Telecommunications: Primacy of Power and Regulatory Battles for Promoting National Standards - Part 13

The TD standard has received full blessings from the Beijing government. First and foremost, the government has provided generous financial support to develop and commercialize the standard. Until now, the National Development and Reform Commission (NDRC), the Ministry of Science and Technology and the Ministry of Information have deployed about 1.4 billion yuan (about US $200 million) into this project. At the “3G in China Global Summit” in 2006, high-level officials from the Ministry of Information Technology revealed that the NDRC and the two ministries had promised to invest 200 million yuan (US $30 million) for the next step of network testing, including equipment purchase and network optimizing services (Tan, 2006). Government ministries and agencies, notably the Ministry of Science and Technology, the State Commission of Development and Reform, and the Ministry of Information Industry, have been directly involved in the whole process of research, development, and commercialization. Government provides secretariats to manage domestic standards development processes, publish standards, and support national representation at international standards meetings. On October 30, 2002, the TD-SCDMA Industry Alliance was established in Beijing, aimed at cultivating and accelerating the TD industrialization. It has been fully endorsed by the State Development Planning Committee (SDPC), Ministry of Information Industry (MII) and Ministry of Science and Technology (MOST). At the end of January 2006, TD-SCDMA was formally identified as China's 3G national standard. In March 2006, the final network test was launched.

Second, the Ministry of Information Industry allocated two blocks of spectrum, totaling 155-MHz of bandwidth in which 35 MHz is the core spectrum allocated by ITU, to TD-SCDMA technology. In the same allocation the two dominant global standards, WCDMA and CDMA 2000 1x were each granted a 60-MHz block (Clendenin, 2002). The decision, made in October 2002, was a significant milestone in the development of the TD-SCDMA standard. Backers of the technology interpreted this favorable allocation as a signal that the government is serious about its pursuit of national standards strategy.

Third, the TD standard was developed about ten years later than the other two dominant 3G standards, WCDMA and CDMA 2000, so the maturation and commercialization of the TD standard still needs time. With the hope that China's latecomer technology can compete with the two Western-developed ones in terms of network speed, greater voice capacity, and a range of interactive data features, the government consciously delayed the decision to issue 3G licenses for operations.

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