process for basic technical properties •Initial support from key adopters •Supporting measures from community at large •Infrastructure development and procurement •Equipment development and type approval issues •Infrastructure deployed •Intellectual property rights issues •Supply market structure •Standard upgrading !8'C).#%'3'9=!&#*&! -C.'%&$-&!X*-!2)/7*)/3=!<$&X$$%!RL^?!.ZC*3.8d`aID!X#/.L^?!.*3!7$)/&-!'6!.*&/'%-!8&*%+*)+-!b!:8^D!E^R8D!R0R4?D!*%+!04^08l! J/9C)$!O\!G:!X/)$3$--!-&*%+*)+-5!&#$!-&*9$-!'6!-&*%+*)+!+$F$3'27$%&! ! ! ! .8dOc!*%+!.&$+!-'7$!<*-/.8dOc!&$.'77C%/.!2)'<3$7-D! <C&!/&-!3*.

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&!%$&X')Y-!*--'.%!?7$)/.*&$!-2$.048! ! ! R#$!Y$=!2*)&/.#%'3'9=!-2'%-')-! ! ! ! Ericsson Size Age • Revenues of $131B (2004) • 18 000 employees (2004) • Operations in over 140 countries • Started in 1876 • Supplies a full range of network equipment and services that enable telecommunications.$!2)'F/+$)-\!!R#$!%$&X')Y!'2$)*&')-!*)$!*%!/72')&*%&!2*)&!'6!&#$!3/%Y!<$&X$$%!&#$! 7*%C6*.&C)$)-D!X#/.&C)$)!*%+!&#$!$%+!C-$)D!*%+!*)$!2)/7*)=!*+'2&$)-!'6!&#$!&$.#%/. Technology Licensing.*3!-&*%+*)+-[!6$+$)*3!9'F$)%7$%&!)$9C3*&')=!<'+/$-!&#*&!*33'.L^?!/%+C-&)=dX/+$!*.. Mobile and Non-Mobile systems./2*%&-!/%!&#$!X/)$3$--!/%+C-&)=!.#*-$!#*%+-$&-!*%+!*)$!/%&$)$-&$+!/%!-$*73$--D!)$3/*<3$!*%+!/%$12$%-/F$! 7'</3$!-$)F/.&!*.#!+$23'=!&#$! /%6)*-&)C.$!/&!X*-!C%3/Y$3=!&#*&!/&!X'C3+!$1/-&!*-!*!6/)7!/6!. Transmission and Transport systems and global services • TDMA is considered evolutionary technology but GSM is revolutionary Qualcomm • Revenues of $4.#!7*%C6*.$\! .&C)$!*%+!'66$)!-$)F/.L^?!6*/3$+\!!.&$+\!!R#$=!%$$+!&'!2*=!*&&$%&/'%!&'!X#/.PJWE0P.$!&'!$%+!C-$)-[!$KC/27$%&!*%+!-X/&.9B (2004) • 8000 employees (2004) • Operations in over 40 countries • Started in 1985 • Makes mobile phone chipsets based on CDMA technology and also licenses that technology to other makers of mobile phones.'%&$-&!-/%. and Strategic Initiatives ! Focus ! ! ! ! Structure Technology • CDMA is a revolutionary technology ! ! ! I\a!R0. Business units consist of Access technologies. • 4 business units: CDMA Technologies.$--!/-!&#$!%$&X')Y! '2$)*&')-!')!-$)F/. committed to open standards.&)C7!*%+!7'%/&')!2)'9)$--[! *%+!$%+!C-$)-!X#'!C3&/7*&$3=!2C).$2&*%.'77/&7$%&\!! ! R*<3$!a\!.&$)/-&/.'%-/-&!'6!&#$!%$&X')Y!'2$)*&')-D!X#/.*D!&#$!7'-&!/%63C$%&/*3!9)'C2!/%F'3F$+!/%!&#$!G:!-&*%+*)+d-$&&/%9!2)'./*&$+!X/&#!&#$!-&*%+*)+!&#$=]F$!-$3$.#*)*. Wireless & Internet.$!&#)'C9#!2$)-C*-/'%!*%+!C%X*F$)/%9!.'723/-#$+!/&-! 9'*3!'6!.'%-&)C..3'-$!/%!&#$!G:!.-!'6!&#$!&$.UPTWT:S!?LT@R048!?PL!TRU04!. developer of multiple technologies • Separate R&D sector.#! MNGONGHHI! ! 54 ! .#%'3'9=\!!P$&X')Y!'2$)*&')-! .#!+$F$3'2!&#$! &$.

&')-!*%+!&#$/)!7*/%!)$3*&/'%-!+C)/%9!&#$!G:!-&*%+*)+-!.'%&$-&! ! ! R#$!7*/%!&$3$.$-!*%+!$.'7$!*.'77/--/'%!eJ.'77*%+!*%+!.#%'3'9=! -&*%+*)+!&#*&!'&#$)!%$&X')Y!2)'F/+$)-!*%+!$-2$.%$&X')Y!/%6)*-&)C.'%&)'3! '6!9'F$)%7$%&!-C22')&$+!<'*)+-!'2$)*&/%9!/%!&#$!<$-&!/%&$)$-&-!'6!&#$!2C<3/.#%'3'9/.&!.*33=!)$KC/)$+!&#$!+/)$.fD!./*33=!7*%C6*.&C)$-!X/33!-C)F/F$!*%+!#'X!&#$/)!&$.'77C%/&/$-!X*-!/%-&)C7$%&*3!/%!/&-!+$F$3'27$%&!*%+! *.$\!!!!! !! ! G ui de En l in es do rs em en t CTIA Me mb ers hip an ds up po rt FCC m m c ctru S Spe End users ! ! ! ! ! ! ! Standard Sponsors: Ericsson and Qualcomm Network Operators Equipment supply Software Intermediaries Equipment Manufacturers Software Suppliers Licensing Licensing Weak tie / broadcast information sharing ! Strong tie / cascade information sharing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d<*-$+!-&*%+*)+d-$&&/%9!2)'..$\ 11/!!R#/-!/-!.#'/.&/F$3=!/%F'3F$+!/%!&#$!G:!-&*%+*)+!-$&&/%9!2)'.

