Falcone’s Hedge Fund Files Suit Against Dish Network Over LightSquared

A battle between two billionaires over LightSquared, the wireless broadband company, has played out for months in bankruptcy court. Now one of the billionaires, Philip A. Falcone, has picked a fight with his adversary in a new arena.

Mr. Falcone’s hedge fund, Harbinger Capital Partners, filed a lawsuit on Tuesday against Dish Network, the satellite television company, and its chairman, Charles W. Ergen, accusing them of violating a federal racketeering law. Harbinger is seeking at least $1.5 billion in damages.

The lawsuit, filed in Federal District Court in Colorado, where Dish is based, contends that Mr. Ergen and Dish carried out a fraudulent scheme to acquire LightSquared’s wireless spectrum at bargain-basement prices. The suit echoes accusations aired last year in bankruptcy court, when Mr. Falcone asserted that Mr. Ergen colluded with a hedge fund to try to wrest control of LightSquared from Harbinger.

Harbinger now contends that Mr. Ergen violated the Racketeering Influenced and Corrupt Organization Act when he bought large amounts of LightSquared’s debt while Dish was preparing a bid for LightSquared’s assets.

The defendants, the lawsuit says, “wrongfully and deceptively created chaos in the bankruptcy proceedings so that Harbinger would lose control of the LightSquared board to which it was contractually entitled.”

A spokesman for Dish, which is based in Englewood, declined to comment.

The legal action is the latest chapter in a bitter fight between the two billionaires, who have traded lawsuits while LightSquared tries to exit bankruptcy.

Harbinger, the majority owner of LightSquared, once sought to build the company into a wireless network to rival Verizon Wireless and AT&T. But LightSquared was forced to file for bankruptcy in 2012 after the Federal Communications Commission prevented it from creating a 4G LTE network.

The battle between Mr. Falcone and Mr. Ergen appeared to be nearing an end under a plan devised in June. That plan would allow LightSquared to exit bankruptcy with the participation of all of its creditors except Mr. Ergen. The court-appointed mediator, Judge Robert D. Drain, said that Mr. Ergen had not “participated in the mediation in good faith.”

In June, Mr. Falcone and four other directors appointed by Harbinger to the LightSquared board voluntarily stepped down.

The latest lawsuit, running 99 pages, is full of harsh language about Mr. Ergen’s tactics. Mr. Ergen, the lawsuit says, “surreptitiously” bought LightSquared debt in an attempt to dominate the bankruptcy proceedings before seeking to “drive down the price” of LightSquared’s assets.

“Abusing the judicial process to corrupt the legal rights of others is part of Ergen’s modus vivendi,” the lawsuit says.

Numericable faces new lawsuits from Bouygues, Iliad

Numericable, Completel and NC Numericable have received a letter from Bouygues Telecom claiming EUR 53 million in damages with respect to a five-year white label contract entered into in May 2009, and extended for an additional five years , for the supply to Bouygues Telecom of double and triple-play broadband services. Bouygues Telecom has accused the Numericable group companies of pre-contractual fraud (provision of erroneous information prior to the contract  signature), breach of contract, and harm to its image. Numericable said it considers Bouygues Telecom’s claims to unfounded and is contesting the allegations and level of damages sought.
Numericable has also received notice of a suit filed by Iliad and its affiliates Free and Free Mobile, seeking to prevent its distribution of the IPO prospectus it registered with French securities regulator AMF on 18 September. The plaintiffs claim that the document includes false and devaluing information about them. Numericable states that the IPO prospectus was prepared in good faith based on the information available at the time, and that the document does not constitute an advertisement comparing itself to competitors. It considers the law suit frivolous and has asked the court to reject it.

Samsung offers to stop patent lawsuits in Europe

Samsung Electronics has offered to stop taking rivals such as Apple to court in Europe over patent disputes in order to end an antitrust investigation, European Union regulators said on Thursday.

The move, which may help defuse a long-running patent war between the world’s biggest mobile operators, comes after the European Commission said that Samsung’s patent lawsuits broke European Union antitrust rules. It may also help Samsung avert a possible fine that could reach $18.3 billion.

Samsung and Apple, the world’s top two smartphone makers by volume and sales, are battling each other in courts in more than 10 countries, as they vie for control of the lucrative mobile market.

“Samsung has offered to abstain from seeking injunctions for mobile SEPs (standard essential patents) for a period of five years against any company that agrees to a particular licensing framework,” the Commission said in a statement.

It said interested parties have a month to comment on Samsung’s proposal.

The Commission, which also charged Google‘s Motorola Mobility with a similar anti-competitive practice in May, said the Samsung case would bring clarity to the mobile telephony industry.

Omaha Company Suing Cell Phone Providers

An Omaha company is suing five cell phone service providers for allegedly using its patent-protected computer technology without permission. Prism Technologies alleges that the companies took advantage of a system that controls which smart phones, tablets and broadband mobile cards can access an Internet service. The lawsuits in U.S. District Court of Nebraska were filed against AT&T, Verizon Wireless, T-Mobile USA, Sprint PCS and U.S. Cellular. The lawsuit says the company secured a patent for its inventions in October 2007. The company is seeking royalty payments with interest, as well as a judge's order for the companies to stop the alleged violation.

Apple targeted by lawsuits over Siri and iPad 4G claims

Apple has found itself at the centre of a string of lawsuits across the world, regarding claims it makes over the performance of the new iPad and the Siri technology in the iPhone 4S. Siri, a voice-activated 'virtual assistant' originally provided as an add-on app for all iPhones before being made into an iPhone 4S exclusive, is the most targeted of Apple's recent technologies as gadget-hungry consumers find the reality of the system a far cry from its advertised capabilities. Apple's advertising shows Siri taking on an artificial intelligence-like persona, responding to natural-language commands and queries - "do I need an umbrella", "schedule an appointment with Ted", - with aplomb. Sadly, the reality appears to be somewhat different. Several lawsuits have cropped up since Siri's release as the key selling point of the iPhone 4S smartphone, with VentureBeat reporting that David Jones is the most recent. In his filing, Jones claims that Apple is responsible for the creation of "deceptive commercials" which "diverge greatly from the actual functionality of the Siri feature as experienced." As a result, Jones - who purchased an iPhone 4S largely on the back of Apple's promises for Siri - is asking for a damage payment, both for himself and all other iPhone 4S owners. The suit comes as a third-party survey claimed that a mere 55 per cent of Siri users were happy with the capabilities of the product, which is officially still a beta service - not that Apple mentions that in its advertising. Siri isn't alone in disappointing Apple's customers, however: the new iPad, which features an impressive retina-class display never before seen on a tablet device, is attracting its own complaints thanks to its use of a US-centric 4G mobile broadband system. Fourth-generation - 4G - mobile networks offer significantly improved speeds for internet access, close to those of wired systems like ADSL. However, the UK currently does not have any wide-scale 4G networks - and when networks are launched, the new iPad will be incompatible thanks to differences in frequencies used by US and UK 4G networks. As a result, Tom's Hardware reports that the Advertising Standards Authority (ASA) is investigating complaints from customers that Apple's claims of a faster internet connection are misleading. At the time of writing, however, it has not launched a formal investigation - and Apple has not indicated it will be offering refunds, as it was recently forced to do in Australia for the same reason.

