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Qualcomm Ban Harms Wireless Users

It's not often I agree with policy positions of the Big 4 wireless carriers, but in the case of Broadcom v. Qualcomm, I have to make an exception. The decision by the Bush administration not to overturn the International Trade Commission's ban on imports of certain Qualcomm chips, as a result of the patent-infringement lawsuit brought by Broadcom, may or may not harm the operators. But it definitely hurts U.S. consumers.

Alone among the Big 4, Verizon already has reached a licensing deal with Broadcom to continue using Qualcomm technology. Citing an anonymous source, The Wall Street Journal today reported that AT&T has reached such a deal (subscription required) as well. That leaves Sprint Nextel and T-Mobile; Sprint spokeswoman Leigh Horner said after the Bush non-veto was announced that "We will continue to import into the country the latest handsets."

The problem is that the decision gives the big U.S. carriers, who have not exactly been world-beaters in terms of introducing 3G devices into this country, another excuse to put off doing so. Qualcomm more or less holds a monopoly on chips for CDMA phones, offered by Sprint and Verizon. CDMA is considered superior to the rival networking technology GSM (the primary standard for AT&T and T-Mobile phones) for third-generation data services.

Earlier this year AT&T reached an agreement with Qualcomm to use the latter's MediaFLO technology for mobile TV in new AT&T phones. At the time, Qualcomm CEO Paul Jacobs said that the deal could help bring to a close Qualcomm's long-running licensing dispute with Nokia. That seems a distant possibility now.

There's no question that the ongoing patent disputes are delaying the spread of 3G technology in the United States, an area where we lag far behind both Western Europe and East Asia. Even if the other carriers reach deals with Broadcom, the costs of those licensing agreements will be passed on to consumers. The Bush Administration had wide latitude to adjust the import ban while still upholding Broadcom's patent win -- making the penalty fit the crime, as it were, while dong what's best for wireless customers. It didn't. Now we're still treading water, awaiting some resolution that will benefit the operators, the handset makers, and most important, the users.

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