Tech Policy Summit blog

Qualcomm and Nokia Call Truce In Patent Battle

Wireless communications leaders Qualcomm and Nokia have announced that they're burying the hatchet in their long-standing, trans-Atlantic patent dispute. The companies have signed a 15-year licensing deal that, according to a Qualcomm news release, will "result in settlement of all litigation between the companies, including the withdrawal by Nokia of its complaint to the European Commission."

Specific financial terms remain confidential, but Nokia received a license enabling it to use all of Qualcomm's patents in its mobile devices and infrastructure equipment. In turn, Nokia agreed to allow Qualcomm to use Nokia's technology in its chipsets.

Businessweek columnist Steve Wildstrom, emcee for Tech Policy Summit '08, interviewed Qualcomm CEO Paul Jacobs at the 2008 Summit earlier this year and his opening question for Dr. Jacobs was about the company's patent litigation. You can hear a podcast of that interview in the Media Vault. 

Verizon Wireless Pays $21M To Settle ETF Case

According to the Associated Press, Verizon Wireless has agreed to pay $21 million to settle a California lawsuit brought by a group of customers who were charged early termination fees to cancel their cellphone contracts.

The details are still being worked out, so it's unclear how many Verizon customers will be eligible for a cut of the settlement money. Similar suits are pending in California against Sprint and AT&T.

You might remember that not that long ago we pointed to another AP story about the Verizon Wireless' proposal to the Federal Communications Commission that called for prorating and capping early termination fees and offering mandatory grace periods for customer cancellations.  Several wireless carriers, including Verizon Wireless, have taken steps on their own to implement these types of changes in hopes of avoiding regulatory and legal action.

AP: FCC May Change Terms of Cellphone Contracts

The Associated Press is reporting that the Federal Communications Commission (FCC) is "quietly negotiating" with several wireless phone carriers to reduce early termination fees and to provide consumers with a grace period in which to cancel their cellphone contracts without penalty. You may recall that both of those provisions were included in the Cell Phone Consumer Empowerment Act of 2007 that Senators Amy Klobucher (D-MN) and Jay Rockefeller (D-WV) introduced last Fall.

While fees currently vary by carrier and the two largest cellphone providers AT&T and Verizon Wireless already prorate early termination fees, $175+ penalties to cancel a cellphone contract have outraged some consumers and prompted class-action lawsuits against the cellphone industry in states like California and New York.

According to the AP, an agreement with the FCC "would let cell phone companies off the hook in state courts where they are being sued for billions of dollars...[and]...also would take away the authority of states to regulate the charges."

Verizon Wireless introduced the proposal, which calls for prorating and capping early termination fees, and allowing customers to cancel cellphone service without penalty up to 30 days after contract signing or within 10 days of receiving their first bill. 

Philly's Muni Wi-Fi Network Down for the Count

After months of speculation about the future of Philadelphia's once-enviable plan for a municipal Wi-Fi network, EarthLink has confirmed that it will shut down the city's network on June 12th.

Ars Technica quoted a statement by EarthLink CEO Rolla Huff, who described the situation as follows: "EarthLink has worked diligently for many months to transfer our WiFi network to a new owner--at no cost...Unfortunately, our hope that we could transfer our network to a nonprofit organization that had planned to offer free WiFi throughout Philadelphia will not be realized."

Ars goes on to recount EarthLink's muni Wi-Fi woes, which culminated in Mr. Huff's announcement last November that he was trying to sell off the company's muni Wi-Fi business. According to the Associated Press, the Philly network has less than 6,000 subscribers, out of a projected minimum of 100,000, and EarthLink claims that it has been losing up to $200,000 each month to operate the network.

EarthLink will soon pull the plug on muni Wi-Fi in New Orleans as well, and it's moving forward with plans to turn over control of other networks to cities like Milpitas, Calif. and Corpus Christi, Texas.

The future of public wide-area broadband was the topic of one of the breakout sessions at Tech Policy Summit '08 in March. You can listen to the podcast here.

Clearwire 2.0 Renews WiMAX Push

It's official...Sprint Nextel and Clearwire are joining forces to create a new -- and, they hope, improved -- wireless broadband company under the Clearwire brand.