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*7$!X#*&!-#'C3+!#*F$!<$$%! 6*&*3!+/-*+F*%&*9$-!X/&#!<)/33/*%&!2C<3/.1993 Southwestern Bell Qualcomm Ericsson MCI / Nextel Bell South 1994 ! ! ! Bell Atlantic Mobile Pacific Bell American Personal Communications OmniPoint 1995 Sprint Technology Ventures 1995 ..$--!X*-!0)/.%6)*-&)C.#%'3'9=!-2'%-')-!*%+!&#$/)!Y$=!)$3*&/'%-#/2-! MNGONGHHI! ! 77 ! .--'%]-!'66$)!&'!<C=!&#$!ZC*3.*&$+!X$)$!/72')&*%&!&'!&#$!2)'.!)$3*&/'%-l!e`iiMf\!!!R#$!)$3*&/'%-#/2-!/&!6')9$+!*%+!&#$!7$--*9$-! /&!.#$3!8#'-&$.&C)$!L/F/-/'%!/%!^*).'77!.1993 US West 1990 Nynex Pacific Telesis / AirTouch Ameritech McCaw / AT&T 1992 .*3!Y$=!*+'2&$)-\!!R#$!6/%*3!&$-&*7$%&! &'!/&-!-C.1996 J/9C)$!M\!R$.L^?!23*=-!/%!&#$!X/)$3$--!X')3+\!!! ! ! !! Network of Relationships – When Commitment Occurs ! ! ! ! 1992 .'%'7/-&D!-C99$-&$+!&#*&!ZC*3.$--!'6!/%63C$%./%9!.YD!*%!/%+C-&)=!$.&/'%-!/%&'!*!-&)*&$9=!&'!/%63C$%.)/&/.#!`iiiD!*!7'F$! &#*&!3$9/&/7/B$+!&#$!/72')&*%&!)'3$!.'77C%/.+$3/F$)=!'6!/%6')7*&/'%!*%+!3/%Y/%9!'6!%C7$)'C-!$F$%&-!*%+!*.'77!k'F$).$!*+'2&/'%\!! U$)-.

“Cellular communications: Worldwide market development . Bell Atlantic. Garry. FCC website. Nynex and US ! West ! J/9C)$!h\!.%+/. “How ! the players rate”. Telephony.! ! Population 1996 Gross Paid in MTA ! acquired in Revenue auction (millions) ! (millions) auction (millions) ! ! AT&T wireless 107 $45 400 $1 600 ! $41 600 57 $1 100 ! *PCS PrimeCo ! GTE $398 19 $21 000 ! $82 $19 000 11 ! BellSouth ! 0 $18 000 0 ! MCI ! Ameritech $158 $15 000 8 ! $73 $13 900 7 ! SBC ! Sprint $13 600 145 $2 100 ! ! Sources: Garrard.*&')-!'6!-/B$!*%+!/%63C$%.$ MNGONGHHI! ! 78 ! . Jun2 1997 ! *Revenues for PCS PrimeCo are compiled from individual revenues for PacTel.

*-&!/%6')7*&/'%!-#*)/%9!/-!2)/7*)/3=!C&/3/B$+!/%!&#$!3*&&$)!2*)&!'6!&#$!-&*%+*)+-!2)'.'77\!!R*<3$!O!2)'F/+$-!*++/&/'%*3!+$&*/3-!X/&#/%!&#$!+*&*!*.$!Y$=!*+'2&$)-!/%!*!-&*%+*)+-! MNGONGHHI! ! 79 ! .P!RU0!L?R?! ! ! R#$!6'33'X/%9!.#%'3'9=!-2'%-')-!-$$Y/%9!&'!/%63C$%.C7$%&$+!6')!&#$! .*-.L^?! -&*%+*)+!*%+!/%63C$%.#*)*.$+!<=!ZC*3.#*)&-!.#)'%'3'9/.!<$#/%+! &#/-!2)$+/.M\H!408EWR8! M\`!@?RR04P8!.#%'3'9=! -2'%-')-!-$$Y/%9!&'!/%63C$%.C)!F/*!-&)'%9!&/$-\!R#$=!9$%$)*33=!/%F'3F$! F/-/&-!&'!-#*)$!')!+$F$3'2!+$&*/3$+!-2$..--'%\!!R*<3$!M!2)'F/+$-!&#$!*++/&/'%*3!+$&*/3-!*--'.&/'%-!*%+! $F$%&-\!!! .'%+!2)'2'-/&/'%5!&$.$--\!!R#/-!)$-C3&!-C22')&-!&#$!6/)-&!2)'2'-/&/'%5!&$.'723$1!*%+! *7</9C'C-!7$--*9$-!.*-.*-.C-!'%!&#$!/%6')7*&/'%d-#*)/%9!$F$%&-!.$--D! -C22')&/%9!&#$!-$.*+$!/%6')7*&/'%d-#*)/%9! $F$%&-!$*)3=!/%!&#$!-&*%+*)+!-$&&/%9!2)'.*+$!/%6')7*&/'%!-#*)/%9!+C)/%9!&#$!-&*%+*)+]-!+$F$3'27$%&!2#*-$\!!./*&$+! X/&#!&#$!$3$7$%&-!'6!&#$!-&)*&$9=D!X#/3$!R*<3$!h!2)$-$%&-!*%!*99)$9*&$+!F$)-/'%!'6!&#$!*.'723$1!/%6')7*&/'%!/-!+$3/F$)$+!F/*!*!X)/&&$%!-2$.&/'%5!6/)7-!)$KC/)$!&#$!C-$!'6!2$)-'%*3!)$3*&/'%-#/2-!/%!')+$)!&'!+$3/F$)!&#$!./6/.$+!<=!0)/.'%&*/%D!/%!.$!Y$=!*+'2&$)-!/%!*!-&*%+*)+-!./6/.$)&*/%!2*&&$)%-!*)$!$F/+$%&\!!R#$!7'-&!'<F/'C-!/-!*!2)$2'%+$)*%.&!*3-'!-C22')&-!&#$!3'9/.*-$-D!./*&$+!X/&#!&#$!.*-$!-&C+/$-\!!R*<3$-!O!*%+!I!/+$%&/6=!&#'-$!/%6')7*&/'%d-#*)/%9!$F$%&-!*--'.&$)/-&/.*+$! $F$%&-!*)$!<*-$+!'%!&#$!$123'/&*&/'%!'6!)$3*&/'%-#/2-!*%+!'.*3!')+$)D!&#$!/%6')7*&/'%d-#*)/%9!$F$%&-!+'.%!-'7$!.!'6!*!&$.*&/'%!&#*&!/-! &)*%-6$))$+!*7'%9-&!6/)7-\! ()'*+.'%%$.')+/%9!&'! &#$!6'C)!$3$7$%&-!'6!&#$!-&)*&$9=5!&/7/%9D!7$--*9$D!7$+/*D!*%+!&*)9$&\!!R*<3$!I!+/-23*=-!*%!*99)$9*&$+! F$)-/'%!'6!&#$!-*7$!+*&*\!!R*<3$-!M!*%+!h!6'.'%&$-&!X/33!)$3=!7')$!#$*F/3=!'%!&#$!C-$!'6! .C--!*9)$$7$%&-!6')!6C%+/%9!')! _'/%&!+$F$3'27$%&\!!.$!'6!.&$+!&'!&#$! RL^?!*%+!:8^!-&*%+*)+-!*%+!/%63C$%.*&/'%-!6')!&#$!-&*%+*)+!')!&'!+/-.#%'3'9=!/%!/&-!+$F$3'27$%&!2#*-$\!R#$)$6')$D!&#$-$!..

