Motorola & Cell Phone Radiation
Management & Strategy 450 Strategy in Nonmarkets Final Paper
Submitted to: Professor Daniel Diermeier Submitted by: Prem Arumugam Kincaid Coburn William Cornelissen Andrew Shapiro
December 1, 2000
TABLE OF CONTENTS
I. INTRODUCTION...................................................................................................................................... 1 II. HISTORICAL CONTEXT ....................................................................................................................... 1 III. ANALYSIS ............................................................................................................................................. 4 IV. STRATEGY RECOMMENDATIONS................................................................................................... 5 V. CONCLUSION .......................................................................................................................................15 BIBLIOGRAPHY .........................................................................................................................................16 APPENDIX ...................................................................................................................................................22
I. INTRODUCTION
For the past seven years there have been several lawsuits filed by individuals against cellular phone manufacturers, claiming that normal use of the cellular phones causes cancer. Industry competitors and regulators have reacted to this issue. Research has been conducted to determine whether this potential hazard claim is indeed valid. The media has reported extensively on the subject and consumers are becoming increasingly aware. From Motorola‘s perspective, the issue is whether the potential problem of hazardous radiation emissions from mobile phones could affect its cellular phone business. This paper seeks to understand how Motorola, a key player in the cellular phone industry, should react to this issue. It will analyze the actions Motorola has taken to date (November 1, 2000), and provide strategic recommendations that the company can undertake to protect itself. Although there are significant international implications, this paper will focus exclusively on the U.S. market. First, the paper will detail the commonly understood facts and order of events. Second, these facts will be analyzed in order to define the issue and to identify the interests, institutions and information. Third, recommendations for action will be made to best position Motorola in the nonmarket environment with respect to this issue.
II. HISTORICAL CONTEXT
Questions about cell phone safety were first raised in 1993 when a Florida man, David Reynard, filed suit against NEC Corp., a cell phone manufacturer, claiming his wife Suzy‘s fatal brain cancer was caused by her cell phone.1 The lawsuit and subsequent deaths caught the attention of the media and Mr. Reynard soon appeared on CNN‘s Larry King Live. Politicians reacted swiftly to the news: a Democratic representative from Massachusetts, Edward J. Markey, held hearings on the issue. The wireless industry was also quick to respond. Through an industry trade association, the Cellular Telecommunications Industry Association (CTIA), it created an
1
Rosenberg, Eric & Dooren, Jennifer. ―Safety of cell phones under scrutiny by FDA,‖ Hearst News Service, April 2, 2000.
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independent $25 million, six-year research project called ―Wireless Technology Research‖ to be headed up by Dr. George Carlo. Dr. Carlo had previously aided other industries in similar situations. He worked with ―the Chlorine Institute in its efforts to downplay the dangers of dioxin, and he conducted a study for Philip Morris showing how personal biases among scientists could cause them to overestimate the hazards of secondhand smoke.‖2 The Wireless Technology Research project sponsored 50 studies to examine the link between cancer and cell phones. Of the 50, only three showed any signs of a potential link. The first study, conducted by the American Health Foundation, concluded that cell phone users had twice the risk of developing a specific type of brain cancer, specifically neoronal tumors. However, this group initially studied the correlation of cell phone usage and all types of brain cancer and found no link. To complicate matters further, they also observed ―that rates of brain cancer were lower among people who spent more time on a cell phone, rather than higher.‖3 The second, unpublished, study claimed that ―low-level radiation could split DNA molecules in live rats.‖4 Dr. Carlo dismissed this work as amateurish and unprofessional. Additionally, another similar study failed to duplicate the results, an indication that the second study was flawed.5 The third study conducted a battery of tests on human blood cells: results showed some chromosomal damage to human blood cells, laying the groundwork for cancer. However, the program director stressed that the data was ―difficult to interpret‖6 and might be attributable to other factors. Toward the end of the project, Dr. Carlo dramatically switched sides and announced publicly on ABC‘s 20/20 in October 1999 that there were ―red flags‖, indicators that cell phone usage might cause cancer. The issue of cell phones and cancer became a hot topic with the public yet again. Dr. Carlo‘s allegations caught the attention of Peter Angelos, a
Eggert, Bill. ―Cell Phones on the Brain Feds Decide How Much Radiation is Too Much,‖ Daily News (New York), August 27, 2000. Howe, Peter J. ―Airing of Cell-Phone Data is Assailed as Premature,‖ The Boston Globe, May 25, 1999. Harvey, Ian. ―Are We Dialing C For Cancer?‖ The Toronto Sun, July 7, 1999. 5 Schwartz, John. ―Study: Cell Phone Use May Have Cancer Link,‖ The Washington Post, May 22, 1999. 6 Schwartz, John. ―Study: Cell Phone Use May Have Cancer Link,‖ The Washington Post, May 22, 1999.
