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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF
COMS 0.001300.0%Nov 7 11:47 AM EST

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To: David Lawrence who wrote (4700)8/29/1997 11:51:00 AM
From: Jeffery E. Forrest   of 22053
 
56K modem spec suffers
setback

By Tim Greene
Network World, 8/25/97

The 56K bit/sec modem market has been thrown into
a tailspin by an individual's patent claim that raises
questions about who owns key pieces of the dial-up
technology.

Uncertainty surrounding the claim has all but ensured
that plans to finalize a 56K bit/sec modem standard
by January will be derailed, said Ken Krechmer, a
standards committee member who planned to raise
the patent issue Saturday at the ISPCon '97
conference in San Francisco.

Major modem makers contacted last week said they
are now approaching adoption of the standard with
caution until they see how the patent issue plays out.
The standard was scheduled to be formalized - a step
before finalization - at an Inter-national
Telecommunication Union (ITU) meeting in
September.

''This was a very aggressive schedule, and it now is in
jeopardy,'' said Krechmer, technical editor of the
''Communications Standards Review'' newsletter.
''There's not a damn thing the technical committee can
do about it. It's a lawyer problem.''

It now could be 12 months before customers are able
to buy interoperable, standards-based 56K bit/sec
modems for Internet and LAN access.

''It doesn't make sense to roll out a service that's going to change in six
months,'' said Dean Heltemes, remote access service manager for Cargill
Corp. in Minneapolis, which is weighing deployment of 56K bit/sec modem
support for telecommuters.

Currently, there are two incompatible 56K bit/sec mo-dem technologies:
one developed by U.S. Robotics and the other by Rockwell Semiconductor
Systems and Lucent Tech-nologies, Inc.

Man in the middle

The man at the center of the modem controversy is Brent Townshend. Little
is known about him other than he claims to own the basic intellectual
property key to any 56K bit/sec modem. Townshend, who could not be
reached for this story, so far has not declared what he wants in return for
letting others use his intellectual property.

A foreign patent search conducted by one of the modem vendors on the
ITU committee turned up Townshend's claim - a broad patent filing on basic
56K bit/sec pulse code modulation modem technology.

Standards committee members contacted last week said they were not
familiar with Townshend. But they said a committee member had contacted
Townshend and he seemed willing to license his technology.

Getting to know you

While Townshend could declare his intent to license fairly and reasonably in
time for the next standards committee meeting, it may be too late. Whereas
the major modem vendors have working relationships and a certain level of
trust with one another, they do not know Townshend.

''A cautious company would not want to move ahead blindly,'' said Glen
Griffith, director of standards development at Rockwell Semiconductor
Systems. ''They might want to wait for a patent to issue, see what it is, then
design around it. Or they might want to start a dialogue with Mr.
Townshend and make sure he can't hurt them.

The ITU and Telecommunications Industry Association (TIA) have been
cooperating to accelerate the standards process, but the intellectual property
issue stands in the way. Major modem vendors are skittish about the huge
financial impact that licensing fees could have on them.

''If you are talking $1 per modem, then you're talking $100 million in
royalties over two or three years, easily,'' Griffith said.

Les Brown, who is chairman of the TIA's 56K bit/sec modem committee
and works for modem maker Motorola, Inc., said he still hopes an
agreement can be reached next month. But if not, he said the standard likely
will be delayed until September 1998.
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