ANSI - American National Standards Institute
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U.S. Chip Manufacturers Say They Won’t Meet June Deadline on Chinese Wireless Standard

New York, Mar 12, 2004

Intel Corporation, a member of the American National Standards Institute (ANSI), has said it will not be able to meet the June 1, 2004, deadline set for China's government-imposed wireless security standard. The world's leading maker of chips said the Chinese Wi-Fi (short-range wireless network) security standard presented substantial technical challenges and has announced it will not be able to produce a part that meets the requirements on time; as a result, in June Intel will stop offering its Wi-Fi chips in China, one of the world’s fastest growing technology markets. No U.S.-based chipmakers have announced plans to have chips available by the deadline.

In May 2003, Chinese officials told foreign makers of computers and microprocessors that the Chinese Wireless LAN Authentication and Privacy Infrastructure (WAPI) encryption scheme must be incorporated into every WLAN device used within China's borders. The scheme is incompatible with the Wired Equivalent Privacy (WEP) or Advanced Encryption Scheme (AES) schemes currently used by industry groups like ANSI member the Institute of Electrical and Electronics Engineers (IEEE) and the Wi-Fi Alliance. The new Chinese standard, named GB15629.11-2003, is similar to the international ISO/IEC 8802.11 Wi-Fi standard, but uses a different security protocol.

Despite an extension of the deadline from December 2003 to June 2004, American technology companies and foreign industry have expressed concern since the announcement came from Beijing last year. China requires that any company wishing to incorporate the scheme must partner with one of 24 Chinese domestic companies that have the WAPI-specific intellectual property. Dissenters call the Chinese plan an unfair trade barrier, as well as a potential threat to intellectual property, if manufacturers are forced to share technology with Chinese companies that might become competitors in the Wi-Fi marketplace.

Secretary of State Colin L Powell, Commerce Secretary Don Evans and U.S. Trade Representative Robert Zoellick issued a letter earlier this month addressed to Chinese Vice Premiers Wu Yi and Zeng Peiyan, urging Beijing to repeal the proposed encryption standard. The letter said the new security standard violates World Trade Organization rules under which governments are not allowed to treat foreign firms differently from domestic companies. China has asked for more time to study the issue, but Washington is ready to file a WTO complaint if Beijing does not take steps to address U.S. concerns, according to a New York Times report.

While Intel and other chipmakers have not ruled out eventual use of the WAPI technology, "We feel the adoption of a unique standard ultimately is costly, inefficient and unnecessary for the marketplace," said Wi-Fi Alliance chairman Dennis Eaton. "Basically, it disrupts the economies of scale that manufacturers of goods based on a single standard can obtain."

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