2 3 4
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Baltimore attorney who had successfully litigated against the tobacco industry and asbestos manufacturers. Mr. Angelos began investigating possible legal action against the cellular phone industry. Additionally, the Food and Drug Administration (FDA) started looking into the matter with earnest. Although it declared that there was no conclusive evidence to indicate that cell phone usage caused brain cancer, it signed a letter of intent with the CTIA (following the ABC broadcast) ―to look into a possible collaborative project to follow up on clues from the earlier program.‖7 In February 2000, the FDA‘s Center for Device and Radiological Health also suggested to the Federal Communications Commission (FCC), the regulatory body that sets benchmarks on emission standards, to review the emissions benchmark. On June 8, 2000, the FDA disclosed that an additional $1 million worth of scientific studies would be conducted with funds obtained from the CTIA. The uproar spread internationally. Epidemiologists in Europe, funded by the World Health Organization along with several cellular companies, launched the largest attempt to link cell phones and cancer. The $6 million study is comparing a control group without cell phones against 3,000 cell phone users, similar to the study conducted by the American Health Foundation.8 It is important to note that groups outside the U.S. will provide information, and represent a potential stimulant of further nonmarket action. In this heated environment, the CTIA announced that all new wireless phones will be accompanied by consumer-friendly information about specific absorption rates (SAR) beginning in December 2000. The outside packaging will state that the phone meets the FCC‘s Guidelines and provide an identifier that can be used to obtain the SAR information from the FCC Website. The FCC guidelines suggest that a wireless phone should emit at most 1.6 watt/kg measured over 1 gram of tissue, a standard recommended by the Institute
7 8
―Leary, Warren E. ―Cell Phones: Questions but No Answers,‖ The New York Times, October 26, 1999. Stroh, Michael. ―Cell Phone Hang-ups; Fears, Doubt About Safety Persist,‖ The Baltimore Sun, June 28, 1999.
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of Electrical and Electronics Engineers (IEEE) and the National Council on Radiation Protection and Measurement (NCRPM) in 1996.
III. ANALYSIS
At issue is how the potential problem of mobile phone emissions will affect Motorola‘s cellular phone business. The main interests are aligned along the following lines: those who, like Motorola, benefit from the sale of cellular phones, and/or create products that produce EMF (electromagnetic fields), and those who believe that EMF represent a health hazard. Interests and institutions likely to be involved are listed below. [Due to space constraints, more comprehensive descriptions of interests and institutions appear in the Appendix.]
INTERESTS Pro Groups
Con Groups
Personal cell phone users (medium) Trial lawyers (high) Consumer safety groups (Cellular Phone Task Force, The Carlo Institute) (medium) Communities which do not want base-station antennas – ―NIMBYs‖ (low) People who use cell phones on the job (low) Fixed line telephony (Level 3, Global Crossing and others) (low)
Motorola and other cellular phone manufacturers, through the CTIA (high) Cellular service providers (high) Stores which sell cellular phones and service exclusively (medium) Stores which sell cellular phones and service (low) Manufacturers of home appliances with similar potential for liabilities (computers, televisions, microwaves, etc.) (medium/high) Companies which issue cellular phones to employees as part of the job function (hospitals, realtors, etc.) (low) Companies which create base-station antennas for cell phones (medium) Content providers for home appliances (low)
High, medium and low refers to the expected likelihood of action and the influence/effectiveness of the interests‘ actions.
INSTITUTIONS U.S. Congress Federal Communications Commission (FCC) Food and Drug Administration (FDA) Environmental Protection Agency (EPA), National Institute for Occupational Safety and Health (NIOSH) National Telecommunications and Information Administration (NTIA). Media as a Secondary institution
Institutions Most Likely to Pursue Nonmarket Action FCC: Responsible for licensing devices, transmitters and facilities that generate electromagnetic fields and microwave radiation. FDA: Primary agency responsible for advising the FCC on cell phone safety. Media U.S. Congress
There is a substantial amount of information on this issue. A number of studies (hospital-based/case-control study and laboratory tests), conducted by manufacturers and
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other private sector entities have been published. However, to date, information regarding the health effects of cell phone radiation is inconclusive. In order to be classified as credible and conclusive, scientific studies must be replicable, held over time, and performed by accredited individuals and institutions. Therefore, the question of a link between cell phones and cancer is not likely to be resolved for some time.
IV. STRATEGY RECOMMENDATIONS
Having identified the parties most likely to take nonmarket action, we will now focus on how Motorola can take nonmarket actions to protect itself as it continues the manufacture and sale of cellular phones. Motorola‘s objectives are three-fold and should be addressed through the CTIA-led coalition: 1. Prevent unfavorable legislation and/or regulation from being introduced. 2. Protect itself from future potential liability litigation. 3. Prevent the media from inciting unproven fears in the public. There are several key strategic avenues Motorola should use to address its risks. Some of these tactics are already in progress and should be continued. It is important to recognize that these actions will need to begin now and take place, conceivably, over the next decade as research and technology developments occur. As the strategy is defensive, most of the benefits from these actions will be realized in the future. That said, Motorola should continue to: Work through the CTIA to accomplish all of its objectives. Build a coalition with other consumer products industries that could be affected by new legislation about or regulation of electromagnetic fields. Mobilize the industries‘ rent chains, as appropriate. Prevent ―unnecessary‖ legislation or regulation from coming to pass by building relationships with regulators and Congressmen. Fund research of cell phone radiation health issues. Look for ways to reduce vulnerability to potential future litigation. Create a reactive communications strategy for use if and when pressed by the media.
