FEATURE: ITC may ban all EVDO handsets imported to the U.S.

By Brian Dolan, FierceWireless Editor

The Qualcomm-Broadcom patent infringement case has reached a fever pitch, as a government panel mulls whether to ban all import of EVDO handsets into the U.S.

In a rare public hearing at the International Trade Commission (ITC), Broadcom CEO Scott McGregor asked the ITC to ban all 1xEV-DO and W-CDMA handsets imported into the U.S. that include Qualcomm baseband technology. The request is a proposed remedy to an ITC judge's ruling last year that Qualcomm infringed on one of Broadcom's patents.

That patent covers technology that governs power usage within handsets. Qualcomm has embedded that technology in virtually all 1xEV-DO chipsets, according to Broadcom. The ruling from last year included a suggested remedy that banned Qualcomm from importing any of the infringing (standalone) chips into the U.S. Broadcom, however, wants to extend that suggested ban to all 1xEV-DO handsets. Since the ITC's directive is to counter-balance its decision with the interests of the public good, Broadcom's proposed remedy will allow for the importation of 1xEV-DO-enabled PDAs and smartphones (defined as QWERTY keyboard-equipped handsets). 

Broadcom: EVDO will be fine

Broadcom's lead counsel Robert Van Nest said that the injunction "will not harm consumers since consumers will still have a lot of choices, in particular and including 1xEV-DO on laptops, BlackBerrys and the new generation of smart phones made by LG, Motorola and Samsung."

Broadcom witness and former chief economist for the FCC Simon Wilkie said that it "is critical to remember that the majority of users won't be affected since most people only use their phones to talk or text other people--only 10 percent use phones for other services." Wilkie argued that the majority of mobile users who do use 1xEV-DO services do so through data cards for laptops or on PDAs and smartphones. For those rare few that do have handsets and use mobile content services, Wilkie suggests that they switch to AT&T, which is moving toward an HSDPA network and is much better than 1xEV-DO, Wilkie says. Broadcom CEO McGregor added that "there will be a number of presentations from Qualcomm and its supporters that claim 'Judgment Day' is upon the mobile industry if 1xEV-DO is affected, but 1xEV-DO is just another standard in a long line that includes WiMAX, HSDPA and others being finalized as we speak." McGregor added, "No EVDO networks would have to be turned off, no EVDO phones in use currently would stop working, only those phones set for importation to the U.S. would be affected."

Qualcomm: The ban would crush economies of scale

Qualcomm's chairman Irwin Jacobs, however, argued that, "Broadcom's view that the exclusion of 1xEV-DO phones from the U.S. market would not be extensive or disruptive is simply not true: 1xEV-DO handsets are the largest growing category of handsets."

Jacobs also noted that most 1xEV-DO devices do not have QWERTY keyboards. "The largest market for 1xEV-DO phones is the U.S., so the exclusion of non-QWERTY handsets could possibly destroy the market worldwide, because they will lose those economies of scale worldwide." Jacobs added that Broadcom's contention that data users are increasingly trending toward QWERTY keyboard enabled phones is flat-out false: "Just look at the iPhone. It doesn't have any keys," Jacobs quipped.

What Broadcom really wants

McGregor admitted that Broadcom would be thrilled if the ITC decided to ban the importation of all 1xEV-DO chips, whether standalone or in handsets, PDAs, data cards and smartphones. "To be candid, we would like to exclude all of them, all these products. We worked really hard with the ITC staff to find a reasonable remedy that is a compromise, it's not full in Broadcom's interest to do so, but we agreed to allow some of the infringing devices to continue to enter the U.S. and ask for some of the downstream revenue from those that do," McGregor said.

While some might argue the revenue from the allowed PDAs, smartphones and data cards would be worth the compromise alone, it's also important to note that Broadcom must not appear to harm the "public good," which is the deciding factor for imposing an injunction on products that make use of infringed patents.

Will an injunction threaten public safety?

Broadcom, Qualcomm and their respective supporters have spent a great deal of time arguing to what extent an injunction on 1xEV-DO phones into the U.S. will negatively affect the public good, since according to ITC precedent, an injunction hinges on this factor following the positive infringement ruling.

Qualcomm and five public-safety agencies are set to testify today that first responders and other emergency workers will be prevented from communicating with each other. Broadcom's witness, Frances Edwards, a professor at San Jose State University who previously headed up that city's emergency services, said that Qualcomm's public safety witnesses must not understand the injunction. Edwards argues that first responders rely exclusively on radios, not cell phones, because radio allows the information to be widespread, while cell phones are person to person. Secondly, agencies use cell phones but only for non-critical situations since they cannot rely on the commercial systems to be available--it's well known that they become overloaded during times of crisis.

Qualcomm's chairman Jacobs completely disagreed with Broadcom and Edwards.  Public safety agencies do use 1xEV-DO, he said. Jacobs admitted that 1xEV-DO is mostly used for mobile entertainment on the consumer side, which is not really necessary for the public good, however, "we need carriers to be successful commercially for these services to be there to enable public services too," Jacobs said.

Expected resolution

The ITC has set May 8, 2007 as the deadline for making a decision. At that time the White House will have 60 days to approve or disapprove any decision. 

For more coverage on the ITC hearing read the rest of the feature here [1].