GSM vs CDMA: Why Free Markets Work

You've probably heard from your European friends / world travelers that GSM (the ubiquitous cellular technology in Europe) is far superior to CDMA (a technology nearly as prevalent in the US) since a GSM phone will work anywhere in Europe and because of some of the ancillary features of the technology (SIM chips, etc).

Reading an article from an ex-Qualcomm employee, you get a strikingly different viewpoint. Without making this too technical, let's reduce his argument to three points:

1. GSM uses an antiquated air interface called TDMA.
2. TDMA has no future and will have to be replaced by CDMA world-wide in the next few years or Europeans will be using the cellular equivalent of dial-up internet across the continent.
3. In order to upgrade GSM to CDMA (or WCDMA as the Euros have dubbed it), all of Europe's phones and cellular equipment will have to be replaced.
   

There are many reasons for the above, but they're outside the scope of this post (ie, read the article). What I find interesting is that during the 1990s the EC made it illegal to buy spectrum for any cellular technology other than GSM. This decision had some nice short-term benefits, which I'm sure you've already heard from your non-technical European friends.

But command economy decisions like this generally have serious shortcomings as did this one. While the Europeans were pumping out GSM equipment across their continent and across the third world in an almost mercantalist manner, the US was experimenting with several technologies, GSM included. The FCC-- an organization for which I don't have much love-- made a smart move: they allowed just about any cellular technology that was safe and reasonable to be deployed, and several were. During the years that followed, a natural shakeup occurred and CDMA technologies like CDMA2k came out on top.

Now the Europeans are scrambling to adopt CDMA, but they realize how much of an uphill battle it will be considering their monolithic adoption of GSM even after the writing was on the wall for TDMA.

This is a classic example of human laziness enabled by the command economy. People don't want to innovate-- they want to eat croissants and smoke cigarettes, but if that's all we did, the world would still be in the dark ages of chamber pots and well... GSM.