Ex-Philippine president Arroyo pleads not guilty to graft charges

MANILA: Almost a month after entering a not guilty plea to an electoral sabotage charge, former Philippine president Gloria Macapagal Arroyo again faced the courts, this time with her husband. Both pleaded not guilty to corruption charges. Security was tight at the Sandiganbayan anti-graft court as former president Gloria Macapagal Arroyo and her husband were arraigned on graft charges in connection with a scrapped US$329 million national broadband network deal in 2007. Both the former president and her husband, Jose Miguel Arroyo, entered a not guilty plea over accusations of involvement of overpricing in the cancelled national broadband network contract between the Philippine government and China's ZTE Corporation. Mrs Arroyo was indicted on two counts of graft on allegations that she used the presidency to push for the deal despite her knowledge of irregularities and anomalies in the contract. The trial is set to start on June 4. Raul Lambino, Spokesman for former president Gloria Arroyo, said: "We know that she will be vindicated soon. They do not have any evidence. It is part of the prosecution of the Aquino government against her. But we still believe in the judicial process of this country so we are banking on what our judicial system provides." Mrs Arroyo continues to remain in hospital detention for her earlier case of electoral sabotage. This graft case is just one of a string of plunder and graft cases that has been filed against the former president, as her predecessor, President Benigno Aquino, steps up its anti-corruption drive.

Ashland drops legal fight vs. cell companies

Officials this week dropped lawsuits against two cell companies, leaving AT&T and T-Mobile free to add antennas on three cell towers in town. “It wasn’t going to be a good use of town funds to continue fighting this,” said Randy Gruber, chairman of the Zoning Board of Appeals. The ZBA on Monday voted to abandon litigation against the companies, who want to modify towers on Albert Ray Drive, Tower Road and Cedar Street. Gruber said a law that Congress passed last month changed the board’s mind. The new federal law “made it very clear that the wireless companies can add to existing towers,” Gruber said. The law is an addendum to the federal tax cut extension signed by President Barack Obama on Feb. 22. It amends the Telecommunications Act of 1996, giving cell companies more freedom to modify cell towers without local consent. “It strips away a lot of our potential case against it,” Gruber said. Gruber said neighbors have 20 days to appeal the town’s decision. Negotiations with the cell companies span nearly a year to date. More than 50 residents have objected to new equipment on the towers because of noise, health and safety concerns. The ZBA in October denied the companies permission to add antennas, but the companies appealed. Paul Gustavson, who lives near the Albert Ray Drive tower, is one of the most vocal opponents of new antennas, which Gruber said will provide broadband service. Gustavson said this week that the town “caved” and should have fought harder. He also said he was frustrated the ZBA made the decision to drop litigation in a closed-door session. “Before this vote was taken, the public should have had a chance to hear their discussions leading up to that vote,” he said. Gruber confirmed that the negotiations were conducted in private to protect their litigation strategies. Monday’s vote to drop the lawsuits was public, he said. The Zoning Board of Appeals has invited residents to its April 2 meeting to discuss the decision.

Cisco wants tougher conditions on Microsoft/Skype deal

Cisco Systems Inc’s attempt to convince a European court to impose tougher conditions on Microsoft Corp’s acquisition of Skype signals that technology companies are gearing up to battle for control of what some say is the next big thing: videoconferencing. As the networking giant scrambles to safeguard its market leadership and ownership of a technology that is crossing over from business into the consumer world, rival players like Polycom Inc and Citrix Systems Inc are devising their own user-friendly solutions. All will contend with Microsoft, which analysts say plans to integrate Skype into its products, potentially boosting the allure of its software and a future crop of Windows devices. The teleconferencing market is small, but its growing popularity among consumers and its widening use in mobile phones make this struggle — waged through courts, mergers and regulators — a crucial one. “Video is the new world …, and you will see lots of acquisitions, lots of lawsuits, and those who are behind will use patent litigation,” said Krish Ramakrishnan, chief executive officer of videoconferencing service Blue Jeans Network. Research firm Infonetics forecast that video would be the top trend in telecoms. The global enterprise videoconferencing market will hit $5 billion in 2015 compared with $2.2 billion in 2010. Videoconferencing is on the brink of widespread adoption. New services and software are enabling a high-speed Internet connection and standard desktop computer, smartphone or tablet to provide quality similar to the expensive systems that were once confined to corporate boardrooms. In fact, free chat services such as Apple Inc’s FaceTime, Skype and Google+ are slowly making video a part of everyday life for many users outside of the workplace. But one thing holding back its growth is that the technology is often proprietary. That makes many services incompatible with each other, so callers on Skype cannot hook up with people using Polycom, the No. 2 videoconferencing player, for example. Text messaging did not become ubiquitous — and create dependable revenue streams for operators — in the United States until the middle of the last decade, after mobile providers agreed to work together and allow people to send messages regardless of their carrier. On the surface, that’s Cisco’s main gripe with the Microsoft-Skype deal, which closed in October. Cisco argues that the deal will impede interoperability and that Microsoft will be able to lock in businesses that want to reach Skype’s 700 million account holders if it integrates the acquired technology exclusively into its Lync Communications Platform. Cisco Chief Executive Officer John Chambers said that when the company acquired Norway’s Tandberg in 2009, the EU approved the deal under the condition it stick to open standards. Now it wants to ensure Microsoft does the same. A FIG LEAF Most analysts and industry experts say Cisco fears it could lose its dominant position if Microsoft does a good job of absorbing Skype, which already allows a combination of business and consumer usage. Many companies, including computer consultancy Capgemini, already use Skype as an unofficial video tool, and millions of consumers worldwide take advantage of it. But industry observers also argue that given Microsoft’s less-than-stellar track record on innovation, Cisco can afford to sit back and relax. “I am surprised they are still pursuing regulatory relief and using interoperability as a fig leaf for it,” Ovum analyst Ian Jacobs said. “Cisco needs to let Microsoft do what it does best and stifle innovation of its own products.” Ex-Microsoft President Dick Brass once described how the company had developed a tablet PC as early as 2001, but it was doomed because of internal opposition. “Buying Skype was one of Microsoft’s most brilliant moves in a long time,” said Joseph Coyle, Capgemini’s North American head of technology. “They’ll pose a big challenge to Cisco unless they stumble.” Microsoft Chief Financial Officer Peter Klein said at the Goldman Sachs technology conference earlier this month that the company’s Lync platform appealed to enterprise, or business, customers, but can’t be used with someone outside a company’s firewall or with an incompatible system. Enter Skype. Klein said the company had been looking at ways to extend Skype through all of its offerings, from Lync to its Xbox videogame console. Whether Microsoft will prevail remains to be seen, but if industry experts are correct, videoconferencing companies will make more moves to elbow competitors out of the way. “Everyone is trying to create an island…and this (Cisco appeal) is more about slowing down the inevitable,” Ramakrishnan said, adding it was only a matter of time until the intersection between enterprise and consumer video forced vendors to work together. Microsoft itself recently filed a complaint with the European Commission against Motorola Mobility, which it said was trying to block its products that play video and connect wirelessly by charging too much for patents. Ovum’s Jacobs predicted more legal wrangles. “If the slow-moving service providers and technology companies cannot keep up with where the world will be in a year,” Jacobs said, “they will try to hold the world back so it will be where they are in a year.” But such “legal wrangling” will leave room for smaller companies offering videoconferencing for businesses, he added. Jacobs said he also expected some acquisitions as rivals jostle to fill niche areas in their video portfolios. MOVE OVER, WEBEX Cisco has a vested interest in keeping rivals at bay. Its Tandberg purchase, which filled a crucial gap between its high-end TelePresence conferencing products and WebEx desktop video service, made the company the dominant player in the market. And it has the added benefit that video requires ample bandwidth as well as advanced network equipment, resulting in sales of routers and switches — the keys to managing Internet traffic and also Cisco’s bread and butter business. Now, Cisco is keen to find new networking functions and is betting heavily on video, which CEO Chambers predicted “will not only be the leading way we communicate, it’ll be the primary form of IT.” However, Cisco likes to be the one-stop shop for all of its customers’ needs, and it repeatedly touts the benefits of a single vendor strategy. It remains to be seen how Cisco will grapple with the new technologies and slew of rivals gearing up to take their slice of the video communications pie. It is still strong in the enterprise segment, but times are changing, analysts say. “We’ve been long-time WebEx users,” said Donald Tom, associate vice president of IT services at TCS Education System. But he noted that its three affiliated colleges and graduate schools recently switched to Citrix’s GoToMeeting HD Faces for video communications among their more than 5,000 students. “We found it easy to use,” he said. “The video is rock-solid. It really can change how we teach and learn.” Capgemini’s Coyle said the company had once had a lot of Cisco gear. “But we’re backing off,” he said. “Their biggest challenge will be around price point.” COEXISTENCE Bernardo de Albergaria, who heads Citrix’s online collaboration business, said users were looking for simpler solutions because the high cost of infrastructure and maintaining it. “Bring a laptop and a webcam, and you’re set,” he said. “Why do I need to buy a very complex solution now that there’s easy-to-use other stuff?” Others like Polycom choose to make their technology compatible with those of their competitors. Jim Kruger, Polycom’s senior vice president of solution marketing, described Cisco as “one vendor trying to do all, rip and replace everything and then take Cisco.” But like Cisco, Polycom is under pressure from companies such as Citrix and Vidyo, whose videoconferencing systems run on virtual servers, making dedicated gear and services unnecessary. In addition, young people moving into the workplace expect to bring their own mobile devices and have them work smoothly, with instant video and data access. “It is simply a matter of what the coexistence of multiple systems will look like, and who will dictate the terms of that coexistence,” Ovum’s Jacobs said. Cisco will fight hard to make sure it dictates those terms. “They have added a lot of management muscle (to video),” Mizuho Securities analyst Joanna Makris said. “They definitely do not want to lose this case.” Forum Debate Cisco wants tougher c