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Additionally, Motorola should be sure that its market strategies are consistent with the nonmarket forces at play. All interactions with members of its rent chain (particularly consumers) should be consistent with achieving its objectives in an honest and credible manner. Industry Coalition Building To date, the majority of Motorola‘s nonmarket efforts have been appropriately within the framework of the CTIA coalition. The CTIA has done a good job coordinating interaction with federal agencies as well as providing a clear, consistent voice on the subject of cell phones and health. As the likelihood for regulatory and/or legislative action continues to grow, efforts should be made to broaden the coalition to include other industries. There are a number of products that emit electromagnetic radiation, including medical devices, televisions and microwaves. These products are likely to be affected by nonmarket action, either directly or indirectly. For example, legislation regarding these emissions could set precedents that could apply directly to televisions and computers. The CTIA should especially focus on partnering with industries where there are natural alliances and synergies, such as consumer electronics and home appliances. The CTIA must convince these industries that they face risks similar in nature. All have products that emit electromagnetic radiation, are integrated into consumers‘ daily lives and would be greatly threatened by costly regulation or consumer actions. Several CTIA members already operate in these industries (Samsung, Panasonic, Sony, and others) and would be incented to help build a strong relationship. These industries are already organized; the CTIA could work through an organization such as the EIA (Electronics Industries Alliance) to establish a dialogue and monitor legislation and risks. According to its Website, the EIA represents 80% of the $550 billion U.S. electronics industry ―that
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provides two million jobs for American workers.‖ Its members include companies from the consumer electronics and telecommunications industries, among others.9
Source: Associated Press, July 17, 2000.
A successful relationship would marshal significant resources of time and money as well as access to incredibly extensive rent chains. Although many electronics manufacturers are foreign firms, they still have significant rent chains within the U.S., the largest market for consumer electronics.10 If the CTIA is able to mobilize a broad coalition, it will be very far-reaching and extremely valuable in dealing with the threats of public nonmarket action.11 Mobilizing the Rent Chain The CTIA should also take action to mobilize its own rent chain. Cellular service providers are members of the CTIA. Providers are potentially subject to the same litigation risks and certainly face direct losses of revenue should perceived health issues cause cell phone usage to decline. All of the major phone companies offer cellular service; these companies are large employers and cover the entire U.S. Consequently, these providers can lend great coverage and constituency connections to the CTIA-led coalition. Relations with Regulators and Legislators In order to help prevent unnecessary legislation or regulation, the CTIA must establish credibility with both regulatory agencies and key legislators in the oversight
―Members Info‖, Electronics Industries Alliance Website, November, 2000. ―Trade In Goods: the Electronic Sector‖, European Commission, February, 1999. Moreover, many of these companies‘ rent chains reach into other industries (e.g. entertainment and software) which already have a strong presence in Washington. These other industries might also be inclined to protect the television and computer industries since they depend on their consumer products to provide the content they create.
9 10 11
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committees. Top executives should build relationships with chief regulators and legislators; managers should build relationships with congressional staff members and agency employees. At all levels, CTIA representatives should listen to these parties and understand what their interests and needs are. In this way, the CTIA can aim to provide information and resources that best meet those needs. The coalition must work to advance its objectives within the Food and Drug Administration and specifically, within the FDA‘s Center for Devices and Radiological Health. Objectives related to the FDA are as follows: Demonstrate that the CTIA is a credible partner in investigating issues of mobile phone safety. Illustrate that cellular phones address other health and safety concerns of consumers.
To date, the CTIA has done an excellent job of working with the FDA. In June 2000, the two groups announced that they would collaborate on new scientific studies (funded by $1M from the CTIA) on mobile phones and health.12 The Commissioner of the FDA, Dr. Jane Henney, has a background in oncology. CTIA executives, when building a relationship with her, should be sure to emphasize their ongoing commitment to funding extensive cancer research. The FDA is primarily motivated by safety concerns; accordingly, it may be appropriate for the CTIA to communicate the many ways cell phones are being used to save lives. For example, mobile phones are invaluable to emergency service providers, as well as to victims of domestic abuse. The CTIA also needs to establish a presence in the FDA‘s advisory committees, to ensure its views are represented when necessary. Advisory committees consist of individuals who are recognized as experts in their field, and include medical professionals, scientists and researchers, and industry leaders.13 The Technical Electronic Product
12 13
Cell Phone Safety‖, Lauren Neergaard, Associated Press, ABCNews.com, June 9, 2000. FDA Website, November 2000.
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Radiation Safety Standards Advisory Committee (TEPRSSC) would be the venue where cell phone health discussions would take place, if the issue is raised. The FCC is the other key regulatory institution for the CTIA; the FCC sets the radiation exposure standard and licenses cell phones that meet that standard. It depends on other agencies and on the industry for information to help it determine acceptable safety levels. The CTIA should seek to continue to advance the following goals within the FCC: Safety standards (SAR) should be held constant; if changes do occur, they should be determined with the help of the CTIA. Consumers should be able to access this information only indirectly, by searching the FCC Website using an identifier placed on the package of the mobile phone box (will be implemented by the end of 2000). This helps prevent users from selecting their phone on the basis of low SAR ratings.
