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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 166.06+0.6%1:50 PM EST

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To: Jon Koplik who wrote (14623)9/5/1998 3:14:00 PM
From: SKIP PAUL  Read Replies (2) of 152472
 
Protests Qualcomm licensing stance on
wideband CDMA -- Europe fights back on 3G
mobile comm spec
Peter Clarke

Sophia Antipolis, France - The European Telecommunications
Standards Institute (ETSI), based here, has hit back at the
United States over the future of third-generation mobile
communications standards. In an open letter to Rep. Philip M.
Crane, R-Ill., chairman of the House Ways and Means
subcommittee on trade, ETSI protested moves by Qualcomm
Inc. (San Diego) that threaten to delay or even derail the
development of the European and Japanese versions of the
so-called "3G" specification.

Qualcomm has announced plans to withhold access to its
code-division multiple access (CDMA) technology. What is
not yet clear is how European and Japanese variants of the 3G
radio interface, which uses a version of CDMA technology
labeled wideband CDMA, can progress without reaching some
sort of accommodation with Qualcomm. Qualcomm is seeking
to make an agreement to use the U.S. version of the
technology-known as CDMA2000-a condition of licensing its
intellectual property.

Not invited

The open letter, from Karl Heinz Rosenbrock, ETSI director
general, acknowledged that Qualcomm holds
intellectual-property rights in CDMA. But it concluded that,
despite Qualcomm's intention to deny licenses, "The
development of third-generation standards within ETSI will . . .
progress according to this decision and ETSI's rules of
procedure."

ETSI also protested the fact that while its activities came up
for discussion at a July 28 hearing of the Ways and Means
committee, the organization was not invited to testify.
Rosenbrock addressed charges that ETSI's backing of
standards raises unnecessary barriers to trade between the
United States and Europe, and that for a number of years the
European Union, by mandating the use of GSM technology,
had closed the market to non-European companies.

Rosenbrock pointed out that North American manufacturers
Lucent Technologies, Motorola and Nortel are all members of
ETSI via their European affiliates, and that "for GSM
standards, the major part of the registered essential
intellectual-property rights emanate from U.S. companies."

An ETSI spokesperson said last week the organization was
disappointed that Qualcomm-having become a member-was
now seeking to impose conditions at a very late stage in the
standard-setting process.

Ake Persson, vice president of marketing for Ericsson Mobile
Systems, said Qualcomm first said it would withhold access to
its CDMA patents in the spring. "It's a very unusual action to
take, particularly when they have been within standards bodies
when actions [on standardization] have been taken," he said.
"Now they want to have some different action taken to suit
their purposes."

He added: "The various standards have been submitted to the
International Telecommunications Union for approval under
IMT-2000, which has supported the family-of-standards idea
for a long time. Everyone has accepted that. Nobody expects
anything else. It has to be dealt with. It will be resolved."

Persson said he was confident a solution would be found.
"These intellectual-property-rights issues are very common in
the high-tech industry," he said, adding, "The industry won't let
one company obstruct the whole process."

Tim Harrabin, strategy director at Vodaphone plc (Reading,
England), a provider of mobile-phone services, said: "We find
this [development] very disquieting. Qualcomm would like to
merge CDMAone with the Universal Mobile
Telecommunication Standard. We would welcome this if it
could be done, but this has been looked at in depth already.
We haven't seen any proposals as to how it could be done."

Simon East, vice president of technology at Symbian Ltd.,
which licenses and develops the EPOC32 operating system,
said: "Clearly it would not be good to have the 3G market
killed by a row between Qualcomm and ETSI, but I'm not sure
it will come to that."
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