WASHINGTON-Frustrated with failing to make progress after months of negotiations with European officials, Qualcomm Inc. last week declared war by formally invoking intellectual property rights to five third-generation wireless standards pending before the International Telecommunication Union.
Qualcomm said its action, taken in an Oct. 12 letter to Geneva-based ITU, could force work to halt on five of 15 3G standards at the ITU until its patent disputes are resolved.
The bold stroke, which coincided with the opening of the month-long ITU Plenipotentiary Conference in Minneapolis, appears designed to give Qualcomm new-found leverage to cut a deal on a converged Code Division Multiple Access standard for 3G that so far has proved elusive.
Qualcomm’s transatlantic salvo comes amid signs Japan apparently is reconsidering its commitment to wideband CDMA, one of the five 3G standards at issue in the Qualcomm letter. Europe strongly supports W-CDMA technology for 3G.
In a related development, the Telecommunications Industry Association petitioned the Federal Communications Commission to earmark spectrum in the 2110-2150 MHz band that personal communications services operators can use for 3G. While Europe has set aside a huge chunk of spectrum for 3G, there is a great division in the U.S. wireless industry about whether 3G should be accommodated in new or existing frequency bands.
“It (the Qualcomm letter) does not stop ongoing work. It would stop setting up a standard,” said Theo Irmer, director of the ITU’s telecommunications standardization bureau. Irmer said Qualcomm and other manufacturers have until Dec. 31 to assert 3G IPR claims.
The ITU is scheduled to make a decision on various 3G proposals, many of which are based on CDMA technology, by next March. But that date is not etched in stone. Early indications are that the ITU will approve a family of standards rather than one converged CDMA standard.
Meantime, the European Parliament plans to vote by year’s end or in early 1999 on a bill to mandate a single 3G standard for all 15 European Union members so long as the standard has approval of the European Telecommunications Standards Institute.
So far, ETSI has endorsed only one 3G standard: wideband CDMA. W-CDMA, backed by Europe’s top mobile phone suppliers and some wireless carriers here and abroad, is based on the Global System for Mobile communications platform.
Qualcomm, backed by Lucent Technologies Inc. and CDMA mobile phone carriers here and abroad, is aggressively lobbying U.S. and European officials for a converged 3G standard.
“Qualcomm believes that all parties can and should work together toward a converged third-generation CDMA standard that treats existing investments fairly,” said Irwin Jacobs, chairman and chief executive officer of San Diego-based Qualcomm.
Lucent and Motorola Inc. declined to comment on Qualcomm-ITU letter.
Sweden’s L.M. Ericsson and Finland’s Nokia Corp., which dominate the worldwide GSM mobile phone market, support wideband W-CDMA for 3G. So do PCS carriers in the United States that operate GSM systems.
GSM suppliers and system operators contend CMDA harmonization will result in a degraded 3G standard and accuse Qualcomm of trying to get a corner on the pocket phone market in the next millennium so it can extract exorbitant licensing fees from equipment manufacturers.
Qualcomm says a converged CDMA standard would not be technically inferior to W-CDMA and that W-CDMA intentionally was designed not to be backward compatible with CDMA mobile systems operating in the United States.
The Clinton administration and the GOP-led Congress have voiced support for competition among multiple wireless standards and warned Europe not to lock out U.S. wireless technologies, but they have stopped short of officially embracing 3G convergence.
U.S. Trade Representative Charlene Barshefsky recently told Sen. Ernest Hollings (D-S.C.), ranking minority member of the Commerce Committee, and Rep. Robert Matsui (D-Calif.), that the United States will exercise its World Trade Organization rights if overseas competitors erect barriers to U.S. wireless technologies.
More recently, Rep. Philip Crane (R-Ill.), a Ways and Means Committee member, entered a floor statement urging colleagues “to insist that the telecommunications markets in Europe and Japan open themselves to American innovation in the same manner that American markets are open to foreign competition.”
Crane promised 3G would remain an important issue in the next Congress and that lawmakers and the U.S. trade representative “will vigorously monitor this important trade issue.”
But the strong rhetoric has not translated into a clear U.S. policy on 3G. That has left warring technology proponents claiming victory in the fiery debate.
Indeed, proponents of CDMA and GSM latched onto remarks by Vice President Gore in his ITU speech last Monday, in which he said, “Experience has shown that competition among multiple standards is the best way to meet users’ diverse need-as long as each individual standard is designed to increase, and not reduce, the potential for interoperability.”
The North American GSM Alliance, comprising U.S. and Canadian GSM carriers, said it agreed with Gore that technological diversity and the resulting competition “leads to innovation, better services and better prices for consumers.”
Jonas Neihardt, a Qualcomm lobbyist, interpreted Gore’s speech much differently.
“We find the vice president’s statement an endorsement of our position, which is competition is always the best outcome so long as the standards are different from one another and fulfill the basic test of any standard, which is to encourage interoperability. W-CDMA fails that test by being incompatible with every wireless system on the face of the earth,” said Neihardt.
While forcing the ITU to resolve the 3G patent and putting all parties on notice as to the seriousness it attaches to the issue, Qualcomm also could provoke a backlash and possibly retaliation with its actions.
Ericsson stated previously it “is not prepared to offer licenses to anyone who does not apply such reciprocity in its licensing commitments and who, by such non-reciprocal action, hinder free choice on equal terms between alternative standards.”
John Giere, vice president of public affairs at Ericsson, downplayed talk of retribution and scoffed at Qualcomm’s claims in the IPR letter.
“Qualcomm does not have any valid IPRs in W-CDMA,” said Giere.
Giere predicted the ITU might decide Qualcomm “doesn’t want to play by the rules” and drop consideration of the cdma2000 standard that Qualcomm and others developed for 3G.
William Plummer, vice president of government affairs for Nokia, had a similar reaction.
“It is remarkably inappropriate for one company to hold the rest of the world hostage to its particular business plan,” said Plummer. “This [patent claim] is one little piece of the 3G puzzle.”