Goldman, Stanford, Insider Trading, Facebook, BNY, JPMorgan in Court News

A former Goldman Sachs Group Inc. (GS) computer programmer was freed after his conviction for stealing the bank’s high-speed trading code was reversed by a U.S. appeals court.
Wearing a gray sweatsuit, white tennis shoes and a huge grin, Sergey Aleynikov, 42, left the Manhattan courthouse where he had been convicted in December 2010 and entered a waiting car with his lawyer, Kevin Marino.
“Justice occasionally works,” Aleynikov told reporters as he left. “This was such big news to me I haven’t had any time to think about what would happen.”
Aleynikov, a naturalized U.S. citizen born in Russia, said he hoped to be with his three daughters, ages 8, 6 and 3. Until Feb. 17, he had been serving an eight-year sentence at the federal prison in Fort Dix, New Jersey.
After hearing oral arguments from both prosecutors and Marino on Feb. 16, the U.S. Court of Appeals in Manhattan issued a one-page order vacating Aleynikov’s convictions for economic espionage and the interstate transportation of stolen property. The appeals court said it would issue an opinion explaining the ruling later.
The appeals court also issued a mandate that would have foreclosed any further challenge to its decision. The office of Manhattan U.S. Attorney Preet Bharara persuaded the court to set aside the mandate so it can argue for a rehearing of the appeal, either before a three-judge panel or all the court’s available judges. Ellen Davis, a spokeswoman for Bharara’s office, declined to comment on the ruling.
U.S. District Judge Denise Cote, who presided over the trial, ordered Aleynikov released from prison Feb. 17.
Aleynikov was convicted by a jury of violating the Economic Espionage Act and the Interstate Transportation of Stolen Property Act. He was sentenced last March.
On his last day of work at New York-based Goldman Sachs in June 2009, Aleynikov uploaded hundreds of thousands of lines of source code from the firm’s high-frequency trading system, prosecutors said.
He circumvented Goldman Sachs’s security, sent the code to a server in Germany, compressed and encrypted it, and took it with him to a meeting with new employers in Chicago, the U.S. said. Prosecutors argued Aleynikov wanted it as a “cheat sheet” to start a trading system at his new job.
During oral arguments on Feb. 16, the three-judge appeals panel criticized the government’s application of the espionage act to Aleynikov’s actions, asking the prosecutor how the crime occurred and how it affected commerce.
The judges -- Dennis Jacobs, 67, Guido Calabresi, 79, and Rosemary Pooler, 73 -- also asked if taking Goldman Sachs’s trading code was comparable to taking copyrighted material or bringing an employee manual to a new job.

Apple goes after Motorola and Google with legal guns blazing

One measure of how quickly events are unfolding in the smartphone patent wars is the number of typos appearing in Florian Mueller's FOSS Patents dispatches. The German-born blogger's coverage of the "thermonuclear war" Steve Jobs promised to unleash against Google's (GOOG) Android operating system are closely read by all sides in the cross-continental disputes, and lately he's hardly had time to breathe, never mind spellcheck. "There's just too much going on these days," he wrote in the second of two long reports filed Saturday, "and contrary to popular misbelief (which I've seen on Twitter), I do sleep." As Mueller sees it, the subject of his two latest reports, a pair of federal lawsuits filed by Apple (AAPL) in two California district courts, are signal events that could turn the tide in Cupertino's favor. Galaxy Nexus In the Northern District: In the first suit, Apple is asking for a preliminary injunction against the Galaxy Nexus -- the official "Ice Cream Sandwich" lead device developed by Samsung in close cooperation with Google -- based of four court-tested "high-powered" patents that Mueller dubs the Four Horsemen of the Apocalypse. Google's decision to keep using one of them -- the so-called "data detector" patent -- in the latest version of Android, even after the U.S. International Trade Commission ruled that an HTC Android phone had infringed it is, in Mueller's words, "unfair vis-à-vis HTC..., snubs Apple, and shows disregard for intellectual property in general and the ITC in particular. This is a case of willful, extremely reckless infringement." In the Southern District: Here Apple is trying to shut down Motorola Mobility's (MMI) legal strategy -- endorsed implicitly and "irrevocably" last week by Google, which is about to purchase MMI -- of blocking sales of iPhones in Germany on the grounds that they infringe industry-standard broadband patents that Motorola pledged years ago to license to all comers on so-called FRAND (fair, reasonable and non-discriminatory) terms. Motorola licensed the patents to chipmaker Qualcomm (QCOM) and that license would normally extend, by the principle of "patent exhaustion," to a company like Apple that buys Qualcomm chips. But in an exchange of letters revealed in Apple's suit, Motorola asked Qualcomm "to terminate any and all license and covenant rights with respect to Apple, effective February 10, 2011." Mueller writes that "even though Qualcomm may benefit from weak patent exhaustion defenses in other situations because it is a major patent holder who could do a lot of 'double-dipping', it appears that it supports Apple, and I don't think that's just because Apple is a customer. I think it's most likely because MMI's discriminatory termination relating to only Apple is, quite probably, unjustifiable and ineffectual." "If it's true that patent exhaustion is a valid defense in Apple's favor," Mueller concludes, "Google-MMI is playing with fire here." Apple was forced to temporarily remove the iPhone 3G and 4 from its German online store based on Motorola's FRAND complaint, and now sales of the iPhone 4S could be at risk. The company is seeking damages that could run to many billions of dollars.