The CTIA should become a regular source of credible safety information for the FCC. Additionally, top CTIA executives should build a relationship with the FCC Chairman, William Kennard. During his tenure, Kennard has promoted competition and shied away from regulation. For example, one headline read: ―FCC Chairman Kennard to Cable Industry: ‗Markets can work, but police your own.‘‖14 Executives must show how the industry is effectively self-policing; however, as Kennard‘s term is due to expire in June 2001, the CTIA must be sure to work with all levels of the FCC so the relationship is not lost at that time. The coalition also has an opportunity to become involved in one of the other mandates of the agency —extending telecommunications access to the disadvantaged. The FCC is currently providing incentives to wireless telecommunications carriers to serve tribal lands. Under this program, a winning bidder who commits to use its license(s) to deploy facilities and provide services to federally-recognized tribal lands that are either unserved by any telecommunications carrier or have a telephone service penetration rate equal to or below 70 percent is eligible to receive a tribal land bidding credit.15
14 15
http://www.fcc.gov/Speeches/Kennard/Statements/2000/stwek037.html FCC Website, November 2000.
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The coalition could solicit cellular providers and develop a plan for responding to these opportunities, further building credibility with the agency and demonstrating how it understands and supports the agency‘s concerns. This would also help build a dependent relationship between the FCC and the cellular phone/service industry. It will be crucial to build relationships with key members of Congress as well. Participating in extending services to tribal lands also serves the CTIA when working with congressional representatives from key oversight committees. For example, both Senator John McCain from Arizona (Chairman of the Commerce, Science, and Transportation Committee) and Senator Conrad Burns from Montana (Chairman of the Communications Subcommittee) are extremely interested in ensuring support and services for Native Americans in their home states. Other key players are Rep. Tom Bliley from Virginia, Chairman of the Committee on Commerce, Rep. Billy Tauzin from Louisiana, Chairman of the Subcommittee on Telecommunications, Trade and Consumer Protection, and Rep. Edward Markey from Massachusetts, Ranking Member of the same subcommittee. The CTIA can leverage Motorola‘s relationships with key Reps. Bliley and Markey that were built through legislation regarding the Iridium project.16 These committee chairs will oversee any potential legislation regarding the key issues affecting the cellular phone industry. It is vital that the coalition build/maintain relationships with and meet the needs of these chairmen. The coalition‘s primary objective is preventing unfavorable legislation from coming to pass, or even making a news splash. There are several ways that the coalition should advance its agenda. Campaign contributions to the key players are a given. Contributions in and of themselves, however, are insufficient. Communications with legislators and their staff should provide credible information on the health issues. Third party spokespeople such as scientists should be
16
Reps. Bliley and Markey passed a bill privatizing satellite communications after active lobbying by Motorola.
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used to help build credibility for the coalition‘s position. Open lines of communication should be established at all levels between the Congressmen and their staffs and CTIA representatives. It is important for the CTIA to be aware of developments on the issue as or before they occur. The CTIA should emphasize how members of its coalition are helping meet the needs of constituents. Working with congressional representatives and regulators will serve another purpose. By building strong, interdependent relationships, the CTIA is helping to reduce the incentives for regulators and/or congressmen to seize the issue as a political entrepreneur. Congressmen, eager to take a stance on an issue which could win favor among voters, could decide to take on the issue individually, and push for regulation or political action in general on the issue. Research Initiatives The CTIA must continue to sponsor in-house and independent research to learn more about the risks of electromagnetic radiation from cell phones. There are numerous reasons to support research. Consistent with the corporate visions of the companies involved, there is an ethical obligation to learn about the potential health effects of its products. Hopefully this research will help allay unwarranted fears of consumers. Undertaking studies will communicate the message (now and in the future) that the industry recognizes the potential health concerns of consumers and is taking steps to learn more and address these concerns. Outside research must be set up using independent researchers (selected by a third party) so that the credibility of the effort is not in question. Cell phone manufacturers will have access to information while the research is in progress. By properly keeping abreast of developments as they occur, manufacturers can tailor their strategy accordingly. Should negative health effects be discovered, these results will be released immediately, and the CTIA will avoid suffering the credibility problems of ―Big Tobacco‖. Studies should examine the factors that contribute to exposure (antenna
