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Thursday, April 29, 2004

Hey, we won the war

"Hey, we won the war"

Iraq Cellular Project Leads to U.S. Inquiry
A Pentagon official acted to award a contract to a group that included his friends.
By T. Christian Miller, Times Staff Writer

WASHINGTON — A senior Defense Department official is under investigation by the Pentagon inspector general for allegations that he attempted to alter a contract proposal in Iraq to benefit a mobile phone consortium that includes friends and colleagues, according to documents obtained by The Times and sources with direct knowledge of the process.

John A. Shaw, 64, the deputy undersecretary for international technology security, sought to transform a relatively minor police and fire communications proposal into a contract allowing the creation of an Iraq-wide commercial cellular network that could generate hundreds of millions of dollars in revenue per year, the sources said.   
 Shaw brought pressure on officials at the U.S.-led Coalition Provisional Authority in Baghdad to change the contract language and grant the consortium a noncompetitive bid, according to the sources.

The consortium, under the guidance of a firm owned by Alaskan natives, consisted of an Irish telecommunications entrepreneur, former officials in the first Bush administration and such leading telecommunications companies as Lucent and Qualcomm, according to sources and consortium members.

Shaw's efforts resulted in a dispute at the Coalition Provisional Authority that has delayed the contract, depriving U.S. military officials and Iraqi police officers, firefighters, ambulance drivers and border guards of a joint communications system.

That has angered top U.S. officials and members of the U.S.-led authority governing Iraq, who say the deaths of many Americans and Iraqis might have been prevented with better communications.

In interviews, Shaw said he had a long-standing personal relationship with at least one member of the consortium, but had no financial ties or agreement with the consortium for future employment. One other member of the consortium's board of directors is under contract with his office as a researcher.

Shaw said he was trying to help the group because it could quickly install the police and fire communications system, and because the group was using a U.S.-based cellphone technology called CDMA that had lost out in what he called a "rigged" competition last year for commercial licenses in Iraq. Three companies using European-based technology won contracts.

Additionally, Shaw said that he had been contacted by Rep. Darrell E. Issa, a Republican whose San Diego County district was packed with Qualcomm employees, and the office of Republican Sen. Conrad R. Burns of Montana, the head of the Commerce Committee's communications subcommittee, urging him to ensure that U.S. technology was allowed to compete for cellular phone contracts in Iraq. Issa confirmed they he had contacted Shaw on the issue. Burns' office did not respond to inquiries.

CDMA, which was developed by Qualcomm, is used in the United States and some countries in Asia. Its rival, a standard developed by Europeans called GSM, is used in the U.S., Europe and the Middle East.

"Hey, we won the war," Shaw said in an interview. "Is it not in our interests to have the most advanced system that we possibly can that can then become the dominant standard in the region?

Here is a GSM vs CDMA map of the world. Notice that ALL of the countries in the Middle East are GSM only. Introducing a CDMA network into the region effectively prevents local cellular companies from bidding on Iraqi work projects.

There is a long, taudry history of Darrel Issa pushing Qualcomm's CDMA, the worldwide loser in the GSM/CDMA battle, on Iraq.

As US troops were fighting their way to Baghdad, there was already a fierce bidding war to slide CDMA into Iraq. As the Register notes:

Spread-spectrum radio began life as a military technology; Qualcomm grew fat on Pentagon pork defense contracts in the late Reagan years as it sought to tame CDMA for civilian use. Which it eventually did, after many delays, and with some admirable panache. Only CDMA arrived, when it eventually did arrive - three years after co-founder Dr Jacobs promised - too late to make an impact on the cellphone industry as it was. The world had multilaterally decided on an older time-division digital technology several years previously.

The result is that the world has a single standard, and enjoys economies of scale and very, very cool gadgets. The USA on the other hand decided to allow four incompatible standards to battle it out, thus blocking innovation from overseas, and allowing cellphone carriers to play atrocious bait and switch games with cellphone users.

Like so many things connected to the CPA and Iraq, the whole wireless phone contracting process has been tainted with corruption. As fighting was going on, MCI was awarded a contract to develop a wireless phone network in Iraq.

WorldCom's Iraq deal assailed
Critics wonder why MCI got contract after fraud scandal

NEW YORK -- The Pentagon made an interesting choice when it hired a U.S. company to build a small wireless phone network in Iraq: MCI, aka WorldCom Inc., perpetrator of the biggest accounting fraud in U.S. business and not exactly a big name in cellular service.

The Iraq contract incensed WorldCom rivals and government watchdogs who say Washington has been too kind to the company since WorldCom revealed its $11 billion accounting fraud and plunged into bankruptcy last year.

"We don't understand why MCI would be awarded this business, given its status as having committed the largest corporate fraud in history," AT&T Corp. spokesman Jim McGann said. "There are many qualified, financially stable companies that could have been awarded that business, including us."

The whole Bush approach to Iraq's economy is about the same as GI's who robbed Iraqis during searches of their home. It was never about helping Iraqis, but getting rich. Foisting CDMA on Iraq was never in Iraq's best interest. Any more than the flag they cooked up.

As I watched the BBC News last night, Iraqis outside Fallujah took a new Iraqi flag and burned it. As I laughed, the presenter said that the locals called it the flag of the infidel.

It it any surprise that someone connected to this CDMA fiasco now needs a lawyer?

posted by Steve @ 10:38:00 AM

10:38:00 AM

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