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d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

&!'%$!&$.$%&)*3!9'*3!'6!*! &$.&$.#%'3'9=!-2'%-')]-!/%6')7*&/'%d-#*)/%9!-&)*&$9=\!!R#$)$6')$D!$F$%!/6!&#$!2)/7*)=!6C%.'%&$%&!'6!7$--*9$D!')!&=2$!'6!7$+/*\!!!!! MNGONGHHI! ! 81 ! .#%'3'9=!'F$)!*%=!'&#$)-!/-!*!.#%'3'9=D!*%+!/%63C$%.&/'%! ')!$F$%&!/-!*22*)$%&3=!&'!/%6')7!&#$!&*)9$&D!&#$)$!/-!9$%$)*33=!*%!C%+$)3=/%9!/%&$%&/'%!&'!*3-'!2$)-C*+$\!! R#/-!*22$*)-!&)C$!X/&#'C&!)$9*)+!&'!&#$!&/7/%9!'6!+$3/F$)=D!.&/'%!'6!*%!*./%9!&#$7!&'!-$3$.

1997 Jan-89 CTIA endorses TDMA Feb-89 Qualcomm management visit Pactel management Mar-89 Qualcomm management visit Ameritech management Qualcomm hires PR firm to develop awareness Apr-89 campaign Apr .in conjunction with PacTel Dec-91 Qualcomm IPO raises $68M Dr Irwin Jacobs CEO of Qualcomm publicly states that Dec-91 "all questions regarding CDMA have been put to rest" Jan-92 CTIA fails to endorse Qualcomm's CDMA Qualcomm CEO Irwin Jacobs publicly states that CDMA Jan-92 will be commercially available in 12 months Aggressive PR by Qualcomm / PacTel /Motorola May-92 targeted at network operators Ameritech launches 18 month market and technology Jun-92 trial of both TDMA and CDMA US West New Vector announce they will adopt CDMA and sign purchase agreements with Motorola and Aug-92 Northern Telecom Qualcomm invests millions in communicating the 1992 benefits of CDMA in trade press and industry forums technical design issues complex inform face to face meeting single adopter written communication technical trial press release press release press release press release press release press release Cascade final design specifications operational issues investment support operational readiness lack of industry support operational readiness operational readiness technical and market issues complex simple simple simple simple simple simple simple inform persuade inform persuade inform persuade persuade inform key adopters key adopters industry key adopters industry key adopters key adopters key adopters Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast support from key adopter benefits of technology simple simple persuade persuade press release press release key adopters key adopters Broadcast Broadcast !!! ! MNGONGHHI! ! 82 ! .final document Oct-91 after revisions Trial of CDMA in San Diego .%6')7*&/'%!-#*)/%9!$F$%&-!d!+$&*/3$+!F$)-/'%5!ZC*3.full fledged cellular network Nov-91 .'77!2)'7'&$-!.Nov Qualcomm senior level representatives speak about 1989 CDMA at industry conferences/symposiums Jun-89 Irwin Jacobs gives presentation at CTIA PacTel agrees to provide $2M to Qualcomm for further Jul-89 development of CDMA Jul-89 Qualcomm executives visit NYNEX Oct-89 Qualcomm executives visit Ameritech Live demonstration at Qualcomm work site. Nov-89 manufacturers and operators attend Qualcomm / PacTel l/ Motorola reach development Dec-89 agreement Message Content legitimization of TDMA technical and strategic design issues technical and strategic design issues future benefits of technology future benefits of technology future benefits of technology technical and strategic design issues technical and strategic design issues technical and strategic design issues operational issues technical and strategic design issues Message Complexity simple complex complex simple simple simple complex complex complex simple complex simple Message Intent inform persuade persuade persuade persuade persuade inform persuade persuade persuade inform persuade Media Type press release Target industry Media Strategy Broadcast Cascade Cascade Broadcast Broadcast Broadcast Cascade Cascade Cascade Broadcast Cascade Broadcast face to face meeting single adopter face to face meeting single adopter press releases and speeches key adopters industry speeches industry speech key adopters industry face to face meeting single adopter face to face meeting single adopter face to face meeting single adopter technical trial key adopters face to face meeting key adopters technical trial key adopters Mar .L^?!! Qualcomm and CDMA information sharing Timing events / activities 1989 . Motorola and PacTel commit $30M in further funding for continued development of technical and strategic design CDMA issues Qualcomm distributes Green Book of CDMA to partners and advocates which outlines standard specifications technical and strategic design Jul-90 and invites input and feedback issues Qualcomm senior executive makes series of presentation Sep-90 to Korean government (ETRI and MoC) promote technology simple inform face to face meeting key adopters intra-group communication Broadcast complex complex inform persuade key adopters Cascade Cascade face to face meeting single adopter Qualcomm and ETRI reach Joint development May-91 agreement Qualcomm distributes Gold Book of CDMA standard specifications to partners / advocates.R*<3$!O\!. Ameritech. NYNEX.Sept 1990 Feb-90 Qualcomm & NYNEX conduct live trial in New York operational issues AT&T.

$7B raised support from key adopter Jun-95 PCS PrimeCo announce they will use CDMA Sprint Technology Ventures (STV) publicly supports their support from key adopter Jul-95 choice of CDMA Hutchinson Telephone of Hong Kong announces launch infrastructure deployed Oct-95 of first commercial CDMA network Qualcomm claims that Sprint. Bell Atlantic. claims market and Jul-93 technology trial does not support adoption of TDMA CTIA endorses Qualcomm's CDMA as an interim Jul-93 standard IS-95 CDMA development group formed . AirTouch.Qualcomm and CDMA information sharing Timing events / activities 1989 . Nortel / Jan-96 Lucent agree to performance guarantees Qualcomm claims 10 of top 14 Cellular operators have Feb-96 committed to CDMA CDMA development group announce deployment of Mar-96 CDMA in India.acts as mechanism for Dec-93 sharing information and building relationships Message Content support from key adopter support from key adopters support from key adopter legitimization of CDMA legitimization of CDMA benefits of technology network of relationships for Qualcomm Message Complexity simple complex simple simple simple simple complex Message Intent persuade persuade persuade persuade inform inform persuade Media Type press release Target key adopters Media Strategy Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Cascade face to face meeting industry press release press release press release press release ongoing communication key adopters key adopters industry industry group members Thomas Crawford. GTE. speeches regarding the technical superiority of benefits of technology 1994 CDMA Qualcomm and Northern Telecom sign agreement for the equipment development Dec-94 joint manufacture of infrastructure equipment for CDMA issues triggers industry wide adoption Dec-94 Digital Spectrum Auctions . news media. Indonesia and Russia STV commits to massive launch with CDMA prior to year Nov-96 end Primeco announces it will launch CDMA service in Nov-96 several markets lack of support from key adopter support from key adopter industry support infrastructure deployed support from key adopter support from key adopter simple persuade press release key adopters Broadcast simple persuade press releases and speeches key adopters Broadcast complex simple simple simple simple inform inform inform persuade inform face to face meeting single adopter industry event press release press release press release industry industry industry market & key adopters Cascade Broadcast Broadcast Broadcast Broadcast simple simple persuade inform press release press release key adopters market & key adopters Broadcast Broadcast simple complex simple simple simple simple inform persuade persuade persuade inform persuade press release industry Broadcast Cascade Broadcast Broadcast Broadcast Broadcast face to face meeting group of adopters press release press release press release press release press release key adopters key adopters industry key adopters Feb-97 China places $300M order to Qualcomm CDMA phones support from key adopter simple inform key adopters Broadcast ! MNGONGHHI! ! 83 ! .1997 Mar-93 BAMS announces they will use CDMA Pactel and Ameritech support CDMA at CTIA board Mar-93 meeting US West claims it will have CDMA up and running in its Jun-93 Seattle market by late 1994 Ameritech backs away from TDMA. NYNEX and US West are all committed to industry support Oct-95 the commercial use of CDMA South Korea announces launch of commercial CDMA infrastructure deployed Dec-95 network STV requests Motorola to provide last minute financial Jan-96 guarantees in case of system failures for CDMA roll-out Motorola refuses to provide guarantees to STV. China. Brazil. Ameritech. Director of marketing at Qualcomm technology readiness Jan-94 press release stating "CDMA is ready to go" Qualcomm makes public claims via press releases.17 companies Dec-93 press release identifies capacity benefits of CDMA CDMA development group .