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placement, etc.). In-house R&D should also address the issue by attempting to create ―radiation blocking‖ devices which could be used with or on cell phones. It is important that the CTIA have a system to monitor, understand and react to developments as they occur. Should studies by other groups be released that purport to link cell phones to cancer, the CTIA will be knowledgeable on the subject and potentially will be able to counter quickly with evidence from independent scientific initiatives. Reduce Litigation Risks Under U.S. law, there appears to be very little that Motorola can do to immunize itself from liability litigation, short of not manufacturing cellular phones that emit radiation. The CTIA would much rather keep the issue in the regulatory and legislative arenas, where it will have more influence than in the judicial system. However, cell phone manufacturers can and should proactively look for ways to reduce their vulnerability, should research eventually establish a positive correlation between cell phones and increased risk of negative health effects. These actions should be coordinated across the industry for several reasons. First, Motorola does not want to differentiate itself on the basis of safety (SAR); it is better served if overall industry profitability is protected and consumers accept all approved cell phones as safe. Additionally, the costs should be shared and pressure should be exerted to prevent free-rider behavior. The CTIA should retain lawyers to consider the potential effects its members‘ actions could have regarding future litigation. It should also attempt to create a positive image and a good track record for the industry should cell phone manufacturers face future litigation. Sponsored research will help communicate that the industry is concerned with safety and is actively looking to protect consumers from potential harm. The CTIA should also take reasonable steps to continue to increase product safety where possible. Although manufacturers can reduce exposure by tweaking handset design, progress in this regard is
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thought to be limited. According to the IEEE, ―significant reductions in power create the need for more closely spaced base stations, which are unpopular with residents in many areas. Moving antennas and other circuit elements farther from the user's head might enlarge the handset, which would work against consumer demands for small phones.‖17 Motorola should use the CTIA to help coordinate another action that could potentially help reduce vulnerability to litigation: packaging complementary products that reduce (or block) EMF exposure together with cell phones. According to IEEE, hands-free devices that move the handset away from the user's body do reduce exposure.18 This action, if taken independently, would increase Motorola‘s costs vis-à-vis its competition. If coordinated through the CTIA, all cell phone manufacturers would incur some costs. Communications & Media Coverage Motorola can expect that media coverage of cell phone safety will only increase. Two main factors determine the extent of probable coverage of this issue, societal significance and audience demand. Societal significance is high, as the matter affects public health and safety. As prices for phones and service fall, the number of cell phone users continues to grow. ―More cell phones will be sold this year than all the computers, TVs, personal digital assistants and pagers combined.‖19 Moreover, cell phones are being used by an increasingly diverse group of people—including children and teenagers. In the U.S., cell phone ownership among teens is expected to rise from 19% in 2000 to 36% in 2001.20 This far-reaching growth in usage is leading to increased audience demand for information as more people are potentially affected. Of particular importance is the recent recommendation by the U.K.‘s Microbiological Research Authority to restrict children‘s use of cell phones.21 Children‘s safety is a hot issue that is likely to be given much
Kenneth R. Foster, John E. Moulder, ―Are Mobile Phones Safe?‖, IEEE Spectrum, August 2000. Kenneth R. Foster, John E. Moulder, ―Are Mobile Phones Safe?‖, IEEE Spectrum, August 2000. John Greenwald, ―Do Cell Phones Need Warnings?‖, Time Magazine, October 9, 2000, pp.66-67. 20 ―Wireless Games: Is the Cellular Industry Out of Its League,‖ Wireless Insider, June 26, 2000. 21 Michael James, ―Cell Phone Risk for Kids?‖, ABCNews.com Website, May 11, 2000.
17 18 19
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attention in the press. Interest groups could organize by free-riding on the networks of existing parental groups. Overall, media coverage is likely to help organize cell phone users and increase the potential for nonmarket action. The media has the role of a secondary institution for this issue because the way it chooses to cover cell phone safety will have ramifications on Motorola. Motorola and the CTIA face the threat that media coverage could escalate the public‘s fears and lead to lost revenue. Coverage is likely to help organize cell phone users and increase the potential for nonmarket action. The CTIA should try to keep the media fact-oriented, as opposed to emotion-oriented, since research does not prove a connection between cell phones and cancer. In order to attempt to manage the media, the CTIA needs a consistent voice to represent these research conclusions. For example, when asked to join discussion panels, the CTIA should refer news journalists to independent, credible researchers who have not found a link between cancer and cell phone use, including the American Cancer Society.22 The CTIA will need to be ready to respond to developments and news stories as they occur. The CTIA should coordinate the media interactions of its members for consistency. Several points are currently important to emphasize: Safety is a top priority. All phones conform to government regulations. There is no connection between cell phones and cancer. Avoid a beauty contest on SAR ratings.
Should the need arise, service providers can communicate directly with customers to provide them with information and the CTIA coalition‘s point of view on developments regarding cell phone health matters. Motorola communicates with its consumers on this issue via its Website. It should encourage all cell phone manufacturers and service providers to do the same. Consumers are likely to turn to these Websites for information on the subject, since the sites are easy,
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branded, reference points. By acknowledging the importance of the issue and providing information in a ―seemingly‖ objective manner, Motorola gains credibility with consumers. Motorola uses its site to discuss the issue, provide a brochure with ―Facts and Answers About Wireless Phones and Your Health‖ and offer links to external sites on the subject. Although there is potential to exert influence on the media via coalition partners (e.g., General Electric makes televisions and owns NBC) this strategy should be avoided. First, ethical concerns about improper influence of the media preclude this strategy. Second, there is a high potential for negative consequences with this strategy. If and when this influence is exposed, the damage to the industry‘s credibility would be enormous.