New Vonage Mobile apps offer free smartphone to smartphone calling

Vonage has released new mobile apps for iOS and Android offering free voice and texting throughout the world. In 2010 Vonage expanded into Skype territory with a Facebook app to offer free calling to other Facebook users. Their new Vonage Mobile apps take this a step further by combining free app to app calling on iOS and Android with prepaid calls to other phones. Voice calls and texts between Vonage Mobile clients are free, potentially allowing people who have dropped home phone service to save on wireless minutes. Calls made through mobile data connections will still count against your data plan. Of course you can avoid that when your phone is connected to a Wi-Fi network. Vonage Mobile works with your phone's existing address book. It will show you which contacts have Vonage Mobile accounts, and there's a SMS powered Invite feature (see the video below). To call a phone directly, instead of from app to app, you will need to buy credits. When you select a contact it will show you the per minute rate before you make a call.

Louisiana city blazes high-speed Web trail

In this tradition-rich city known for its crawfish etouffee and Zydeco stomps, high-speed Internet rules. Web videos upload in a few quick seconds. Surgeons review online pathology reports from their living rooms. University students share bulky research files with one another electronically at lightning speeds. More than 800 miles of fiber-optic cable hum invisibly underground in Lafayette, a city of 120,000, delivering Internet speeds of up to 100 megabytes per second — rare for even major cities. The cutting-edge connectivity in the heart of Cajun country is due not to a private telecom giant but to a public municipal service that offers higher speeds and often lower rates than the private sector. It hasn’t come without a fight. From the time the cyber network was just a far-fetched concept, the city’s two main private providers, Cox Communications and BellSouth (now AT&T), have fought the initiative every step of the way — from an information campaign against the project to civil lawsuits. LUS Fiber, a subsidiary of Lafayette Utilities System, the city-owned power company, offers the speedy Internet service along with cable television and phone service. The Louisiana Supreme Court ruled in favor of the city in 2007, allowing the project to proceed. “We expected some opposition. But no one has had the level of push-back we got here in Louisiana,” LUS Fiber director Terry Huval says. Telecom companies “want to nip it in the bud to keep other municipalities from doing the same thing.” The battle over broadband in Lafayette is part of a growing number of clashes across the USA that pit municipalities against telecom firms for the right to deliver Web access to homes and businesses. More than 150 local governments across the country have built or are planning to build cyber networks, says Christopher Mitchell of the Minneapolis-based Institute for Local Self-Reliance, a non-profit group that advocates community development and local access to technology. Mitchell says those efforts often draw opposition in the form of misinformation campaigns, lawsuits from private providers or unfavorable state laws resulting from telecom lobbying. Nineteen states either ban cities and counties from getting into the broadband business — or make it difficult. As the Obama administration advocates greater broadband connectivity across the USA, communities vying to build the networks are being fought by state legislators backed by telecom companies or the companies themselves. At the core of the debate is whether local governments should be getting into the costly and at times risky business of providing Internet service and whether public financing and other options give cities an unfair advantage over private companies. Telecom companies often pay “franchise fees” to cities for the right to sell cable TV programming, a tool the cities can leverage against companies, telecom officials say. “Our initial objection was, and remains, that it is an unfair advantage for your competitor to also be your regulator,” says Todd Smith, a Cox spokesman. “Many states prohibit government from competing with the private sector.” Falling behind Once a broadband leader, the USA has slipped to 15th in a poll by the Organization for Economic Cooperation and Development that ranks countries according to the percentage of households and businesses using broadband, falling behind Finland, France, Canada and other countries. The USA’s “duopoly problem” — 96% of households have access to two or fewer broadband service providers — has contributed to the slide in ranking, according to the Federal Communications Commission. In its National Broadband Plan, the FCC urges Congress to clarify federal rules allowing state and local governments to provide broadband service. Local governments are increasingly trying to bring broadband service to rural stretches where private providers don’t operate but they are met with stiff resistance from the companies, Mitchell says. “These companies fundamentally aren’t built for acting in a competitive environment,” he says. “They’re built as monopolies. They don’t know how to operate any other way.” Cases where private providers have opposed community broadband projects: •Telecom lobbyists spent more than $350,000 last year on TV and newspaper advertising and other strategies to try to defeat a referendum in Longmont, Colo., that would allow the Boulder suburb to provide Internet service to businesses and residents, says Vince Jordan, a software entrepreneur who led efforts to pass the vote. The referendum passed with 60% of the vote. •Monticello, Minn., officials fought off several legal challenges by Bridgewater Telephone and TDS Telecom when the city announced it was bringing Internet service to residents. In 2009, the Minnesota Supreme Court threw out the cases, allowing the project to continue, Monticello City Administrator Jeff O’Neill says. •After heavy lobbying from Time Warner Cable and other companies, North Carolina lawmakers passed a law last year making it harder for communities to build their own broadband networks, says Democratic state Rep. Bill Faison, who opposed the bill. “It should have been named the ‘Time Warner Cable monopoly bill,’ ” he says. South Carolina and Georgia are considering similar bills. “Pick a battlefield,” says Craig Settles, a California-based broadband analyst and consultant. Telecom companies “will figure out a way to kill as many of these projects as they can.” Telecom industry supporters say cities shouldn’t risk millions in taxpayer dollars in an industry already saturated with private sector investment. Cable TV companies, which supply the majority of Internet service to residents in the USA, have invested more than $185 billion since 1996 to upgrade their networks and equipment — a level local communities can’t compete with, says Brian Dietz of the Washington-based National Cable & Telecommunications Association. “The evidence shows many municipal broadband projects haven’t succeeded, and taxpayers are on the hook for those failures,” Dietz says. “It hasn’t been a success story by any stretch.” A lure to new business Lafayette headed toward cyber connectivity more than a decade ago, when it laid 65 miles of fiber optics to bring better Internet connection to its city-owned power company, Huval says. Businessmen approached the city about expanding the network throughout Lafayette as a way of drawing businesses, he says. City leaders asked BellSouth and Cox representatives to partner on the project – but they declined, Lafayette Parish President Joey Durel says. So city leaders decided to do it themselves “They needed a much quicker return on their investment for their stockholders,” Durel says. “That wasn’t our mission. Our mission was to serve our community.” In 2005, voters passed a referendum with 62% of the vote to invest $125 million in city funds to bring fiber-optic connections to every home and business, Huval says. BellSouth and some residents filed lawsuits against the city, claiming it had an unfair advantage over private companies because it had access to city funds. The challenge reached the state Supreme Court, which ruled in 2007 in favor of the city, Huval says. Today, Lafayette’s system is drawing attention from the tech world. California-based visual effects house Pixel Magic opened a studio in Lafayette two years ago, partly based on the Internet connectivity, and more tech companies continue moving in, Huval says. “We’ve built the infrastructure of the future,” he says. Scott Eric Olivier moved his tech startup firm, Skyscraper Holding, from Los Angeles to Lafayette when he heard of the speeds and service offered by LUS Fiber. The same connectivity of 100 megabytes per second, which allows him to move large files across the Web for clients, would cost him several thousand dollars a month on the West Coast, he says. In Lafayette, he pays $200 a month. Another plus: He’s getting what he paid for — exactly 100 megabytes per second — while his previous provider rarely delivered the promised speeds, Olivier says. “The fact that these guys were able to build this and go to war with the larger telecommunication companies is very impressive,” says Olivier, a Lafayette native. “Their advertised speed is actually what you get. I don’t know any other provider in the United States that can do that.” For Stephen Abshire, founding partner of the Gastroenterology Clinic of Acadiana, the city’s fiber upgrade allowed him and his partners to finally make the switch to a fully electronic clinic. Health records, billing, pathology reports and endoscopy readouts are all reviewed digitally, he says. The high speeds and secure connections between his home and office allow him to review patient records at home and have online conferences between doctors and nurses in different parts of the city — feats impossible without the fiber-optic network. “Everything is paperless at this point,” Abshire says. “The only paper we have are consent forms.” Lafayette businessman Tim Supple is among those who haven’t embraced the network. He opposed the initiative from its inception, arguing that the city is creating an unfair advantage by financing the venture through favorable, long-term bonds and could some day hike utility rates to pay for the fiber connections. He subscribes to LUS Fiber and says the service is much quicker than commercial alternatives but says government should stay out of the retail Internet market. “Who will come and compete with the city? Who will come here with the ‘next best plan’?” asks Supple, who owns a software company. “At the end of the day, it’s going to destroy the market, not create it.” LUS Fiber has captured nearly one-third of the city’s 45,000 residential and business subscribers, and more are steadily joining each month, Huval says. To compete, Cox has slashed its rates for some residents and business customers, lowering TV and Internet bills across the city, he says. Questions linger as to whether LUS Fiber can be a solvent business and pay for its expensive day-to-day costs. Huval says the draw of new companies to the city and the connectivity of schools, libraries and every home in the city already make the venture more valuable than its price tag. “It’s given Lafayette a true edge,” Huval says. “Other communities around the country 20 years from now will want what Lafayette has today.”

