Whether described as a multiverse (the catch phrase of the day) or as an ecosystem (my preferred word), in order to accurately frame any discussion of SEP licensing, it is important to understand the three primary levels, as well as some of the many sublevels, of that ecosystem.[1] This post is a deeper dive into the cellular ecosystem but, because that ecosystem is similar for many other telecommunications and networking standards, it also serves to inform discussion of these other standards.
Level 1 – the Standard Setters
The first level of the cellular ecosystem is the standard setters. For some standards, there is a single entity that develops and adopts the standard. For cellular standards[2], there are two primary (and several additional) organizations responsible for development and adoption:
1. The Standard Developer – the 3rd Generation Partnership Project (aka 3GPP). 3GPP is the organization that develops the technical specifications that become the cellular standards. It has intricate membership rules that require participants (i.e. the companies and other entities that can send individuals to meetings) to be members of at least one of 3GPPs Organizational Partners.[3]
2. The Standard Setting Body (“SSO”) - the European Telecommunications Standards Institute (aka ETSI) and several other standards institutes and associations turn 3GPPs technical specifications into a largely global standard through adoption. ETSI’s members (and thus 3GPP's participants) tend to be large to enormous cellular chip and telecommunications and electronics device makers. ETSI's membership also includes government and quasi-government institutes and bodies, universities and cellular service providers (more about the service providers below).[4]
Level 2 – the Implementers
The next level of the ecosystem is the implementers. For the cellular standards, there are many different levels of implementers starting with the front-line implementers (the chipmakers) and going all the way down to companies that buy off the shelf components in order to use connectivity in their products. At each stage of implementation, more non-cellular technology and other value (such as brand reputation, reliability and quality) is added to what becomes the final end product.
The price charged at each stage along this implementation path depends primarily on the added non-cellular functionality and other added value contributed by the implementer. Even at the chip level (the first level of implementation), prices may vary by a factor of three or more based on non-cellular features, functions, speed, quality and the like.[5] Here are some of the primary types of implementers:
1. Chipmakers - Cellular standards are implemented primarily in semiconductor chips. The chipmakers take the written standard (which is essentially a set of specifications) and turn it into cellular chips that are functional versions of that standard. There’s a lot more to how that happens and a lot more to designing and manufacturing a cellular chip but, for now, let’s leave it at this simplified level. The chipmakers are the first-level implementers of most aspects of the cellular standard.
2. Module and Modem Makers. Chipmakers may sell their cellular chips to module or modem makers. Companies that operate at the module level take cellular chips, package them up with other components (generally including non-cellular chips, antennas and sometimes additional radios, as well as coupling mechanisms) on a printed circuit board (PCB) to make a more complex component that makes it easier to put the cellular chip into a downstream device.
Modules, however, are not turnkey components. There is still more work that has to be done to turn a module into a component that has everything required to use the cellular chip in a downstream device. Modem makers take a chip or module and add even more functionality (usually including power technologies and hardware interfaces) to make a drop in component that contains all the sub-pieces required to power up and use the cellular chip, including power interfaces, radios, antennas and the hardware necessary to connect the modem into the next level device.
3. The Chipmakers Again – SoCs and SiPs. In recent years, some chipmakers have started to cut out some of the middle layers of implementation. In particular, there has been a surge of “system-on-chips” (“SoCs”) and “system-in-packaging” (“SiPs”) products that combine cellular with other functionality. SoCs generally have a processor, memory and essential peripherals in a single circuit die. SiPs combine multiple kinds of chips that provide different functionality and package them with additional components together into a single product. SiPs are akin to combining multiple modules or modems each of which perform different functions and implement different standards into a single component.[6]
4. The Base Station Makers. There is a side to cellular communications that most of us know little about. A cellular end user device must communicate with something in order for a cell phone to connect to the transmission network. In common parlance, these connection points are the ubiquitous cell towers that line our roads and highways. Cell towers have lots of antennas, a power connection (and usually backup power generation) and also base station devices that serve as the radio connection point between a cellular user device and the core backend networks that transmit voice, video and data.
In a 4G/LTE network, these base station devices are known as evolvedNodeBs or eNodeBs. These eNodeBs and other types of cellular base stations also implement the cellular standards. There are only a very few companies that make cellular base stations – Huawei, Ericsson and Nokia sell nearly three quarters (3/4) of the world’s cellular base stations .[7] All three of these entities are ETSI members and participate in 3GPP. Like the participating device makers, they care a lot about the technology that goes into the cellular standard, are knowledgeable about it and hold a lot of declared SEPs. There are other devices in the backend that also implement aspects of the cellular standards, although the base stations are the primary network side devices that implement the RAN (radio access network) aspects of the cellular standards.
5. Participating End User Device Makers. The next step down in our value chain are the participating device makers. For the cellular standard, these are generally large, sophisticated end user device makers in the telecommunications or electronics industries. These device makers tend to care about the technology that goes into the cellular standard and so are often members of ETSI and participants in 3GPP. Because they so often participate in developing and setting cellular standards, they usually are knowledgeable about the technology used in the standard and about the process of standardization. They know the players (the other entities that participate in cellular standard development and standardization), may have a vote in what technology is adopted into the standard and usually understand how SEP licensing works (although the lack of transparency in the current system of SEP licensing means that even their insight is limited). They also tend to be more active implementers, sometimes working with chip, module or modem makers to develop specialized chips, modules or modems, or versions of them, to use in their products.