V. CONCLUSION
The issue that Motorola faces is extremely difficult and complex. Information on the subject is constantly changing; there are a number of regulatory and legislative institutions involved; the media is incented to trumpet the (unproven) risks of cell phones; liability litigation looms should a link be proven. However, we are at a stage in the issue lifecycle where Motorola—through the CTIA—is best able to help control its fate. The recommendations outlined provide a framework through which the company can develop its strategy in a consistent manner. As elements of this dynamic issue shift, Motorola must be ready and able to alter its nonmarket strategy.
22
―Cell Phone-Brain Cancer Link Still Unproven‖, American Cancer Society News Today, May 12, 2000.
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BIBLIOGRAPHY
Periodical Articles Abate, Tom. ―Cell Phones Probed for Double Trouble,‖ The San Francisco Chronicle, October 23, 2000. ―A Finnish Fable,‖ The Economist, October 14, 2000. Alpert, Mark. ―Worrying about Wireless,‖ Scientific American¸ September 2000. Alster, Norm. ―Cell Phones, We Need More Testing,‖ BusinessWeek, August 14, 2000. ―Anax, Distributor of MicroSafe Cell Phone Safety Device, Endorses FDA Health Risk Study, CTIA Radiation Warnings,‖ Cambridge Telecom Report, July 24, 2000. Anderson, Kim Renay. Wireless Industry: Cell Phones are Safe,‖ CMP TechWeb, August 29, 2000. Barnes, Jerry R. ―Cellular Phones: Are They Safe?‖ Professional Safety, December 1999. Bodecker, Karl A., Saviers, Allen B. and Morgan, Fred W. ―Continuing Duty to Warn: Public Policy and Managerial Views,‖ Journal of Public Policy & Marketing, April 1, 1998. ―Brain Damage,‖ Red Herring, October 1, 2000. Bragg, Roy. ―Cell Phones: Boon or Bane?‖ San Antonio Express, August 13, 2000. Branson, Louise. ―US Cell Phone Users Rush to Buy Earphones,‖ The Straits Times, July 29, 2000. Brodie, Ian. ―Cell Phone ‗Cancer‘ Scare Worries Firms,‖ The Times, January 26, 1993. Buckley, Cara. ―Experts Downplay Cell Phone Radiation Ratings,‖ The Miami Herald, October 5, 2000. Carroll, Kelly. ―Cell Phone Debates Reawaken,‖ Telephony, August 7, 2000. ―Caution: Read this At your Own Peril,‖ Business Insurance, January 11, 1999. Cohen, Laurie P. ―Broader Suits Over Cigarettes May Be Possible,‖ The Wall Street Journal, January 8, 1990. ―Consumer Group Says Cell Phone Users Should be Warned of Health Risk,‖ CNA Taiwan, May 12, 1999.
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Cooke, Bob. ―Cell Phone-Cancer Link is Still Unclear,‖ The Detroit News, April 25, 2000. ―Cell Phone Cancer Scare: Are You at Risk?‖ PR Newswire, October 20, 1999. ―Cell Phone Safety is Probed,‖ The Toronto Star, May 2, 2000. ―Cellular Phone Study Sees Link to Cancer,‖ The Gazette, May 22, 1999. ―Do Cell Phones Cause Cancer?‖ CNN: Larry King Live, August 9, 2000. Egbert, Bill. ―Cell Phones on the Brain. Fed Decide How Much Radiation is Too Much,‖ New York Daily News, August 27, 2000. Egbert, Bill. ―New Yorkers Say its Worth the Risk,‖ New York Daily News, August 27, 2000. Faries, Ronda. ―Expectations of Responsibility and Safety,‖ Printed Circuit Design, August 1, 2000. Flynn, Julia; Carey, John and Crockett, Roger. ―More Sound and Fury Over Cell Phones,‖ BusinessWeek, January 26, 1998. Flynn, Mary Kathleen. ―Cell Phone Headsets,‖ CNNfn, August 30, 2000. Foster, Kenneth R. ―Are Mobile Phones Safe?‖ IEEE Spectrum, August 2000. Glenn, William. ―No Proof that Cell Phones Cause Cancer,‖ OH & S Canada, July/August 1999. Grasson, Tom. ―A Universal Warning Label May Solve the Problem,‖ American Machinist, September 1, 2000. Greenwald, John. ―Do Cell Phones Need Warnings?‖ Time, October 9, 2000. Greenwald, John. ―Mixed Message,‖ Time, October 9, 2000. Harrington, Mark. ―Another Venture into Electronics,‖ Newsday, November 1, 2000. Harris, Nicole and Hensley, Scott. ―Cell-Phone Makers Agree to Develop Risk Standard,‖ The Wall Street Journal, August 29, 2000. Harvey, Ian. ―Are We Dialing C for Cancer?‖ The Toronto Sun, July 7, 1999. ―Health Round-Up, Research Suggests Link Between Cancer and Cell Phone Use,‖ Star Tribune, May 22, 1999.