Appeals Court Backs FCC Decision To Speed Local Tower-Siting Approvals

A federal appeals court has upheld a decision limiting the time it should take state and local governments to consider cell tower-siting applications (City of Arlington, Texas and City of San Antonio, Texas v. Federal Communications Commission, 5th Cir., 10-60039,1/23/2012). The opinion handed down Jan. 23 by the U.S. Court of Appeals for the Fifth Circuit leaves in place a ruling by the Federal Communications Commission in November 2009 [48 CR 1271] in which the agency declared that a “reasonable period of time” for state and local governments to act on applications for co-located sitings is 90 days, and for all other applications is 150 days. Under the FCC's ruling, if local officials fail to either approve or deny an application within the 90- to 150-day time periods, a wireless carrier may file a claim for relief in court within 30 days. The court will then decide what action to take based on all the facts of the case. The Texas cities of Arlington and San Antonio disagreed and filed lawsuits challenging the ruling on several grounds, but the court sided with the FCC. “We do not read the [FCC's] declaratory ruling as creating a scheme in which a state or local government's failure to meet the FCC's time frames constitutes a per violation of the [Communications Act],” Circuit Judge Priscilla Owen wrote for the three-judge panel. “The time frames are not hard and fast rules but instead exist to guide courts in their consideration of cases challenging state or local government inaction.” By blocking, or delaying the approval of, tower-siting applications, local authorities have given voice to concerns that proximity to a monopole or antenna may be not just aesthetically unpleasing but also harmful to one's health and property values. Industry Sees Inactivity. But the wireless industry says that the problem is inactivity. In many cases, the application process stretches over months, sometimes years, for a single cell tower. In July 2008, CTIA-the Wireless Association filed a petition with the FCC, asking the agency to interpret “ambiguous” provisions of Section 332(c)(7) of the Communications Act to ensure that efforts to deploy wireless networks are not undermined by state and local zoning authorities. That was one aim of the FCC's ruling, and Chairman Julius Genachowski suggested as much in an e-mailed statement Jan. 23. “The FCC's tower siting policy upheld today advances the crucial national priority of ensuring American leadership in mobile innovation and is part of the FCC's relentless focus on unleashing the opportunities of wired and wireless broadband for all Americans, including job creation, increased investment, innovation and economic growth,” said Genachowski. The Fifth Circuit's decision will have an impact on issues of important to local jurisdictions. While siding with the FCC, the court said Section 332(c)(7)(A) of Communications Act states Congress's desire to make section 332(c)(7)(B)'s limitations “the only limitations confronting state and local governments in the exercise of their zoning authority over the placement of wireless services facilities,”and thus certainly prohibits the FCC from imposing restrictions or limitations that cannot be tied to the language of the Act. However, whether the FCC retains the power of implementing those limitations, however, remains “unresolved,” the court said.

