March 23, 2007
Verizon, Sprint Nextel oppose ban on imports, fear
By Paul M. Krawzak
COPLEY NEWS SERVICE
WASHINGTON – Two wireless service
providers complained to the U.S. International Trade
Commission yesterday that they are caught in the crossfire
of a global war raging between San Diego telecom giant
Qualcomm and Irvine adversary Broadcom.
But both cell service providers weighed in on
Qualcomm's side, asking the commission not to ban the
importation of cell phones that contain Qualcomm chips
found to infringe on a Broadcom patent.
Mark C. Hansen, an attorney for Verizon Wireless, said
Verizon is trapped between the two litigious rivals, who
he said are using patent law to “club” each other.
“They're in a nuclear war in 500 different places in
500 different ways,” he said.
Hansen was referring to the legal battles between the
two Southern California companies – whose headquarters are
scarcely 75 miles apart – before U.S. federal courts and
European antitrust regulators.
In a separate patent-infringement case originally
brought by Qualcomm against Broadcom, a San Diego federal
judge ruled yesterday that Qualcomm withheld key
information from a standards-making body and, thus, waived
its right to enforce two of its video-compression patents.
In the ITC case, a federal administrative judge
determined that some Qualcomm cell phone chips infringe on
a Broadcom patent involving conserving battery power when
phones are taken outside their networks.
Chip-maker Broadcom has asked the ITC, a federal agency
authorized to determine a remedy, to ban the import of
advanced cell phones containing the offending chips.
Broadcom contends that is the only way it can get relief
for the unauthorized use of its technology.
In considering options, the ITC must consider the
impact its decision would have on the public.
A ban would prevent the import of certain cell phones
with technology that allows high-speed Web surfing and the
downloading of music and video.
Representatives of Sprint Nextel, another wireless
service provider, joined Verizon in expressing dismay at
the losses their company would suffer if the commission
bans the phones. They argued to commissioners that a ban
would cost the wireless industry millions or billions of
dollars, raise cell phone prices for consumers and
undermine public safety.
Qualcomm and its supporters testified that the remedy
would be too severe, as it would deprive consumers of
choice in the mobile phone market.
Broadcom executives said that even if the phones are
banned, there will be plenty of comparably priced
alternatives, including “smartphones” and other devices
with typewriterlike keyboards.
Opponents disputed this.
Rosemary Garavaglia, executive director of marketing
for Verizon Wireless, said smartphones and devices such as
Blackberrys cost two to three times more than the cell
phones that would be subject to the ban. And the
alternatives are too complicated for the tastes of most
consumers, she said.
Verizon has invested more than $2 billion in an
advanced wireless network for the potentially banned
phones, and it has expected to recoup much of its
investment from selling them.
Existing owners of the cell phones with the chips would
not be directly affected by a ban.
Corbett Kull, vice president of North American sales
for San Diego-based PacketVideo, told commissioners that
the phones could not be duplicated by other devices. His
company develops software that allows cell phones to play
During the second and last day of the commission's
hearing, wireless providers and manufacturers were joined
by public safety organizations in urging the commission
not to stop the phone imports.
Public safety officials said the ban would deprive
emergency personnel of devices that could transmit
pictures and other data during an emergency and enable
paramedics to reach a heart attack victim more quickly.
The commission has until May 8 to send a proposed
remedy to the Bush administration.