6. Passive Implementers – the Non-Participating Device Makers. The last of our implementers are those device makers who do not participate in cellular standard development and are not usually active implementers. For the most part, these “passive” implementers buy off the shelf cellular components made by other companies to use in their products. They tend to be smaller, less sophisticated companies and even if large, rarely know or understand much about how the cellular technology in those components works. IoT and green tech companies usually fall into this category - they may for example make medical devices, smart meters, electric cars or charging stations, home thermostats, or remote sensing equipment for agricultural use or environmental management. These companies use connectivity in their products, but they generally are indifferent to the technology that goes into providing that connectivity as long as it works.
Level 3 - The Users and Super Users.
The final level of the ecosystem are the users. Almost all of us are purchasers of cellular technology and probably daily users of that technology. I personally have two cell phones and you probably have at least one. You may also have a connected car or cellular enabled IoT device or smart meter at your house.
But our use is dwarfed by the cellular “super users.” These companies are not usually called super users in normal parlance but that is what they are – incredibly large consumers and users of cellular and other telecommunications and networking equipment and technology.
In the cellular space, these super users were once called “telephone companies” but now are more typically referred to as “service providers.” These are companies such as AT&T, Deutsche Telekom, Verizon, British Telecom, Orange, Telefonica and the like. Many of these service providers form the foundation of ETSI (and other telecommunications-focused standards organizations), although these days their actual contributions to standards development (e.g. in 3GPP) are dwarfed by those from the chipmakers, the base station makers and the participating device makers.
Service providers rarely implement cellular standards into their own products (they rarely make any products at all), but they do care about how cellular technology works because they buy large quantities of devices that implement cellular standards to use in their networks. They also buy vast amounts of other types of telecommunications, networking, storage and other equipment and physical infrastructure products (such as wires, cables and telephone poles) which do not implement cellular standards. They also buy or develop software and assemble all of these devices, software and physical infrastructure products together into large functional, private or quasi-private networks. These networks are in turn interconnected with each other, and with other systems (often with the support of governments or international bodies), to form the world’s communications systems, including big chunks of the Internet.
These multifaceted, interconnected networks have a lot of different types of features and functionality, much standardized, but much not. These networks have technology to recognize what a “phone number” is and how to find the phone with that particular number regardless of where it physically resides (as long as it is a landline or close enough to a WiFi access point or the right cell tower to be in service range). The networks have technology that connects a phone or other device trying to call a phone via a phone number with the phone that is associated with that particular phone number. The networks have technology that transmits voice or video between the two (or more) parties to such a call. They have technology that translates the URL you put into your browser for a website you would like to browse into something that identifies and finds that website (or which blocks your access to it). The have technology to transmit data between that website and your phone or other device.
Some of these entities may (re)sell cellular devices to enterprises or individual users (for example, I bought one of my cell phones from an AT&T branded shop), but they primarily function to provide connection, transmission and similar services by selling access to their networks to individuals and businesses. Through very complex agreements, they may also provide access to other companies’ interconnected networks (which in cellular parlance is often called “roaming”).
Providing these services is not the same thing as making a device that implements the cellular standard. The service providers sell access to incredibly complicated short-haul and long-haul back-end systems that take voice, video and other communications and data from one location and transmit them to other locations throughout the world. What is being sold - the access and transmission services - may use cellular technology as part of how the services are provided (or not), but the services being sold are not themselves implementations of the cellular standard.[8]
That is a simplified overview of the cellular ecosystem and of how cellular standards are developed, adopted and implemented into the devices we all know and use (and into many other devices we know a lot less about). Hopefully it is useful to understanding the differences between different kinds of implementers and between implementers and service providers.
[1] Even this is an over simplified version of the ecosystem. Most chipmakers, and many telecommunications, networking and device companies, design products but outsource manufacturing and sometimes portions of their sales to other companies. So the development, supply, manufacturing and sales chains are often much more complex than is described here. I will use the word “maker” to designate a company that designs a product, even if they “have made” the product and do not themselves manufacture it, and will use “making” and similar words for the act of creating a product by these companies even if they are not themselves the manufacturer.
[2] I will inconsistently use cellular standard and cellular standards to describe the various different technical specifications that comprise different aspects of what is often called "the" cellular standard.
[3] 3GPP’s Organizational Members include ETSI, the Alliance for Telecommunications Industry Solutions “ATIS” which is headquartered in Washington D.C. and whose board is mostly comprised of large U.S. service providers, the China Communications Standards Association, the Telecommunications Standards Development Society, India and several other standard setting or standard development organizations. These organizations are the bulk of 3GPPs Organizational Partners. Generally, in order to participate in a 3GPP standard development meeting, an individual must be sent by an entity that in turn is a member of ETSI or one of these other bodies. Membership (3gpp.org)
[5] From $15-50 dollars according to the participants at the LVS-SVC panel I attended, to as much as $75 or more from what I understand from other sources.
[6] For example, more than a decade ago, Qualcomm started selling a type of cellular SoC it called SnapDragon®. Several years later, it began selling cellular modem products using the SnapDragon® chips which it also called SnapDragon®. It now sells a system-in-package called—you guessed it— SnapDragon® that “combines multiple high-end software and hardware components into one robust, feature-rich” package that implements numerous and varied standards including: 2G/3G/4G/LTE, WiFi, Bluetooth, H.264 (advanced video coding), high efficiency video coding (“HEVC”) and USB (universal serial bus). See, prod_brief_qcom_system-in-package.pdf (qualcomm.com) and Snapdragon System-in-Package | Qualcomm
[8] I recognize that some aspects of the cellular standards describe network architectures and interfaces. But even if the service providers set up their networks using these architectures and interfaces, what is being sold by the service providers – access and transmission services – is a use, not an implementation of those aspects of the standard.