Why ‘Ireland’s SOPA’ could be a good thing

Two days after hacktivist collective Anonymous distributed denial of service attack took the websites of the departments of Justice and Finance offline under the banner of OpIreland we now know exactly what they were protesting: two subsections of text on the topic of ‘harmonising' one element of Irish with EU law. Afforded a scant 15 minutes debate in a Dail chamber attended by a handful of deputies, you could be forgiven for thinking Junior Minister for Research and Innovation Sean Sherlock's (pictured) draft statutory instrument (SI) just another matter of process, not a landmark copyright war between the recording industry and Internet service providers. The debate, a mere exercise in optics, served two purposes: to show Minister Sherlock is in full possession of the facts of his brief and to dispel any doubts as to whether the SI (full text at http://bit.ly/xOnxOY) will be implemented. At time of writing it has just been announced that a full debate will indeed take place but let there be no confusion, the SI will pass and by the end of the month rights holders will be able to apply to the High Court to secure injunctions against copyright infringers, and those who enable them. After two years of gridlock, bodies like IRMA will have the right to demand Internet service providers (ISPs) block access to websites they believe are illegally distributing their work. The response has been predictable: outrage from the digerati reflected in a petition signed by almost 60,000 netizens, satisfaction from the recording industry, and indifference by everyone else. Having ignited the debate, Anonymous moved on to railing against the much bigger and scarier Anti-Counterfeiting Trade Agreement (ACTA) being signed by the US, EU, Japan, South Korea, Canada and Australia. So has Government saved the state some money by dodging a fine for not complying with EU law at the expense of the Internet? Based on Minister Sherlock's wording (full text here) we can glean that Ireland is not on the verge of enacting its own version The US's defunct Stop Online Piracy Act and Protect IP Act - both cast aside in the face of massive Internet protest. Under the proposed SI there are no provisions for jail sentences for copyright infringement, removing links and domain names from search engines. What the order implements is a structure whereby they can apply for an injunction in the High Court against ‘intermediaries' (websites and Internet service providers) and individuals who are making money off work they did not create. A clue to the kind of sanctions the Courts might impose can be found in the order's reference to "due regard to the rights of any person likely to be affected by virtue of the grant of any such injunction". The wording implies that Courts act based on the scale of the infringement and the means of the defendant. This is not a measure designed to bankrupt people, yet the wording is sufficiently vague that in the wrong hands could lead to wholesale shutdowns of cloud services, social networks and even Web-based e-mail. Critics of the order say the recording industry has just been handed a nuclear option, yet there are already concepts in domestic and EU law that, properly clarified, can prevent a copyright apocalypse. The safe harbour defence Right now there are two kinds of broadband service provider: those that add content (eircom and Magnet, for example) to their offering and those that don't (UPC). Providers without ties to the recording industry - is those with no content agreements - would be well placed to seek clarity on the concept of the safe harbour. Under this defence a provider can argue they provide an infrastructure with no obligation to regulate what happens on it, much the same way a phone company cannot be held accountable for the nature of conversations held on its network. Minister Sherlock said the order would not compel networks to monitor their own traffic and that businesses cannot, under EU law, have their businesses affected by the whims of copyright owners. Under the safe harbour defence in the US's Digital Millennium Copyright Act rightsholders can issue takedown notices to have their content removed on a case by case basis, giving websites a fair chance to respond to complaints. Fair use At what point does reproduction and sharing become outright piracy. Some cases in the US saw rightsholders attempt to remove any and all traces of their work, extending to incidental background music in user-generated YouTube clips. Such lawsuits not only make bad PR, they present the recording industry as litigious patent trolls engaging in nuisance lawsuits to the detriment of the artists the industry represents. Clarifying the parameters of fair use would dissuade industry bodies from adopting a ‘sue them all and let the courts sort them out' approach. The central question to be addressed here is one of intent: has the creator of the ‘remixed' or reposted work *made* (as opposed to potential for making) any money off it? If so, then some kind of royalty is due to the rightsholder; if not, then nothing is owed. This would absolve users, discussion forums and social networks, and would work with any product from music to software. Individuals posting baby clips with music playing in the background need not be troubled. Large sites that rely on user generated content backed up by a mix of material submitted by record labels, studios and professional artists (YouTube) currently pay a licence fee or (Muzu.tv) have agreed a revenue share based on the number of times a piece of music is streamed. Debate in this area is ongoing in Ireland. The right to information If the new SI is all about bringing Ireland into line with Europe let's see what else Europe has to offer. In two decisions last year saw the EU court of human rights classified access to a satellite dish as a right in the context of the free movement of goods and services and the right to freedom of expression. and that separating television markets by territory was an anti-competitive practice. Both decisions have massive implications for how we receive broadcast content, but could spill over into how the Internet is treated in law. Without getting too far into the nuts and bolts of the decisions, should any entity try and limit avenues to public discourse either through hardware or service-level restrictions they are in violation of EU law. Sherlock's statutory instrument will give the recording industry a short term solution to its copyright woes. Few would mourn the loss of a service that exists only to illegally share content. A better solution lies with IRMA engaging with bodies like the Internet Service Providers Association of Ireland - something it has yet to do.

AT&T, T-Mobile To Transfer $1 Billion Worth Of Wireless Airwaves

Telecom giant AT&T is asking for approval from the Federal Communications Commission (FCC) to transfer $1 billion worth of wireless spectrum to cell carrier T-Mobile resulting from the failure of AT&T’s failed bid to purchase T-Mobile last year for $39 billion, reports Rue Liu for SlashGear. AT&T gave up on its plans to merge with T-Mobile in December after repeated scrutiny by the US Department of Justice (DOJ) along with lawsuits brought on by state attorneys general and rival carriers. After the FCC threatened to request an administrative hearing, AT&T decided the efforts were not leaning favorably in its direction and walked away from the plans. As part of its pre-negotiated terms for backing out of the acquisition, AT&T will give T-Mobile’s German owner Deutsche Telekom $3 billion in cash along with the $1 billion in spectrum allocation. Tom Sugrue, T-Mobile’s senior vice president for government affairs, speaking in the Wall Street Journal said, “this additional spectrum will help meet the growing demand for wireless broadband services.” T-Mobile, the fourth largest carrier in the US can certainly utilize this spectrum. They have not announced any plans for rolling out LTE 4G service and is currently hampered by its use of non-standard UMTS 3G service, writes Daniel Eran Dilger for Apple Insider. This prevents the carrier from selling Apple’s existing iPhone, which it has cited as a key reason for the company’s poor sales performance.

Ericsson and ZTE resolve patent license issues

In April 2011 Ericsson (NASDAQ:ERIC) filed lawsuits in Germany, UK and Italy against ZTE for infringing on several Ericsson patents related to GSM and 3G/UMTS cellular technology The parties have now signed a global cross-licensing agreement and both parties have also agreed to drop all litigation. "Ericsson has the strongest patent portfolio in the industry with over 27,000 patents and any company which sells mobile devices or systems needs a license from Ericsson. We have signed more than 90 patent agreements with different vendors worldwide. Now we can add ZTE to this group," says Kasim Alfalahi, Chief Intellectual Property Officer at Ericsson. ZTE signs a royalty bearing cross-licensing agreement that complies with Fair, Reasonable and Non- Discriminatory (FRAND) royalty compensation for access to part of Ericsson's patent portfolio.