After a rocky partnership that was put on hold last November with the announcement that the two had ended their agreement to develop a nationwide WiMAX network, Sprint and Clearwire are once again on the WiMAX bandwagon together. And they're not alone.

The "new" Clearwire has help in the form of a $3.2 billion investment from Intel, Comcast, Google, Time Warner Cable and Bright House Networks. According to the Associated Press, the deal is expected to close during the fourth quarter with Clearwire founder Craig McCaw serving as chairman and the chief execs of Sprint, Time Warner Cable and Comcast getting board seats. Clearwire's CEO is Benjamin Wolff and Sprint's CTO Barry West will serve as president (Sprint Nextel will have a 51% equity stake in the company). 

AP reports that Clearwire's targeting 120 million to 140 million U.S. customers by the end of 2010.

UPDATE: Google, which contributed $500 million to the new venture and will partner to offer apps and services to Clearwire customers, has high hopes for its investment. In a post on the company blog this morning, Googler Larry Adler explains: "As we've supported open standards for spectrum and wireless handsets, we're especially excited that Clearwire intends to build and maintain a network that will embrace important openness features."

(Not) Live Blogging from FCC's Stanford Hearing

Live blogging has its merits but isn't our usual Tech Policy Central fare. So, with modest delays, we will be posting updates on today's Federal Communications Commission (FCC) hearing on broadband network management practices. Welcome remarks are underway and the first panel will start soon. Instructions on how to get audio and video of the hearing is available at the FCC's site.

Here are some notes from FCC chairman Kevin Martin's introductory remarks:

--Thanked everyone at Stanford Law School and the Center for Internet and Society for hosting today's hearing and all of the panelists for participating. Pointed out that Silicon Valley represents some of the best of American ingenuity and its entrepreneurial spirit is critical as we're trying to debate network neutrality principles. Wanted to make sure that he's clear before we start today's panels that it is important that we hear from a variety of different folks. The FCC did reach out to the carriers, including Comcast, Time Warner, AT&T and all declined to speak at the Stanford hearing. FCC reached out to Comcast and Pando Networks again after they announced their P2P bill of rights and they declined.  The Commission did try to make this as open and transparent as possible. Several of the carriers suggested individuals to participate today and they are involved in the panels.

Looking Back at the 700 MHz Auction

Hindsight may be 20/20, but that doesn't mean lawmakers and regulators are seeing eye to eye when it comes to assessing the outcome of the 700 MHz auction. In fact, one of the few points that everyone seemed to agree on at yesterday's Congressional oversight hearing was that the public safety D block auction was a disappointment.

Figuring out what to do with the D block spectrum going forward? Not as much agreement.

Rep. Ed Markey (D-MA), chairman of the House Subcommittee on Telecommunications and the Internet, opened the hearing by describing the recently completed auction as "the best of auctions and the worst of auctions simultaneously."

He congratulated the five FCC commissioners, all of whom were present to testify, for the auction's $19.6 billion haul and for the successful sale of the C block (Rep. Markey was among those pushing for the C-block's open access rules). However, like others at the hearing, he was disappointed that there wasn't a buyer for the D block.

Rep. Markey was also critical of the auction's two biggest winners, AT&T and Verizon, saying "the wireless third pipe to compete with the telephone and cable industry is proving either elusive or simply allied with one of the two existing providers in much of the country. This is too cozy and not nearly competitive enough."

For his part, ranking member Rep. Cliff Stearns (R-FL) was less enthusiastic about the total amount raised, citing a study by the Brattle Group that suggested the government could have netted billions more if the auction rules had been structured differently.  Rep. Stearns also made news when he said companies like Google got a 'free ride' because of the open access rules.

As for the question of how to best reauction the D block? A variety of suggestions were proposed, including lowering the reserve price and modifying the build-out requirements, but the issue is far from resolved.

For more info, you can check out write-ups by RCR Wireless News and The Wall Street Journal (sub required), and you can download an archived Webcast at the House's Web site.

Telcos Talk About 700 MHz Auction

With the Federal Communications Commission's (FCC) anti-collusion quiet period over, Verizon held a conference call this morning to tell investors about its plans for the spectrum licenses it purchased during the 700 MHz auction. The company spent $9.36 billion in Auction 73, including $4.74 billion for the coveted C-Block spectrum.

