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Legislator makes call for Qualcomm

By Declan McCullagh
Staff Writer, CNET News.com
March 27, 2003, 6:00 PM PT

WASHINGTON--Call it wartime constituent service, on a global scale.

Rep. Darrell Issa, a Republican who represents the corner of California where Qualcomm's headquarters is located, believes that company's technology must be used in Iraq's post-war cell phone system. Qualcomm was one of Issa's top 10 corporate donors in the last election.

Issa introduced a bill this week that would bar the Global System for Mobile Communications (GSM)--a cellular technology used in many European nations and to a lesser extent in the United States--from being considered in the rebuilding of Iraq.

The legislation is straightforward: "The Administrator of the United States Agency for International Development and the Secretary of Defense shall require that CDMA technology be used for such communication service." A study released this month said by the end of 2002, about 43 percent of all cell phones in the United States used Qualcomm's Code Division Multiple Access (CDMA) technology.

Patents relating to rival GSM technology, on the other hand, are owned by a consortium of most of the world's major wireless makers, including Motorola, Ericsson and Nokia.

"If U.S. taxpayers are going to be gifting billions of dollars in technology and infrastructure to the Iraqi people we ought to make sure, to the greatest extent possible, that those expenditures also benefit the American people and the American economy," Issa said Thursday. "If we build a system based on European technology, the Europeans will receive the royalties, not U.S. patent holders. From an investment standpoint, that is a bad decision."

Issa's proposal also requires that the U.S. government "shall give preference, to the greatest extent practicable, to qualified American entities" when awarding contracts for reconstructing Iraq. This week, Vice President Dick Cheney's previous employer, Halliburton, said that it received a contract--but refused to disclose the dollar value--from the U.S. Army to rehabilitate Iraq's oil infrastructure.

Qualcomm did not respond to a request for comment Thursday. The company's shares closed at $37.60, down 83 cents, or 2 percent.

The GSM Association responded to the bill by sending a statement to reporters saying: "Congressman Issa's intervention that GSM is an 'outdated French standard' is as ill-timed as it is misinformed...GSM is an 'open standard,' which means any manufacturer from any country can make GSM equipment on a 'level playing field'-including North American companies such as Motorola, Lucent and Nortel."

GSM is already deployed in every country of the Middle East, and CDMA is not deployed in any, the association said, and added that GSM was installed in postwar Afghanistan by an American company.

Issa and other politicians also wrote a letter to Defense Secretary Donald Rumsfeld and Wendy Chamberlain, director of the United States Agency for International Development, objecting to the Bush administration's decision to adopt GSM in Iraq.

Before being elected, Issa founded a California company named Directed Electronics and has been the chairman of the Consumer Electronics Association. He represents parts of Orange, San Diego, and Riverside counties.


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