Labour lashes out at Govt's long delayed 4G auction

Labour is blaming the Conservatives for the delays in the 4G mobile spectrum launch, which it claims is costing the economy £1m a day. Labour has blamed the Government for not being firm enough with Ofcom regarding the 4G mobile spectrum auction, and that the ongoing delays have cost the economy millions. Helen Goodman, Labour's Shadow Minister for Media, states that alongside the auction itself which is expected to raise £2-4bn in capital, the Government is also missing out £300m a year in licensing fees. Following the current round of consultation, the auction is now due to occur late this year, with 4G network rollouts in mid-2013 at the latest. "The auction could have taken place in 2010 but this government decided not to give Ofcom the backup to go ahead with the sale of 4G," said Goodman. It is possible that 4G networks may not be available until 2015. "Consumers need better mobile coverage, particularly in rural areas, and it is disappointing that it has taken the government 18 months to get on with the auction," Goodman said. "At a time of deep cuts to the public sector, the government is in effect losing almost £1m in revenue a day. We will be one of the last major countries in Europe to get 4G coverage, which is shameful because Britain is one of the largest producers of mobile phone technology in the world." A 4G spectrum auction was originally looked at in 2009, but 4G standards were not finalised at the time. Since then, Ofcom claims problems aligning UK spectrum with Europe and our slow analogue TV switch off saw the process drag out across 2010-2011. Other have been swift to disagree. Ofcom also claims it is focusing on ensuring the current, already overloaded 2G and 3G networks are stable for the Olympics, a justifiable enough goal, but one which will not please technophiles, businesses or especially rural customers. Mostly the arguments have been over how the auction should be conducted. Ofcom wants to preserve competition, while the mobile operators want to ensure there is no repeat of the 3G auctions in 2000. Those auctions netted the government an unexpected and astonishing £22bn - but this left many operators debt riddled and struggling to build and then monetise their investments, leading to the telecoms crash of 2001. A supposedly final round of 4G consultation completed in May 2011, with the auction due to occur around now. Threatened lawsuits from Vodafone and O2 saw Ofcom open a second round of consultation, which began last week. Both Vodafone and O2 already have some 4G spectrum, and weren't happy at perceived corporate welfare to the other market competitors. France Telecom and Deutsche Telekom's Everything Everywhere (owners of Orange Mobile and T-Mobile) as well as Hutchison-Whompoa (owners of Three Mobile) were to have spectrum reserved for them in the 800Mhz spectrum, alongside overall bidding limits, which Ofcom claimed was to preserve a competitive 4G market with four big mobile operators. Ofcom released its revised proposal document last week, which has seen Everything Everywhere lose this reserved 800MHz spectrum. Ofcom now claims Everything Everywhere already holds enough 4G compatible 1800MHz spectrum. The proposal also pushes two new approaches to pushing national mobile coverage past the previous threshold of 95%. Germany has completed its spectrum auction, earning its government €4.4bn, and German telcos are already beginning to rollout 4G networks. France's radio spectrum auction is currently under way. The US already has a functioning 4G network and last week's CES show saw the second generation of 4G phones unveiled. If the UK's networks aren't up before 2015, by Goodman's estimations it will have cost the economy £1.5bn pounds. 4G has been much hyped as a solution to the rural/urban digital divide, which has seen telcos struggling to economically justify rolling out high speed broadband to rural areas. 4G would wirelessly produce similar broadband speeds to what general fixed line users in UK cities receive today.

Blackmailing NBN Co works best through the media

opinion Over the past week a rather pathetic little game of bluster, bluff and ultimately light blackmail has played itself out in Australia’s telco sector as a handful of Australia’s major ISPs have done everything in their power to demonstrate just how self-interested they can be when it comes to exploiting the National Broadband Network. This game — let’s call it Quigley’s Hold’em, or perhaps Dalby’s Five DSLAM Draw — probably kicked off, as most such shady efforts do, late in the week, perhaps as the shadows of last Friday night were drawing near and the weekend, with all its inherent vices, began to beckon the players away from the clear sunlight of honest dealing. At the time, the head negotiators from most of Australia’s major ISPs — at least including iiNet and Internode, but likely Telstra and Optus as well — informed the National Broadband Network Company that they were not planning to sign the comprehensive wholesale agreement which it had labored with them for some 15 months to develop. Despite the fact that the document had already been through five draft iterations and hundreds of hours of consultations, the ISPs told NBN Co, it had still not addressed some of their key concerns; namely, the ability of the Australian Competition and Consumer Commission to oversee the relationship, the liability in the case of problems, and equivalence issues with all ISPs signing the same document. Now, normally this kind of issue would be part of the normal cut and thrust of negotiation between the ISPs and NBN Co — fair points to raise. But, to add a little punch to their demands, at the last moment, the ISPs played two hidden trumps: Timing, and the media. Unlike the ISPs, NBN Co has been on a clock in the negotiations. The existing trial agreement between the two sides, which has allowed some 4,000 customers to be signed up to NBN Co’s infrastructure nationally, expired today. This isn’t a problem for the ISPs. After all, they need be in no rush to move their existing customers onto the NBN’s infrastructure. Either way — if the customers stay or go — the ISPs get paid. But it is a vast problem for NBN Co. The ridiculous furore that erupted when NBN Co released its current customer sign-up numbers just after New Year’s Eve should go some way to illustrating the fact that the company is currently fighting for its own survival. If NBN Co can roll out enough infrastructure and sign up enough customers over the next year, it faces a chance of continued existence under a Coalition Government; if its effort stall, it will fall victim to Tony Abbott’s oft-repeated promise to shut the project down. The ISPs know this. And so, when faced with NBN Co’s intransigence in modifying the terms of its wholesale contract, at the eleventh hour, they bent the company over a barrel and reached for one of the easiest and most manipulable weapons available to anyone in Australian society: The media. “NBN Co to bar defiant telcos,” screamed the Financial Review’s article on Monday morning, which painted NBN Co as a draconian monopoly, “threatening” to “ban” ISPs from signing up new customers. And the rest of the media swung into line, with more headlines: ‘NBN Co pressures telcos on access agreements’; ‘NBN Co stands firm on wholesale contract’; ‘Under 50% of ISPs sign onto NBN contract’; ‘Tension as NBN trial agreement ends’; the headlines went on forever. On Monday, NBN Co was standing fairly firm, soberly highlighting its extensive 18 month consultation efforts and the lengths to which it had gone to meet the ISPs’ demands. But it only took two days for the company — flailing under a fictional ‘pressure’ entirely created by the ISPs and a media ravenous for fresh meat in the slow news days of the new year — to buckle. NBN Co’s bluff had been called as the ISPs refused to give ground. This morning, it was again the Financial Review which brought us the new developments. “NBN backs down on agreement,” the newspaper reported. And “sources close to negotiations” — read: the ISPs — noted that NBN Co had retreated in precisely the areas the ISPs were complaining about. Game over. Quelle surprise! Now, I don’t want to go too far in alleging improper behaviour on the part of the ISPs. Solid journalistic efforts by the AFR’s reporter on this issue, David Ramli, did faithfully bring this important issue to light. And, of course, the fact that we know about all of this is itself a positive thing: Transparency in the NBN process is only to be lauded. Then, too, it is common commercial practice for companies of any stripe to use any legal tool at their disposal to bring negotiations to a successful close. Nothing illegal has been done here, and probably even nothing unusual for the private sector. However, there are several disturbing aspects to what happened this week which I think bear further rumination. The first is the adoption by several major ISPs of the sorts of language during this NBN process which we are more accustomed to hearing from the Daily Telegraph. Internode carrier relations manager John Lindsay, for example, raised a rather unusual scenario when speaking to the AFR about the liability issue. “You don’t want to be in a position where NBN Co’s installers have wrecked your customer’s house or have no incentive to do connections in a timely fashion, with you getting the blame,” he said. Really? Painting NBN Co as house wreckers? I would have thought that below Lindsay. Then there was this curious statement on the part of iiNet regulatory chief Steve Dalby, again on the liability issue: “It means that if customers are affected by outages they can sue us, but we can’t pass that liability through to the cause, which would be NBN Co, and that just doesn’t make any sense.” Really? It’s extremely rare — in fact, almost unheard of — for a customer to sue an ISP about their connection going down. I can’t imagine this will be a regular event under the far more reliable fibre future NBN Co has planned for us. NBN Co ‘wreckers’, customer lawsuits? Is the iiNode which we know and trust? It doesn’t seem like it to me. Then there was the nature of the negotiations themselves. Wikipedia defines a cartel as being a formal (explicit) agreement among competing firms, which Australia’s ISPs most certainly are. It then goes on to explain that cartels usually occur in oligopolistic industries, where there are a small number of sellers, usually selling homogeneous products. The aim of cartels, it adds, is to increase the profits of individual members by reducing competition. Maybe I’m taking this argument a bit far, but when most of Australia’s ISPs gang up together on the same issues and force a major wholesale service provider like NBN Co to back down, by exerting pressure through the media, that sounds a great deal like a cartel to me. There’s no competition here; there’s no fair play; there’s only a gang of what — five or six ISPs, representing overwhelming market share — effectively publicly blackmailing a joint supplier. Then there’s the political angle. The whole reason why the ISPs are able to exert pressure on NBN Co is because the company has aims that are not commercial. NBN Co’s mission is to roll out telecommunications infrastructure around Australia and then sign customers to use it, through utilising relationships with retail ISPs. This isn’t a commercial business proposition — it’s a mandated government policy. And so while it doesn’t really have to ‘sell’ its products and services to ISPs as such, as they will be forced to use them eventually anyway (when other broadband networks are shut down), neither do ISPs have to buy them, until that shutdown date comes. The difficulty is, however, is that while NBN Co is locked into its course of action and cannot deviate from its mission, the ISPs are not, and they all have varying degrees of cooperation with the NBN policy. Some, such as Internode (or should I say, iiNet?), are pretty much wholly on board, while others such as TPG are so far ignoring the whole thing altogether. This gives the ISPs an extraordinary degree of non-commercial negotiating power. This week, the ISPs flexed that muscle. “Back down on your commercial contracts,” they told NBN Co, “or else we’ll make the NBN project look like it’s stalling, and your political masters very unhappy.” The pathetic statements they issued this afternoon, seeking the validation of the public and the media for signing contracts with NBN Co — whose public credibility they flirted with wrecking through their game — only makes blisteringly obvious their belief in the usefulness of the press in the negotiating process. As a believer in free markets and the value of competition, all of this makes me very, very uncomfortable. We have collusive action by Australia’s telecommunications giants, leveraging political angles and the threat of the media. We have bluster from formerly honourable ISPs painting an important national project as “wrecking” people’s homes. And we have an 18 month NBN negotiation process undercut at the very last minute. Who knows what the long-term implications will be. If I were the ACCC, I would be looking very, very carefully at the events of this week, as I’m sure Shadow Communications Minister Malcolm Turnbull and other elements of the Coalition are. How far can we trust the major players in Australia’s telecommunications sector? At this point, I am far from sure.

