Verizon enters licensing deal with Broadcom

Verizon Wireless struck a licensing deal with chipmaker Broadcom, averting a ban on imports that would have threatened the introduction of new phones, an Associated Press report said.

The Associated Press report said Verizon Wireless had previously sided with chipmaker Qualcomm in efforts to overturn a US International Trade Commission ban on imports of high-end phones that contain Qualcomm chips. The ITC found that Qualcomm infringed on a Broadcom patent.

The ban is scheduled to take effect August 6, posing a potentially big headache for carriers and handset makers because it may prevent them from introducing phones ahead of the Christmas buying season.

Verizon Wireless agreed to pay Broadcom $6 for each phone that carries a patent-infringing Qualcomm chip. It will pay a maximum of $40 million a quarter, or $200 million over the lifetime of the agreement, the report said.

Verizon Wireless said it will drop efforts to reverse the ITC ruling and withdraw from a Qualcomm-led request for a federal appeals court to prevent the ban from taking effect, the report said.

Verizon Wireless is breaking ranks with other carriers and handset manufacturers who have urged the Bush administration to overturn the ban.

They argue that consumers and public safety agencies will suffer most, the report said.