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―How Safe is that Cell Phone in Your Ear?‖ CNN: Burden of Proof, August 7, 2000. Howe, Peter J. ‗Airing of Cell-Phone Data is Assailed as Premature,‖ The Boston Globe, May 25, 1999. Kalb, Claudia and Springen, Karen. ―Health: Is Your Cell Really Safe?‖ NewsWeek, August 7, 2000. Kirkpatrick, David. ―Static? Or Frying Brain Cells,‖ Fortune, July 5, 1999. Kridel, Tim. ―How to Answer When They Ask About Cancer,‖ Wireless Review, July 1, 2000. Kridel, Tim. ―The Truth is Out There?‖ Wireless Review, July 1, 2000. LaFranco, Robert. ―Mobile Telephony: The Sky‘s the Limit,‖ Forbes, February 23, 1998. Lasalandra, Michael. ―Rides and Phones Do a Number on the Brain,‖ The Boston Herald, May 5, 2000. Leary, Warren E. ―Cell Phones: Questions but No Answers,‖ The New York Times, October 26, 1999. Leary, Warren E. ―Risk Still on Hold; Lots of Calls, No Answers on Cell Phone Link to Cancer,‖ The Plain Dealer November 8, 1999. Levenson, Lisa. ―The Cutting Edge; Headsets Gaining a Firm Earhold,‖ Los Angeles Times, May 11, 2000. ―It Takes Queen to Buck Cell Phone Onslaught,‖ The Toronto Star, November 16, 2000. MacGregor, Alison. ―Cell-Phone Warning Needed? Consumer Group Says Users Should Be Informed of Possible Health Risk,‖ The Gazette, March 11, 1999. Maney, Kevin. ―Cell Phones and Cancer: Denial isn‘t‘ Just a River in Egypt,‖ USA Today, July 14, 1999. Mason, Charles. ―Will Health and Safety Issues Put a Crimp on the Wireless Future,‖ America‘s Network, May 1, 1998. McGinty, Meg. ―Cell Phones to Carry Radiation Data,‖ Interactive Week, July 24, 2000. Meyerson, Bruce. ―Top Wireless Group to Require Phones to List Radiation Levels,‖ The Seattle Times, July 20, 2000.
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Miller, Dan. ―When Mobile Goes Global,‖ The Industry Standard/Grok, November 2000. ―Mobile Phone Radiation Warnings Coming in 2001,‖ Mobile Computing, August 28, 2000. Montgomery, C. Barry and Nahrstadt, Bradley C. ―How To Defend Punitive Damages Effectively – And Maybe Successfully,‖ Defense Counsel Journal, July 1, 1999. Moore, David W. ―Half of All Americans Own a Cell Phone,‖ Gallup News Service, April 26, 2000. Mowrey, Mark. ―Full Steam Ahead?‖ The Industry Standard/Grok, November 2000. Neergaard, Lauran. ―With FDA Watching, Cell Phone Industry Will Study Health Risks,‖ The Record, June 9, 2000. Neergaard, Lauran. ―FDA to Study Cell-Phone Safety,‖ Chicago Sun Times, June 9, 2000. ―Nine Million Business People, Fearing Possible Cancer Risk, To Decrease Cell Phone Usage,‖ PR Newswire, November 24, 1999. ―Nokia, Motorola, Ericsson Agree to Develop Risk Standard for Cell Phones,‖ Dow Jones Business News, August 29, 2000. ―No Pat Answers in Cell Pone, Microwave Safety Debate,‖ The Toronto Star, October 21, 1998. Peltz, Perri, ―Nokia Rises to the Top of the World,‖ CNNdotCom, October 14, 2000. ―Private Studies Prod U.S. to Investigate Cell Phone Health Risks,‖ The Arizona Republic, April 1, 2000. Rosenberg, Eric and Dooren, Jennifer Corbett. ―Safety of Cell Phones Under Scrutiny by FDA; ‗Red Flags‘ on Radiation Raise Concern,‖ The Houston Chronicle, April 2, 2000. Rosenberg, Eric and Dooren, Jennifer Corbett. ―FDA to Look For a Link Between Cell Phones, Cancer; Two Studies Raise Questions, but Evidence is Inconclusive,‖ Milwaukee Journal Sentinel, April 2, 2000. ―SafeTShieldTM Protects Consumers from Cell Phone Radiation,‖ PR Newswire, October 16, 2000. Schuch, Beverly. ―Do Cell Phones Cause Cancer?‖ CNNfn, October 30, 2000.
