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To: rkral who wrote (119537)	5/31/2002 6:55:25 AM
From: John Biddle	Read Replies (3) \| Respond to of 152472

after all it was the governments who hyped the spectrum and the greed of the network operators who drove up the price so the solution needs to be addressed by both parties So, now you think Seybold can do no wrong. Am I supposed to bow down to the god of wireless? He's good, I'll give you that, but I am unmoved by this statement, which I believe is wrong. How did European governments hype the spectrum? Did they lie about what they would deliver? Or when they would deliver it? Did they know some secret about the spectrum that proved it to be of low value and keep that info to themselves? No, they did none of these things. Or anything else that would make them even a smidgen guilty of dirty dealing. The Euros sold spectrum that they, and nearly all of the carriers, thought was extremely valuable based on what they thought they knew. The fact that the carriers were spending a lot of money relative to their net worth's and relative to their cash flows was not a secret. The Euro governments were selling a public good and had an obligation to get a good price for it. I believe that the spectrum appears to be grossly overvalued only because of what the carriers have done with it. Nothing. They bet that the W-CDMA product would work, and work in a timely fashion. They were wrong. They will continue to be wrong for at least another year or two. I'm not sympathetic. It couldn't happen to a nicer bunch of fellows.

To: rkral who wrote (119537)	5/31/2002 9:57:17 AM
From: carranza2	Read Replies (1) \| Respond to of 152472

Seybold I think has it correct. If WCDMA in Europe collapses, EDGE will succeed only if the governments refuse to give the operators a break on the spectrum costs. Otherwise, it seems likely that they will plod on with WCDMA. If this assumption is correct, the Q stream of royalties is less certain in the event we see no move on the part of the governments to give the operators a break on 3G spectrum costs. I don't know too much about the payment methods, but I do recall that in Germany the winners had 10 days to pay or lose the spectrum. In Britain, the billions raised by the auctions impacted substantially on the national budget. Since most of the costs were ultimately financed by private lenders--loans or bonds--there will be no concessions to the carriers without some pain to the lenders. They are not without political clout, too, so they will put up a fight if there is some move to bail out the carriers. Since the governments have probably been paid for the spectrum, why would a politician care about the carriers or the lenders who financed them? What political advantage is there to elected officials in bailing out the carriers? None, I should think. Doing so would piss off the electorate and the lenders without any political benefit to any official who promotes the idea. The gratitude of one or two carriers in any given country would probably not be enough to motivate any government official to pursue a policy which is ultimately controversial and without any upside to him. The likelihood of any massive governmental bailouts happening is dim, in my opinion. This may or may not endanger WCDMA's ultimate rollout, but it certainly makes it a little shakier. If EDGE is more of a possibility in Europe, then the question is whether the Europeans are willing to pay for the additional infra expense. While it is hyped as a simple software solution if the newer Nokia basestations are used, there will have to be a lot of them, if I have my technological bearings straight. If the additional EDGE infra expense is unbearable in the face of no bailout, and the carriers face problems that are insurmountable, then there is a glimmer of hope that QCDMA might cross the Atlantic. It would be a good thing to keep ones' eyes fixed on the technological progress made by EDGE and the European political arena as respects bailouts. Both may impact Q's royalty future substantially.