Ameritech. Nortel / Lucent agree to performance guarantees Qualcomm claims 10 of top 14 Cellular operators have committed to CDMA CDMA development group announce deployment of CDMA in India.press release stating "CDMA is ready to go" Qualcomm makes public claims via press releases. Qualcomm sent senior level representatives to speak about CDMA Jun-89 Irwin Jacobs gives presentation at CTIA Jul-89 PacTel agrees to provide $2M to Qualcomm for further development of CDMA Jul-89 Qualcomm executives visit NYNEX Oct-89 Qualcomm executives visit Ameritech Nov-89 Live demonstration at Qualcomm work site. NYNEX. China.$7B raised PCS PrimeCo announce they will use CDMA Sprint Technology Ventures (STV) publicly supports their choice of CDMA Hutchinson Telephone of Hong Kong announces launch of first commercial CDMA network CDMA South Korea announces launch of commercial CDMA network STV requests Motorola to provide last minute financial guarantees in case of system failures for CDMA roll-out Motorola refuses to provide guarantees to STV.Nov 1989 At every industry conference or symposium.R*<3$!I\!.Sept 1990 AT&T. Brazil.acts as mechanism for sharing information and building relationships Jan-94 1994 Dec-94 Dec-94 Jun-95 Jul-95 Oct-95 Oct-95 Dec-95 Jan-96 Jan-96 Feb-96 Mar-96 Nov-96 Nov-96 Thomas Crawford.'77!2)'7'&$-!.in conjunction with PacTel Dec-91 Qualcomm IPO raises $68M Dec-91 Dr Irwin Jacobs CEO of Qualcomm publicly states that "all questions regarding CDMA have been put to rest" Jan-92 CTIA fails to endorse Qualcomm's CDMA Jan-92 Qualcomm CEO Irwin Jacobs publicly states that CDMA will be commercially available in 12 months May-92 Aggressive PR by Qualcomm / PacTel /Motorola targeted at network operators Jun-92 Ameritech launches 18 month market and technology trial of both TDMA and CDMA Aug-92 US West New Vector announce they will adopt CDMA and sign purchase agreements with Motorola and Northern Telecom 1992 Qualcomm invests millions in communicating the benefits of CDMA in trade press and industry forums Mar-93 BAMS announces they will use CDMA Mar-93 Pactel and Ameritech support CDMA at CTIA board meeting Jun-93 US West claims it will have CDMA up and running in its Seattle market by late 1994 Jul-93 Ameritech backs away from TDMA.L^?!!!!!!!! Qualcomm and CDMA information sharing events / activities 1989 . speeches regarding the technical superiority of CDMA Qualcomm and Northern Telecom sign agreement for the joint manufacture of infrastructure equipment for CDMA Digital Spectrum Auctions .series of meetings ensues throughout 1989 Mar-89 Qualcomm management visit Ameritech management Apr-89 Qualcomm hires PR firm to develop awareness campaign Apr .final document after revisions Nov-91 Trial of CDMA in San Diego . manufacturers and operators attend Dec-89 Qualcomm / PacTel l/ Motorola reach development agreement Feb-90 Qualcomm & NYNEX conduct live trial in New York Mar .full fledged cellular network . news media. Indonesia and Russia STV commits to massive launch with CDMA technology prior to year end Primeco announces it will launch service in several markets using CDMA Broadcast Cascade Cascade Broadcast Broadcast Broadcast Cascade Cascade Cascade Broadcast Cascade Broadcast Broadcast Cascade Cascade Cascade Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Feb-97 China places $300M order to Qualcomm CDMA phones ! ! ! ! MNGONGHHI! ! 84 ! .17 companies . Director of marketing at Qualcomm .%6')7*&/'%!-#*)/%9!$F$%&-!d!*99)$9*&$+!F$)-/'%5!ZC*3. claims market and technology trial does not support adoption of TDMA Jul-93 CTIA endorses Qualcomm's CDMA as an interim standard IS-95 Dec-93 CDMA development group formed .1997 Jan-89 CTIA endorses TDMA Feb-89 Qualcomm management visit Pactel management . Motorola and PacTel commit $30M in further funding for continued development of CDMA Jul-90 feedback Sep-90 Qualcomm senior executive makes series of presentation to Korean government (ETRI and MoC) May-91 Qualcomm and ETRI reach Joint development agreement Oct-91 Qualcomm distributes Gold Book of CDMA standard specifications to partners / advocates.press release identifies capacity benefits of CDMA Dec-93 CDMA development group .

%6')7*&/'%!-#*)/%9!$F$%&-!b!+$&*/3$+!F$)-/'%5!0)/.--'%!2)'7'&$-!RL^?!j!:8^! Ericsson TDMA/GSM information sharing events & activities 1982 .1997 Message Content Message Complexity Message Intent inform Timing Media Type face to face meeting Target government & key adopters government & key adopters government & key adopters government & key adopters government & key adopters government & key adopters single adopter single adopter government & key adopters government & key adopters Media Strategy Cascade Stockholm inaugural meeting for GSM standard 1982 representatives from 11 countries technical and strategic design issues complex technical and strategic design issues complex technical and strategic design issues complex technical and strategic design issues complex technical and strategic design issues technical and strategic design issues technical and strategic design issues technical and strategic design issues initial support from key adopters operational issues 1985 Ericsson presents its TDMA based proposal system requirements defined. conferences. orders equipment from Ericsson support from key adopter Ericsson and GE mobile enter discussions to build final design specifications Jul-91 a dual-mode handset with analog and TDMA simple inform press release speeches.S. publicly Feb-91 commits to TDMA. CTIA endorses TDMA version of a Jan-89 digital standard based on Ericsson's GSM proposal legitimization of TDMA Ericsson continues to publicly state at every 1991 opportunity their disbelief in the claims being made discredit CDMA Los Angeles Cellular Telephone Co. circulated and 1985 endorsed 1985 development of technical details for GSM begins narrowband TDMA design by Ericsson and Jun-86 broadband CDMA design by SEL/Alcatel are the All parties supporting Ericsson proposal with the Oct-86 exception of French and German governments Ericsson goes into a cooperation agreement with Nov-86 Siemens (German telecommunication Ericsson signs a development agreement with LTC Nov-86 (French telephone operator) for the GSM standard GSM standard to be based on Ericsson TDMA Feb-87 proposal 1987 .R*<3$!M\!. interviews press release written communication industry Broadcast simple simple complex persuade inform inform key adopters key adopters key adopters Broadcast Broadcast Cascade ! ! MNGONGHHI! ! 85 ! .1991 GSM standard details defined persuade persuade persuade face to face meeting face to face meeting face to face meeting Cascade Cascade Cascade complex complex complex complex persuade persuade persuade persuade face to face meeting face to face meeting face to face meeting face to face meeting Cascade Cascade Cascade Cascade complex complex inform inform face to face meeting face to face meeting Cascade Cascade In the U.

