February 2012

Apple is attempting to stop the use of "standards essential" patents on 3G technology as legal bludgeons against smartphone competitors.

To make its case, the company has gone directly to the standards body behind 3G wireless networking, the European Telecommunications Standards Institute (ETSI). In a letter to ETSI dated last November (but only recently uncovered by the Wall Street Journal) Apple suggested that patents offered as part of wireless networking standards should be governed by standardized royalty rates and barred from being used as the basis for legal injunctions. As the war over smartphone supremacy has spilled over into the courtroom, some players—including Samsung and Motorola—have taken to leveraging patents essential to 3G wireless networking standards in lawsuits largely aimed at Apple. Those patents were offered up to the ETSI to help create 3G standards on the condition that they be licensed on fair, reasonable, and non-discriminatory (FRAND) terms. In the letter to the ETSI, however, Apple's chief IP counsel Bruce Watrous asserted, "it is apparent that our industry suffers from a lack of consistence adherence to FRAND principles in the cellular standards arena." In particular, Samsung has asked for a 2.4 percent royalty on the full retail price of every iPhone or iPad sold to cover its 3G-related patents, while Motorola has asked for 2.25 percent. Apple has apparently rejected these offers as unfair and unreasonable, leading both Samsung and Motorola to sue Apple for infringement. So far, courts in the European Union haven't taken too kindly to using FRAND-encumbered patents to block competitors with injunctions.

AT&T had quite the Super Bowl. At the game AT&T’s networks carried 215 GB of traffic, placed 74,204 phone calls and transmitted 722,296 SMS messages. AT&T reported no problems in handling the traffic and had, in fact, been prepping for game day by adding permanent and temporary capacity. But in what is now becoming a common refrain, AT&T used the event to lobby regulators for more spectrum.

It’s a bit strange for AT&T to use a one-off event as justification for more licenses, since a big annual sporting event is exactly the type of scenario where more spectrum wouldn’t help. Operators scale network capacity to meet average peak demands. If carriers built their networks nationwide to handle Super Bowl-levels of traffic, they would go broke, regardless of whether they had the spectrum to do so. If AT&T had permanently doubled its normal peak capacity in Indianapolis for the game, that bandwidth would have sat their idle for the remaining 364 days.

[Commentary] In the past weeks, Americans have been realizing that the Stop Online Piracy Act (SOPA) might not have been the Great War, but a short battle in hostilities of grander proportions.

This is not the first time copyright policy-making has lacked balance, lost its sense of proportion, or threatened civil liberties. It's just the first time the Internet has won. Two things are missing from the current conversation. First, the recent debate all but ignores the broad arsenal of responses to copyright infringement already available to rights-holders, without SOPA. Second, the public has not been informed on how America's free trade negotiations have been used to circumvent the democratic process, accomplishing much of what SOPA was meant to do. If the United States continues its dalliance with censorship as copyright enforcement, it will be the laughingstock of other countries, which see how disproportionate our enforcement of copyright has been, relative to our protection of other freedoms. As one Chinese man commented, "I've come up with a perfect solution: You can come to China to download all your pirated media, and we'll go to America to discuss politically sensitive subjects."

[Commentary] The Federal Communications Commission has enacted “Roaming” policies over the last two years that have actually cost the American economy much needed network infrastructure investment and the jobs associated with that investment.

At the time, I was commenting on Sprint’s recently announced decision to “roam” at regulated rates in large portions of Kansas and Oklahoma (where it owns spectrum) rather than make the investments necessary to replace its network infrastructure in those areas. Sprint quantified exactly how many billions of dollars that Sprint avoided investing by “trading off” roaming for capital investment and job creation. Sprint executed a business strategy that began four years ago to lower capital investment. In other words, Sprint wanted to stop investing in its own network and ride on the network investments other carriers have made. Sprint changed its regulatory advocacy from opposing the imposition of roaming obligations to supporting roaming obligations.