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Technology Stocks : Nextwave Telecom Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (996)	4/25/2008 4:50:27 PM
From: Dexter Lives On	Read Replies (1) \| Respond to of 1088

Thanks Maurice - you make some interesting points. One should take note however that once you make claims on a proposed or existing standard (for example WiFi or WiMAX) that the standards body (in this case IEEE) has adopted FRAND as a guiding principle in their technology selection. So FRAND is not a market mechanism, but it definitely impacts the IPR market from legal, regulatory and business standpoints. I don't however agree with the recent revisionism that says the FRAND rate is "necessarily" a low rate. Only that is it fair and reasonable which of course still allows the market to assess different valuations to different innovations, depending on how much value is added to the final product(s). It does raise the question however, that if a manufacturer can earn 10% gross margin on a product, and assuming they conduct no R&D and license all relevant technologies, what part of that margin should they be willing to give up for the innovations employed? Similarly, what if they spend 3% of revs on R&D? These examples suggest that in fact there may be hard limits on how much is available to pay royalties...?