press releases & discussions key adopters MCI announces it will invest $1.3B into Nextel in Jan-94 order to get into digital game support from key adopter Ericsson announces development of new intelligent benefits of technology Mar-94 base station for GSM standard MCI/Nextel announce they will support GSM since Apr-94 it is a proven technology that is ready to go support from key adopter Bellsouth announces support for TDMA due to its Jun-94 availability and proven performance support from key adopter triggers industry wide adoption Dec-94 Digital Spectrum Auctions . it announces Jul-93 market and technology trial doesn't support Aug-93 AT&T announces takeover of McCaw Cellular for AT&T with Southwestern Bell send out a torrent of Oct .Dec 93 attacks in the trade press.1997 Message Content Message Complexity Message Intent inform persuade persuade persuade inform persuade persuade persuade Media Type press release press release press release press release press release press release press release press release Target public at large key adopters key adopters key adopters key adopters key adopters key adopters key adopters market & key adopters Media Strategy Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast investment support simple Jan-92 CTIA fails to endorse Qualcomm's CDMA Southwestern Bell announces it will order TDMA operational readiness simple Jan-92 equipment from Ericsson Feb-92 First GSM handsets receive interim approval for operational readiness simple Ericsson and GE mobile announce dual-mode May-92 handset with analog and TDMA technology will be operational readiness simple Ericsson and GE mobile announce delay in launch lack of operational readiness simple Aug-92 of dual-mode handset with analog and TDMA McCaw Cellular announces it will commit to TDMA simple Nov-92 standard and deploy in Florida markets in early 93 support from key adopter Nov-92 Ericsson and GE mobile launch dual mode handset operational readiness simple Ericsson spends millions to highlight benefits of 1992 their TDMA and GSM standards in trade press and benefits of technology simple Southwestern Bell launches media blitz for its new Jul-93 TDMA based digital service in Chicago Ameritech backs away from TDMA.Timing Ericsson TDMA/GSM information sharing events & activities 1982 .Dec 94 Ericsson releases a series of white papers aimed discredit CDMA support from key adopter Mar-95 American Personal Communications pledges to Pacific Bell agrees to $300M deal with Ericsson for Mar-95 GSM equipment for deployment in California and support from key adopter Omnipoint announces roll out of GSM based Nov-96 service support from key adopter AT&T attempts to pre-empt competitors and Dec-96 announces roll out of new digital service based on infrastructure deployed Seven regional GSM carriers announce the North support from key adopters Nov-97 American GSM alliance group formation network of relationships for Seven regional GSM carriers form the North Ericsson Nov-97 American GSM alliance group simple simple simple simple simple simple simple simple inform persuade persuade persuade inform persuade persuade persuade press release press release press release press release press release written communication press release press release industry key adopters key adopters key adopters industry key adopters key adopters key adopters market & key adopters market & key adopters Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast simple simple persuade inform press release press release Broadcast Broadcast simple complex inform inform press release ongoing communcation industry group members Broadcast Cascade ! ! ! ! MNGONGHHI! ! 86 ! . at conventions and on infrastructure deployed limitations of technology acquisition of key adopter discredit CDMA simple simple simple simple persuade inform inform persuade press release Broadcast Broadcast Broadcast Broadcast press release key adopters press release industry speeches.$7B raised Jun .