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Schwartz, Ephraim. ―Wireless World: Corporations Are Always Having to Say ‗We‘re Sorry,‘ Even in the Wireless Business,‖ InfoWorld, October 9, 2000. Schwartz, John. ―Study: Cell Phone Use May Have Cancer Link,‖ The Washington Post, May 22, 1999. Schwartz, John. ―Study Hints at Cell Phones, Cancer Link,‖ The Plain Dealer, May 22, 1999. Schwartz, John. ―Tests Link Cell Phones and Cancer, Stir Debate,‖ The Buffalo News, May 22, 1999. Seminerio, Maria. ―Are We Lab Rats for the Cell Phone Industry?‖ eWeek, August 18, 2000. Smith, Ian. ―Cell-Phone Scare,‖ Time, November 1, 1999. Stroh, Michael. ―Cell Phone Hang-Ups; Fears, Doubt about Safety Persist,‖ The Baltimore Sun, June 28, 1999. Studt, Tim. ―Riding the Technology Roller Coaster,‖ Research and Development, September 2000. ―The FCC Requires Cell Phones Have a SAR (Specific Absorption Rate) of Less than 1.6,‖ Gannett News Service, October 3, 2000. ―The Power 25,‖ Fortune Magazine, December 8, 1997. ―Trade In Goods: the Electronic Sector,‖ European Commission, February 1999. Tuohy, John. ―Cancer Caution Issued: Pathologist‘s Warning is At Odds with Government Agency and Angers Industry,‖ USA Today, August 8, 2000. Wen, Patricia. ―Cell Phone Alarm Sounded,‖ The Gazette, October 9, 1999. Wen, Patricia. ―Mixed Signals,‖ The Boston Globe, October 4, 1999. Whelan, Elizabeth M. ―Warning: Cigarette Labels are Hazardous,‖ The Baltimore Evening Sun, October 24, 1994. ―WHO Says More Research Needed on Cell Phone Radiation,‖ Associated Press Newswires, June 28, 2000. ―Wireless Warnings,‖ Data Communications, February 1998. Yaukey, John. ―Consumers Get Data on Cell-Phone Radiation,‖ The Idaho Statesman, October 2, 2000.
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Internet Sites www.fda.gov www.fcc.gov/oet/rfsafety www.who.int/peh-emf www.wow-com.com www.nci.nih.gov www.ieee.org www.motorola.com www.nokia.com www.sprint.com www.att.com
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APPENDIX A - Interests & Institutions
Interests The following interests from the pro groups are likely to take nonmarket action. Motorola and the CTIA will be harmed by any potential legislation or governmental agency action that (a) requires manufacturers to inform consumers about the possible harmful effects of cell phone usage, (b) mandates significant and expensive changes in the design and technology of phones, (c) regulates the purchase and use of cellular phones (for example, legislation affecting sales to children). In addition to government influences, the company and more generally the CTIA are vulnerable to (a) media action surrounding mobile phones and their effect on users‘ health, and (b) potential future litigation resulting from consumer lawsuits. Cellular service providers in their effort to reach economies of scale and higher levels of capacity utilization are aggressively marketing the use of cell phones and the convenience of a universal phone number. Providers are winning-over customers through (a) free cell phone with activation promotions, (b) increased airtime minutes as part of the monthly service packages, (c) ability to access the internet and send emails, and (d) free calls to/from cell phones used in the same household. In the next few years, cellular service providers are expected to broaden their service offerings and play an increasingly important role in the adoption of the wireless Web and wireless PDAs (personal digital assistants) as a communications device23. Any action alerting consumers about the possible harmful effects of EMF will have repercussions on providers‘ business model.
23
Handspring, a manufacturer of PDAs, is expected to ship VisorPhone, a handheld computer and phone in one, by the end of December 2000.
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The upcoming third generation wireless (3G) rollout increases the stakes for cellular service providers. The license auctions scheduled for March 2001 will cost service providers billions of dollars. It is estimated that licensing and infrastructure expenses could cost providers approximately $164 billion24. Such amounts do not include the additional marketing costs associated with product launches and improvements. Given the significant investment, we can expect cellular service providers to play an active role within the pro group. In an effort to guarantee the returns from their anticipated cash outlays, companies such as AT&T and Sprint will align themselves closely with Motorola and the CTIA should nonmarket actions escalate. Stores which sell cellular phones and service exclusively are for the most part owned by service providers and thus face the same threats as the providers themselves. Manufacturers of home appliances with similar potential for liabilities will be alarmed by any sort of action pointing to the potential health hazard of cell phones. Realizing that at some point their products may be targeted as well, on account of similar electromagnetic emissions, manufacturers are incentivized to aligns themselves with the pro group through organizations such as the Institute of Electrical and Electronics Engineers. Companies which create base-station antennas for cell phones have made significant investments in technology and equipment to develop the cellular telecommunications infrastructure. Accordingly, their interests are aligned with those of the cellular service providers. The following interests from the con group are likely to take nonmarket action.
24
Mark Mowrey, ―Full Steam Ahead?‖, The Industry Standard/Grok, November 2000, pp.68-69
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Personal cell phone users and consumer safety groups are likely to take action in the near future if the public‘s present concern is not addressed and scientific studies continue to be inconclusive. Presently, high costs of organization prevent individual consumer action from being influential. However, factors such as the media and political
entrepreneurs can rapidly organize and unite consumers into a strong and effective force. As illustrated by the present levels of penetration (approximately 30% of the population) and the projected explosive growth in usage (penetration will reach approximately 70% of the population in 2005)25, cell phones will soon be owned by the majority of the U.S. population, including children. With the passage of time, as individuals rely to a greater extent on cell phones to meet their communication needs, consumers and interest groups will put pressure on governmental institutions to ascertain whether the product really represents a health hazard. Trial lawyers are financially motivated to organize consumers who believe they have been harmed by cell phone usage. They have already had conferences on the issue to prepare their members for future cases. They may also serve as an organizing agent for affected consumers.
25
Dan Miller, ―When Mobile Goes Global‖, The Industry Standard/Grok, November 2000, pp.97-99.
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