Competing Through Cooperation: The Organization of Standard Setting in Wireless Telecommunications

Abstract

This study examines cooperative standard setting in wireless telecommunications. Focusing on the competition among firms to influence formal standardization, the roles of standard-setting committees, private alliances, and industry consortia are highlighted. The empirical context is Third Generation Partnership Project (3GPP), an international standards-development organization in the wireless telecommunication industry. Panel data analyses exploiting natural experiments caused by a consortium merger and entry of Asian firms suggest that participation in industry consortia increases firms' contributions to the development of new technical specifications in 3GPP committees. Moreover, connections to standard-setting peers formed in consortia facilitate change requests to ongoing specifications. These results suggest that if firms in network technology industries want to influence the evolution of their industry, they should identify both formal standard-setting committees and industry consortia in which they can discuss, negotiate, and align positions on technical features with their peers. For policymakers, these results suggest that it is important to ensure that technical consortia remain open for all industry actors and that membership fees do not become prohibitive to small and resource-constrained players.