Dec 94 Ericsson releases a series of white papers aimed at discrediting CDMA Mar-95 American Personal Communications pledges to support GSM standard Mar-95 Pacific Bell agrees to $300M deal with Ericsson for GSM equipment for deployment in California and Nevada markets Nov-96 Omnipoint announces roll out of GSM based service Dec-96 AT&T attempts to pre-empt competitors and announces roll out of new digital service based on TDMA Nov-97 Seven regional GSM carriers announce the North American GSM alliance group formation Nov-97 Seven regional GSM carriers form the North American GSM alliance group Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade ! ! ! R/7/%9!$F/+$%&3=!23*=-!*!-/9%/6/.*3!3/-&! '6!$F$%&-!*%+!*.6B Oct .$7B raised Jun .R*<3$!h\!.#*)*.%6')7*&/'%!-#*)/%9!$F$%&-!b!*99)$9*&$+!F$)-/'%5!0)/. publicly commits to TDMA./%9!*+'2&$)-!'6!&#$!&$. CTIA endorses TDMA version of a digital standard based on Ericsson's GSM proposal for the EU 1991 Ericsson continues to publicly state at every opportunity their disbelief in the claims being made about CDMA by Qualcomm Feb-91 Los Angeles Cellular Telephone Co.#)'%'3'9/.*%&!)'3$!/%!*!6/)7]-!+$.-!'6!&#$!7$--*9$D!7$+/*D!&/7/%9D!*%+!&*)9$&\!!J')! $1*723$D!/%!`iiG!X$!<$9/%!&'!-$$!-$)F/. circulated and endorsed 1985 development of technical details for GSM begins Jun-86 standard Oct-86 All parties supporting Ericsson proposal with the exception of French and German governments Nov-86 Ericsson goes into a cooperation agreement with Siemens (German telecommunication manufacturer) for the GSM standard Nov-86 Ericsson signs a development agreement with LTC (French telephone operator) for the GSM standard based on its TDMA version Feb-87 GSM standard to be based on Ericsson TDMA proposal 1987 .#'-$%!6')!+$3/F$)=D!*%+!&#$)$6')$!&#$!&=2$!'6!/%6')7*&/'%!-#*)/%9!*.&$+!*&!./+$+!*+'2&$)-\!!@)/')!&'! &#/-D!7'-&!'6!&#$!/%6')7*&/'%d-#*)/%9!*./-/'%!)$9*)+/%9!&#$!&=2$!'6!7$--*9$!&'!<$! . at conventions and on internet forums against CDMA Jan-94 MCI announces it will invest $1.*-&D!*%+!&#$!&*)9$&!<$.&/F/&=\!!?-! &#$-$!/%6')7*&/'%d-#*)/%9!$F$%&-!*)$!6C)&#$)!*%*3=B$+D!%*&C)*3!<)$*Y-!*22$*)!X/&#/%!&#$!.1991 GSM standard details defined Jan-89 In the U.&$)/-&/.'77C%/.#'/.1997 1982 Stockholm inaugural meeting for GSM standard .*&$+D!&#$!7$+/*!.&/F/&=!X*-!+/)$.Dec 93 AT&T with Southwestern Bell send out a torrent of attacks in the trade press.'7$-!&#$!7*)Y$&!')!/%+C-&)=!/%!9$%$)*3!*%+!C%+$.$D!&#$!7$+/*!-#/6&-!&'!7')$! <)'*+.3*)$!&#$/)!-C22')&!6')!RL^?D!:8^D!')!.#*%9$-!&'!'%$!'6!2'-&C3*&/%9!-C22')&!6')!*!.--'%!2)'7'&$-!RL^?!j!:8^! ! Ericsson TDMA and GSM information sharing events / activities 1982 .representatives from 11 countries 1985 Ericsson presents its TDMA based proposal 1985 system requirements defined. orders equipment from Ericsson Jul-91 Ericsson and GE mobile enter discussions to build a dual-mode handset with analog and TDMA technology Jan-92 CTIA fails to endorse Qualcomm's CDMA Jan-92 Southwestern Bell announces it will order TDMA equipment from Ericsson Feb-92 First GSM handsets receive interim approval for global markets May-92 Ericsson and GE mobile announce dual-mode handset with analog and TDMA technology will be available in Aug 1992 Aug-92 Ericsson and GE mobile announce delay in launch of dual-mode handset with analog and TDMA technology until year end Nov-92 McCaw Cellular announces it will commit to TDMA standard and deploy in Florida markets in early 93 Nov-92 Ericsson and GE mobile launch dual mode handset 1992 Ericsson spends millions to highlight benefits of their TDMA and GSM standards in trade press and industry forums Jul-93 Southwestern Bell launches media blitz for its new TDMA based digital service in Chicago Jul-93 Ameritech backs away from TDMA.#%'3'9=]-! MNGONGHHI! ! 87 ! .'%F/%. it announces market and technology trial doesn't support adoption of TDMA Aug-93 AT&T announces takeover of McCaw Cellular for $12.&/'%-!<*-$+!'%!+/66$)$%&!.S.$!2)'F/+$)-!+$.L^?\!! R#$)$6')$D!&#$!7$--*9$!.3B into Nextel in order to get into digital game Mar-94 Ericsson announces development of new intelligent base station for GSM standard Apr-94 MCI/Nextel announce they will support GSM since it is a proven technology that is ready to go Jun-94 Bellsouth announces support for TDMA due to its availability and proven performance Dec-94 Digital Spectrum Auctions .

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• .&!$)*-!$7$)9$!6)'7!&#$!+*&*!-$&D!$*.&/'%!$)*!/-!.'%%$.?PR!04?8! ! ! R#)$$!+/-&/%.P:!bRU400!8.&/'%!$)*\!!R#$)$!/-!*!7/1&C)$!'6!/%6')7*&/'%!<$/%9!-#*)$+!<=!<'&#!&$.&3=!X/&#/%!&#$!*+'2&/'%!2#*-$\! •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• 09'!0)*5!!R#$!$9'!$)*!/-!.3=!*%%'C%.%6')7*&/'%!-#*)/%9!/-!+/)$.#%'3'9=!-2'%-')-!)$2)$-$%&!*!+'7/%*%&!2')&/'%!'6!&#$!/%6')7*&/'%! -#*)/%9!*%+!*)$!-$$Y/%9!.

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eGHH`f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e-fD!.$!&#$!*+'2&/'%!2)'./*3/B*&/'%!'6!&#$!-&*%+*)+e-f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wireless standards – The Stages of Standard Development and the ERA’s of Information Sharing Development Phase Connection Era GSM 1979 TDMA 1988 CDMA 1988 GSM 1982 TDMA 1989 CDMA 1989 *GSM E 1986 **GSM US 1994 TDMA 1989 CDMA 1989 GSM US 1993 TDMA 1992 CDMA 1992 *GSM E 1992 **GSM US 1996 TDMA 1993 CDMA 1996 Adoption Phase Ego Era Diffusion Phase Commitment Era *Europe ** United States *GSM US 1996 TDMA 1994 CDMA 1995 J/9C)$!i\!8&*9$-!'6!-&*%+*)+!+$F$3'27$%&!*%+!$)*-!'6!/%6')7*&/'%!-#*)/%9!!!! ! ! ! ! ! ! MNGONGHHI! ! 90 ! .