Ericsson reshuffles pack to capitalise on IPR

With a flurry of patent lawsuits dominating headlines in the industry, Ericsson has taken steps to place more emphasis on protecting its intellectual property. The vendor claims to have the industry’s strongest wireless IPR portfolio with 27,000 granted patents covering a range of technologies, such as wireless access and WLAN. It has already signed more than 90 license agreements with firms in the industry and as wireless access is now being added in new types of devices, Ericsson is reorganising its Licensing and Patent Development department with the aim of creating a larger revenue stream from its IPR. The vendor is aiming to increase IPR revenues above the SEK 4.6bn ($662m) net revenue generated in 2010. In addition, the company’s chief intellectual property officer, Kasim Alfalahi, will no longer report to Håkan Eriksson, CTO within the group function technology and portfolio management division, and will instead report directly to president and CEO Hans Vestberg. “The ICT industry is built on standardised and shared technologies, making it possible to create a global mass market for mobile telephony and mobile broadband. Today’s six billion mobile phone subscriptions, and close to one billion mobile broadband subscriptions, would not be possible without this industry mentality,” said Vestberg. “As we are entering the Networked Society, we will see built-in wireless access beyond traditional devices like phones, laptops and tablets, providing new services to the consumers. This provides an interesting business opportunity for us, having this industry’s strongest patent portfolio, as any company or manufacturer that wants to get in there will need an agreement with Ericsson.”

FCC Chairman Pushes Spectrum, 'Proud' of Net Neutrality Efforts

The chairman of the Federal Communications Commission made his annual appearance here at the Consumer Electronics Show this afternoon, and his message was a familiar one—more spectrum, please. He also touched on the AT&T, T-Mobile merger (sort of) and net neutrality. "Nowhere are the opportunities and challenges greater than with mobile broadband," Chairman Julius Genachowski said. "Tablets, ultrabooks, 4G phones, machine-to-machine all ... consume now and are going to consume more and more data." Genachowski reiterated his support for spectrum auctions, which would allow TV broadcasters with excess spectrum to sell to the highest bidder. "We need to get it done now and we need to get it done right," he said. "The plain fact is that the aggregated consumer demand for spectrum for broadband is increasing at a very rapid pace while the supply ... of spectrum remains essentially flat." If that sounds familiar, it is. It's the exact same thing he asked for during his appearance at the 2011 CES. "The coming spectrum crunch threatens American leadership in mobile and the benefits it can deliver to our economy and our lives," Genachowski said last year. Very few things happen overnight in Washington, however—or over the course of a year, it seems. Congress, the FCC, and stakeholders have been battling for ages over how to solve the spectrum crunch, but as more and more people snap up data intensive gadgets like the iPad or Galaxy Nexus, a spectrum crunch looms. The carriers currently have enough spectrum to keep those calls and that data coming, but for how long? Genachowski also sat down with CEA president Gary Shapiro and the two talked about the failed AT&T, T-Mobile deal as well as net neutrality. Well, Shapiro tried to get Genachowski to talk about the AT&T, T-Mobile merger. Without addressing the companies specifically, all the chairman would say was that the whole process "was a reminder of to all of us of the benefits and power of competition." Congress, meanwhile, gave the FCC and Justice Department the power to preserve competition and "on balance, the system ... has worked," Genachowski said. On net neutrality, meanwhile, Genachowski admitted that he wished he "had inherited something different" when becoming chairman, "but that's life," he said. The net neutrality rules the commission approved in December 2010 and which went into effect on Nov. 20, 2011, were an effort to preserve the broadband economy, Genachowski said. "The vision that I have ... is for a virtuous cycle of investment and innovation and I thought that we had to try and do what we can to bring peace" to the situation, he said. "I discovered that the gap ... in this fiery debate wasn't that large. We [did] everythig we can to bridge this gap and try to have a simple framework that gives much more certainty, [and] that's what we've done. It was controversial and not something everyone agreed with ... but I'm proud of the result." The FCC is currently facing various lawsuits from groups and companies that believe the FCC does not have the right to hands down net neutrality rules, as well as a suit arguing that the rules don't go far enough.