On the call today, Verizon chairman and CEO Ivan Seidenberg described the auction as "a transformative opportunity" for the company, and Verizon Wireless CEO Lowell McAdam outlined ambitious plans to connect everything and anything -- not just people to other people, but also devices to other devices.

According to McAdam, Verizon felt it had a "once in a lifetime opportunity" with the 700 MHz spectrum because it offered a unique set of benefits, including the best overall coverage results and the best penetration of buildings. In particular, it saw the C-Block as a chance to "supercharge" its growth through procurement of nationwide clear spectrum. McAdam also said the company saw the C-Block as critical because they believe it's the first place developers will go in the future.

All in all, Verizon increased its spectrum by about 60 percent as a result of the auction. Going forward, the company will begin network deployment in the second half of 2009 with plans to launch the network commercially in 2010. McAdam also spoke about the company's open development initiative to allow any device and any application to operate on its wireless network and its selection of LTE as the technology standard for 4G networks.

Separately, competitior AT&T explained its decision to spend $6.64 billion on B-Block licenses in the 700 MHz spectrum auction. Ralph de la Vega, president and CEO of AT&T's wireless business said in a statement, "Our winning bids for B-Block spectrum, combined with the C-Block spectrum we acquired from Aloha Partners, significantly enhances AT&T's spectrum portfolio...with fewer costly and complex regulations, we have the certainty and flexibility needed to move faster in rolling out new mobile technology and more customer choices in devices and applications."

Dueling Press Releases

The rift between the National Association of Broadcasters (NAB) and the Wireless Innovation Alliance (WIA) over use of the so-called white spaces was all too apparent yesterday when the organizations issued conflicting accounts of recent FCC prototype testing.

The two groups have been at odds over WIA's desire to deliver wireless broadband via unused portions of television spectrum. NAB has insisted that using the white spaces would interfere with existing services offered by broadcasters, an assertion that WIA has repeatedly refuted.

NAB fired the first shot in this latest battle when it issued a news release stating that a prototype developed by Microsoft had failed FCC testing when the device lost power. The release quoted an NAB exec as saying, "By failing two out of two tests at the FCC, Microsoft and the Wireless Innovation Alliance have demonstrated that unlicensed devices are not ready for prime time."

WIA shot back with its own release that accused the NAB of using "scare tactics" and said, "to be clear, the Microsoft device successfully tested both digital TV signals and wireless microphones." The WIA characterized the power failure as an unrelated issue and stated that it "expects a successful conclusion of the testing process."

You can learn more about the FCC's ongoing testing here.

FCC Commissioner McDowell at Tech Policy Summit; Auction Update

We were just about to announce that Commissioner Robert McDowell of the Federal Communications Commission (FCC) will be participating in the Tech Policy Summit conference this March when we heard the latest news regarding the 700 MHz spectrum auction. So consider this a two-for-one announcement.

A week after the FCC opened its auction, the $4.6 billion reserve price for the coveted C block has been met. Though we'll have to wait and see who wins the national license when all is said and done, the winner will now need to comply with the Commission's open access conditions.

As you may remember, Commissioner McDowell was the sole dissenter when the FCC approved those rules last summer. In a statement he released at the time, he explained his dissent in part as follows: "While we can agree on the destination -- consumers should be able to enjoy device and application portability if they want -- we may respectfully disagree about the best path to get there."

The reserve prices have also been met for other sections of spectrum including the A Block and B Block, leaving the D block that had been set aside for a public safety network as the only license that's lagging well below its reserve price. The FCC has set the reserve price for the D block at $1.3 billion, but the top bid thus far has been $472 million.

In total, The FCC has already received bids worth over $12.7 billion, which puts it well within the $10 billion to $15 billion range the government had been hoping for.

Given the numerous issues before the FCC, and their importance to technology innovation and adoption, we look forward to Commissioner's McDowell's involvement in Tech Policy Summit. Click here to learn more about him and the other speakers joining us March 26-March 28 at the 2008 Summit, and sign up online to be there in person.