$7B raised COMMITMENT ERA Jun-95 PCS PrimeCo announce they will use CDMA Jul-95 Sprint Technology Ventures (STV) publicly supports their choice of CDMA Oct-95 Hutchinson Telephone of Hong Kong announces launch of first commercial CDMA network Oct-95 Qualcomm claims that Sprint.series of meetings ensues throughout 1989 Mar-89 Qualcomm management visit Ameritech management Apr-89 Qualcomm hires PR firm to develop awareness campaign Apr . Bell Atlantic. Indonesia and Russia STV commits to massive launch with CDMA technology prior to year end Primeco announces it will launch service in several markets using CDMA China places $300M order to Qualcomm for CDMA phones Broadcast Cascade Cascade Broadcast Broadcast Broadcast Cascade Cascade Cascade Broadcast Cascade Broadcast Broadcast Cascade Cascade Cascade Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast !!!! ! ! ! ! MNGONGHHI! ! 91 ! . speeches regarding the technical superiority of CDMA Dec-94 Qualcomm and Northern Telecom sign agreement for the joint manufacture of infrastructure equipment for CDMA Dec-94 Digital Spectrum Auctions . AirTouch.press release identifies capacity benefits of CDMA Dec-93 CDMA development group . Qualcomm sent senior level representatives to speak about CDMA Jun-89 Irwin Jacobs gives presentation at CTIA Jul-89 PacTel agrees to provide $2M to Qualcomm for further development of CDMA Jul-89 Qualcomm executives visit NYNEX Oct-89 Qualcomm executives visit Ameritech Nov-89 Live demonstration at Qualcomm work site.Sept 1990 AT&T.17 companies . Director of marketing at Qualcomm . NYNEX. GTE.'77!2)'7'&$-!. Ameritech. Motorola and PacTel commit $30M for continued development of CDMA Jul-90 Qualcomm distributes Green Book of CDMA to partners and advocates which outlines standard specifications and invites input and feedback Sep-90 Qualcomm senior executive makes series of presentation to Korean government (ETRI and MoC) May-91 Qualcomm and ETRI reach Joint development agreement Oct-91 Qualcomm distributes Gold Book of CDMA standard specifications to partners / advocates.full fledged cellular network .Nov 1989 At every industry conference or symposium. Brazil. China. claims market and technology trial does not support adoption of TDMA Jul-93 CTIA endorses Qualcomm's CDMA as an interim standard IS-95 Dec-93 CDMA development group formed .L^?!! ! Qualcomm and CDMA information sharing events / activities 1989 .final document after revisions Nov-91 Trial of CDMA in San Diego .1997 SEPARATED INTO ERAS CONNECTION ERA Jan-89 CTIA endorses TDMA Feb-89 Qualcomm management visit Pactel management .R*<3$!i\!0)*-!'6!/%6')7*&/'%!-#*)/%9!$F$%&-5!ZC*3.in conjunction with PacTel Dec-91 Qualcomm IPO raises $68M Dec-91 Dr Irwin Jacobs CEO of Qualcomm publicly states that "all questions regarding CDMA have been put to rest" EGO ERA Jan-92 CTIA fails to endorse Qualcomm's CDMA Jan-92 Qualcomm CEO Irwin Jacobs publicly states that CDMA will be commercially available in 12 months May-92 Aggressive PR by Qualcomm / PacTel /Motorola targeted at network operators Jun-92 Ameritech launches 18 month market and technology trial of both TDMA and CDMA Aug-92 US West New Vector announce they will adopt CDMA and sign purchase agreements with Motorola and Northern Telecom 1992 Qualcomm invests millions in communicating the benefits of CDMA in trade press and industry forums Mar-93 BAMS announces they will use CDMA Mar-93 Pactel and Ameritech support CDMA at CTIA board meeting Jun-93 US West claims it will have CDMA up and running in its Seattle market by late 1994 Jul-93 Ameritech backs away from TDMA. news media.press release stating "CDMA is ready to go" 1994 Qualcomm makes public claims via press releases. manufacturers and operators attend Dec-89 Qualcomm / PacTel l/ Motorola reach development agreement Feb-90 Qualcomm & NYNEX conduct live trial in New York Mar . NYNEX and US West are all committed to the commercial use of Dec-95 South Korea announces launch of commercial CDMA network Jan-96 Jan-96 Feb-96 Mar-96 Nov-96 Oct-96 Feb-97 STV requests Motorola to provide last minute financial guarantees in case of system failures for CDMA roll-out Motorola refuses to provide guarantees to STV. Nortel / Lucent agree to performance guarantees Qualcomm claims 10 of top 14 Cellular operators have committed to CDMA CDMA development group announce deployment of CDMA in India. Ameritech.acts as mechanism for sharing information and building relationships Jan-94 Thomas Crawford.

.=!X/&#/%!&#$!$)*-\!!R#$!#/9#$-&!/%-&*%.'72/3*&/'%!'6!/%6')7*&/'%!-#*)/%9!$F$%&-!6')!*33!&#)$$!-&*%+*)+-D!-$2*)*&$+! <=!<)'*+.Dec 94 Ericsson releases a series of white papers aimed at discrediting CDMA Mar-95 American Personal Communications pledges to support GSM standard Mar-95 Pacific Bell agrees to $300M deal with Ericsson for GSM equipment for deployment in California and Nevada markets Nov-96 Omnipoint announces roll out of GSM based service Dec-96 AT&T attempts to pre-empt competitors and announces roll out of new digital service based on TDMA Nov-97 Seven regional GSM carriers announce the North American GSM alliance group formation Nov-97 Seven regional GSM carriers form the North American GSM alliance group Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Cascade Broadcast Broadcast Broadcast Cascade Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Broadcast Cascade ! ! ! R*<3$-!i!*%+!`H!+/-23*=!&#$!-*7$!-$&!'6!/%6')7*&/'%!-#*)/%9!$F$%&-!*-!R*<3$-!OD!ID!MD!*%+!h!<C&! X/&#!&#$!$)*-!/+$%&/6/$+\!!! J/9C)$!`H!+/-23*=-!&#$!.*+$!/%6')7*&/'%!-#*)/%9!'. CTIA endorses TDMA version of a digital standard based on Ericsson's GSM proposal for the EU 1991 Ericsson continues to publicly state at every opportunity their disbelief in the claims being made about CDMA by Qualcomm Feb-91 Los Angeles Cellular Telephone Co.R*<3$!`H\! 0)*-!'6!/%6')7*&/'%!-#*)/%9!$F$%&-5!0)/.$7B raised Jun . orders equipment from Ericsson Jul-91 Ericsson and GE mobile enter discussions to build a dual-mode handset with analog and TDMA technology EGO ERA Jan-92 CTIA fails to endorse Qualcomm's CDMA Jan-92 Southwestern Bell announces it will order TDMA equipment from Ericsson Feb-92 First GSM handsets receive interim approval for global markets May-92 Ericsson and GE mobile announce dual-mode handset with analog and TDMA technology will be available in Aug 1992 Aug-92 Ericsson and GE mobile announce delay in launch of dual-mode handset with analog and TDMA technology until year end Nov-92 McCaw Cellular announces it will commit to TDMA standard and deploy in Florida markets in early 93 Nov-92 Ericsson and GE mobile launch dual mode handset 1992 Ericsson spends millions to highlight benefits of their TDMA and GSM standards in trade press and industry forums Jul-93 Southwestern Bell launches media blitz for its new TDMA based digital service in Chicago Jul-93 Ameritech backs away from TDMA.'%%$.S.*-.1991 GSM standard details defined Jan-89 In the U.6B Oct .&/'%!$)*!*%+!&#*&!&#$-$!/%-&*%.*-.*-.*+$!*%+!+/-23*=$+!*.*-&!/%6')7*&/'%!-#*)/%9! MNGONGHHI! ! 92 ! .3B into Nextel in order to get into digital game Mar-94 Ericsson announces development of new intelligent base station for GSM standard Apr-94 MCI/Nextel announce they will support GSM since it is a proven technology that is ready to go Jun-94 Bellsouth announces support for TDMA due to its availability and proven performance Dec-94 Digital Spectrum Auctions .1997 SEPARATED INTO ERAS CONNECTION ERA 1982 Stockholm inaugural meeting for GSM standard .. publicly commits to TDMA.C)!/%!&#$!.')+/%9!&'!6)$KC$%.'77/&7$%&!$)*-\!R#$!C-$!'6!<)'*+.$-!'6! .representatives from 11 countries 1985 Ericsson presents its TDMA based proposal 1985 system requirements defined.*-&!')!. circulated and endorsed 1985 development of technical details for GSM begins Jun-86 standard Oct-86 All parties supporting Ericsson proposal with the exception of French and German governments Nov-86 Ericsson goes into a cooperation agreement with Siemens (German telecommunication manufacturer) for the GSM standard Nov-86 Ericsson signs a development agreement with LTC (French telephone operator) for the GSM standard based on its TDMA version Feb-87 GSM standard to be based on Ericsson TDMA proposal 1987 . at conventions and on internet forums against CDMA COMMITMENT ERA Jan-94 MCI announces it will invest $1.3/%$!*-!X$!$%&$)!&#$!$9'!*%+!.*+$!/%6')7*&/'%! -#*)/%9!+$.Dec 93 AT&T with Southwestern Bell send out a torrent of attacks in the trade press.--'%!2)'7'&$-!RL^?!j!:8^! Ericsson TDMA and GSM information sharing events / activities 1982 . it announces market and technology trial doesn't support adoption of TDMA Aug-93 AT&T announces takeover of McCaw Cellular for $12.$-!'6!.

