The Role of Harmonized Standards in Liberalized Telecom Markets

Across telecommunications markets, harmonization is a subsequent and natural necessary step to liberalization. While liberalization opens markets, harmonization encourages competition by removing trade barriers. The satellite industry, being global by nature, has been a special beneficiary of harmonization efforts.

But what does it mean to harmonize? The dictionary definition is “to bring things together or into harmony or to make things compatible.” Telecommunications is about “communicating” and implicitly, parties that communicate must subscribe to compatible standards.

The International Telecommunications Union (ITU) plays a big role in bringing agreement to the utilization of satellite orbits and electromagnetic frequency bands. The ITU table of frequency allocations is in large part adopted at regional and local levels.

Yet, while the notion of harmonization is readily understood at the conceptual level, practically, the idea has a wide connotation. Harmonization also means agreement in telecommunications principles, in policy objectives and in technical standards.

In 1984, the European Council enacted a recommendation regarding the implementation of harmonization in the field of telecommunications. “Member States,” the Council said, “shall ensure that the telecommunications administrations…consult each other…before they introduce a new service…with a view to establishing common guidelines so that the necessary innovation takes place under conditions compatible with harmonization….” In liberalized telecommunications markets, harmonization principles encompass access, interconnection, transparency and non-discrimination. The 1996 amendment to the U.S. Telecommunications Act mandated interconnection. Its primary goal was to move telecommunications markets towards competition.

Harmonization of telecommunications policy objectives is more difficult to achieve. Different states, even in liberalized markets, think differently regarding local concerns such as consumer privacy and safety. Even within the European Union, harmonization of telecommunications policy objectives has not been as successful as liberalization.

Perhaps the area where harmonization has advanced the furthest is at the technical level. When equipment manufacturers operate under a harmonized standard, consumers can interconnect and exchange devices. That is, consumers have a choice of manufacturers. For example, a mobile subscriber to a Global System for Mobile Communications (GSM) network can choose a Samsung Galaxy, a Blackberry Curve or an Apple iPhone because all operate on the GSM standard. The European Telecommunications Standards Institute (ETSI) introduced the GSM standard as a digital cellular technology to replace a number of incompatible analog systems. With more than 700 member organizations drawn from 62 countries, ETSI has played a central role in producing harmonized standards in mobile, broadcast and fixed satellite systems. Also, it has established standards in earth stations on vessels, trains and aircraft. Work is underway for standards in IP-based satellite services, interoperability and integration of mobile and fixed satellite systems.

Another type of technical harmonization is equipment certifications (i.e., type approvals). Type approvals protect people, equipment and networks. The “FCC” or “CE” logo on the back of an iPhone means that the phone has met the U.S. and EU technical standards for manufacture and sale in those jurisdictions respectively. Type approvals are concerned primarily with ensuring that equipment is safe to operate without causing harmful interference to other equipment.

Harmonized standards have played an important role in liberalized telecommunications markets. On a global scale, markets are at various levels of liberalization. Regulatory frameworks are at different levels of development and implementation. In the end, telecommunications harmonization removes trade barriers. As technology advances and new methods are introduced, the harmonization cycle continues to turn, and thus telecommunications harmonization continues to be a work in progress.