*+$!*%+!<)'*+.1990 Connection era 1991-1996 Ego era 1997 Commitment era J/9C)$!`H\!.2$*Y-!/%!&#$!$9'!$)*D!<C&!&#$)$!/-!*3-'!7C.'%&/%C$+!C-$!&#)'C9#'C&!&#$!.$!'6!/&-!./+$%.'77/&7$%&! $)*\!!!! All Standards Combined .*-&!/%6')7*&/'%!-#*)/%9! ! MNGONGHHI! ! 93 ! .Instances of Cascade and Broadcast 45 Cascade 40 Broadcast 35 30 Instances 25 20 15 10 5 0 1982 .$!'6!.%.#!$F/+$%.*-.

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b!'F$)!MOq\!!U$)$!&#$!$F/+$%.*-&!6')!<'&#! &$.&/'%!$)*!'%!&#$!C-$!'6! /%6')7*&/'%!.%!&#$!/%/&/*3!=$*)-!'6!&#$!-&*%+*)+!+$F$3'27$%&!2#*-$D!X#$%!&#$!&$.'77]-!-$%/')!7*%*9$7$%&!&$*7!/+$%&/6/$-!*%+! C%+$)&*Y$-!6*.'7</%*&/'%!'6!<)'*+.--'%\!!R#C-!*!-&)'%9!&/$!7'-&! 3/Y$3=!$1/-&$+!#$)$!*-!X$33\!!!(=!`ii`D!%$*)!&#$!$%+!'6!&#$!.$--!'6!.&! <$&X$$%!2*)&/$-!*%+!&#$!+$3/F$)=!'6!.$2&*%.#!*%+!P=%$1\!!R#$-$!7$$&/%9-! 7')$!&#*%!'%.&/F/&=!X'C3+!*3-'!)$KC/)$!6)$KC$%&!.L^?!X/&#! ZC*3.C-!/%!&#$!.$!'6! .'%%$.$d&'d6*.'%&*.$!'6!-&)'%9!&/$-!*3-'!3/$-! /%!&#$!C-$!'6!+$F$3'27$%&!*%+!.R#)'C9#'C&!&#$!-&C+=!2$)/'+D!<'&#!0)/.*+$! -#*)/%9!+$.#%/.$!*%+!)$3*&/'%-#/2-!<C/3+!<$&X$$%!&#$!/%F'3F$+!2*)&/$-\!!?-!2)''6!'6!&#$-$!)$3*&/'%-#/2-!*%+! &#$!*</3/&=!&'!+$-.&/'%! $)*!6')!.&!&#)'C9#!-&)'%9!&/$-!6')!&#$!%$.!*%+!-&)*&$9/.*-.&/'%-!<$&X$$%!7$7<$)-!'6!&#$!.%!&#$!.*-&! *%+!.'723$1!/%6')7*&/'%!)$9*)+/%9!&#$!&$.$!'6!-&)'%9!&/$-!')! )$3*&/'%-#/2!.R$3!$%&$)-!/%&'!+$F$3'27$%&!*9)$$7$%&-!6')!.'723$1!&$.?!*%+!0)/.^L?D!OHq!'6!&#$!/+$%&/6/$+!/%6')7*&/'%!-#*)/%9!*.$!'&#$)-!&'!-C22')&!.$!'%!&#$!)$3/*%..&! $F/+$%.'77]-! 7$--*9$!X*-!%$X!*%+!.$!'%$!*+'2&$)!.$!&#$!2)'.#%'3'9=\!!.'77!&'!3'.'%%$.#%/KC$-D!X/&#!&#$!6'.*33=!*%+!&#$)$!/-!*!-#/6&!&'X*)+-!&#$!2)$+'7/%*%&!C-$!'6!<)'*+.'%'7/.'77C%/.L^?\!!R#/-!*.*&/'%!'6!ZC*3.L^?\!!R#$!-C22')&!'6!&#$-$!'2$)*&')-!X'C3+!/%63C$%.R.*+$-\!!.'C3+!<C/3+!)$3*&/'%-#/2-!X/&#!&#*&! *33'X$+!6')!'%9'/%9!+/)$.!+$-/9%!/--C$-!X$)$!<$/%9!+$.

$--!'6!/%6')7*&/'%! .$!'6!3/.*3!-&*%+*)+! 2)/7*)/3=!'..'C%&/%9!6')!3$--!&#*%!`Oq!'6!/%6')7*&/'%!-#*)/%9!$F$%&-!<=!&#$!&X'!-2'%-')-! .'7</%$+\!!.$!+$F$3'27$%&!'6!&#$!&$.$+\!!T%$!2'&$%&/*3!/%+/.%6')7*&/'%!-#*)/%9!/%!&#$!.C3*)!2'/%&!/%!&/7$\!!J')!*+'2&$)-D!/&! .&/'%\! J/9C)$!``!+/-23*=-!&#$!6)$KC$%.&/'%!$)*D!/&!/-!#$)$!&#*&!&#$!9)$*&$-&!%C7<$)-!'6!+$F$3'27$%&! *9)$$7$%&-!*)$!*%%'C%..'77/&7$%&!$)*D!&#$)$!/-!3/&&3$!.')+/%9!&'!$)*-\!!8/%./2*&/%9!/%D!*)$!3/.3*/7!&#$/)!-C22')&\!!U$)$!&#$!&/$! -&)$%9&#!<$&X$$%!-2'%-')-!*%+!*+'2&$)-!/-!2)/7*)/3=!X$*Y!*-!/%&$)7$+/*)/$-!*)$!7*%*9/%9!&#$!&)*%-6$)!'6! /%6')7*&/'%!/%!&#$-$!$)*-\!!!!! T&#$)!/%+/.R$3D!?7$)/&$.'%&$-&!/-!7'F/%9!/%&'!&#$!$9'!$)*!/-!&#$!/%.'9%/&/'%!/-! .L^?!-&*%+*)+\! ?-!<'&#!6/)7-!$%&$)$+!&#$!$9'!$)*!/%!`ii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TDMA & GSM cascade events # license agreements 18 16 14 Frequency of Event 12 10 8 6 4 2 0 -2 year 1 year 2 Connection Era year 3 year 1 year 2 year 1 year2 year 3 year 4 Ego Era Commitment Era broadcast events # adoptions # development agreements J/9C)$!``\!J*.&')-!*66$.CDMA.Factors Affecting Standards Process Seperated by Era All Three Competing Standards .&/%9!&#$!-&*%+*)+-!2)'.$--! MNGONGHHI! ! 97 ! .

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MNGONGHHI!

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