June 8, 2007 9:03 AM PDT

Week in review: Cell phone hang-up

A decision banning the importation of third-generation handsets from Qualcomm could have a wide-ranging effect on the wireless industry.

The U.S. International Trade Commission on Thursday ordered an import ban on some phones using 3G chipsets from Qualcomm that have been found to infringe on a patent held by Broadcom. The import ban is a bit of a compromise, as it applies only to new models of phones that have not yet been sold in the U.S. It does not apply to cell phone models imported for sale to the general public on or before Thursday.

Last year, an administrative judge at the ITC found that Qualcomm had violated Broadcom's patent, which covers technology that helps conserve battery power when a cell phone is not able to get a network signal. The technology is used in chipsets Qualcomm has developed for high-speed wireless networks, known as 3G networks, which use the technologies EV-DO (Evolution Data Optimized) and WCDMA (wideband code division multiple access).

Qualcomm executives said there would be little impact on the company financially in the near term. But analysts agree that in the long term, a ban on the import of future cell phone models that use this technology could have a substantial impact not just on Qualcomm, but on cell phone manufacturers such as Motorola and Samsung as well as mobile operators AT&T, Sprint Nextel and Verizon Wireless.

The ban could be particularly tough for all the major cell phone operators, which during the past several years have spent billions of dollars deploying their 3G networks. Now that they have extended wireless broadband to a large portion of their footprint, these carriers need subscribers to upgrade their handsets to new 3G versions. It's only through these new 3G-enabled devices that subscribers will be able to spend money on new data services, such as over-the-air music downloads or video services.

Some bewildered CNET News.com readers bemoaned the decision as a bit absurd.

"Yet another demonstration of the absurdity of the patent system," wrote one reader to the News.com TalkBack forum. "Of course it's hard to feel sorry for Qualcomm, since they are one of the welfare mommas of the patent system too."

Apple frenzy
The much-anticipated Apple iPhone, which will be sold exclusively for AT&T's network, will not be affected by the ban because the phone does not use WCDMA. That will bring some comfort to Apple iPhone watchers, who also breathed a collective sigh of relief when TV commercials shown during 60 Minutes revealed the June 29 release date of the device.

With about three weeks before the iPhone goes on sale, Apple and AT&T retail sales representatives say they are preparing for a quick sellout on the launch date. Clerks at Apple and AT&T stores said they didn't know how many phones they would be getting for the big launch. Some blogs have speculated the number might be as few as 40 devices per store.

Sales representatives also said they are expecting lots of people to show up for the launch, many of whom will likely camp out overnight in front of stores to make sure they are one of the first to get the new phone.

The iPhone, announced in January, will be sold only on AT&T's and Apple's Web sites and at AT&T's roughly 2,000 retail locations and in nearly 200 Apple stores around the country. Neither company is accepting pre-orders.

The phones come in two versions, a 4GB model for $499 and an 8GB version for $599 with a two-year AT&T service contract.

Apple followers also enthusiastically greeted the news that the company has updated its high-end MacBook Pro laptops with faster processors, better graphics and more memory. The laptops are still available in three models: two 15.4-inch versions that retail for $1,999 and $2,499, and a larger, 17-inch edition that costs $2,799.

This summer is expected to be one of the most pivotal times in Apple's history.

CEO Steve Jobs is scheduled to give a keynote speech at the Worldwide Developers Conference on Monday in San Francisco. The event is expected to be dominated by Apple's Leopard OS, just like last year's event. Developers will walk away with a near-final copy of Leopard, and Jobs is expected to provide further details on some of the features inside the new release. Apple does not plan to ship the final version until October.

On the hill
A massive immigration bill that would have created a new government database for employee verification and rewritten green card laws died in the U.S. Senate. The proposal, which represented the most sweeping overhaul of U.S. immigration laws in a generation and was backed by President Bush, stalled in a procedural vote in the Senate of 45-50. At least 60 votes were needed.

Technology companies had fretted that the green card overhaul would chip away at the predictability of the current process for recruiting and hiring foreigners and leave too much control over the talent-screening process in the government's hands.

Also on Capitol Hill, politicians threatened to enact new laws if universities don't do more to prevent their students from unlawfully swapping music, movies and other copyrighted files on campus networks. Members of the House of Representatives' Science and Technology Committee said college administrators must seriously consider using not only educational campaigns but also technological filters to reduce illicit file swapping among students.

The problem in policing Internet connections is that it's not easy for a network provider to detect which packets are illegally carrying copyrighted material and which are not. About the best universities can do is measure the amount of information transmitted, which might indicate unlawful content.

Over objections from Internet companies and online advertisers, the House also approved a bill touted as an antispyware measure. By a 368-48 vote, the House endorsed the Spy Act, which is broader and more regulatory than a second bill that was backed by politicians from Silicon Valley.

The more regulatory version proposes punishments for anyone who slips code onto computers without authorization in an attempt to "impair" a machine's security features, to transmit personal information about the machine's user without the user's knowledge, or to commit other federal crimes such as identity theft. It would also require that unwanted programs be easy for consumers to disable.

One unusual aspect of this political tussle is that spyware is already illegal and, according to government officials, no new laws are probably necessary. The Federal Trade Commission has told politicians it already possesses broad authority to punish any fraudulent and deceptive adware or spyware practices with fines.

Also of note
MySpace.com filed a request in a Pennsylvania state court asking for guidance as the social-networking service responds to demands for information about convicted sex offenders using the site...Palm is selling a 25 percent stake to private-equity firm Elevation Partners for $325 million and is bringing in Jon Rubinstein, who formerly ran the iPod division at Apple, as executive chairman of the board...Microsoft Chairman Bill Gates delivered the commencement address at Harvard University and was awarded an L.L.D. honorary doctorate bestowed upon Harvard's commencement speakers. Gates dropped out of Harvard as a junior in 1975 to run Microsoft full time and never earned his bachelor's degree.

See more CNET content tagged:
Qualcomm Inc., W-CDMA, ban, AT&T Corp., Week in review

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Everybody prepare
Windows Mobile 6 without productivity features is coming!
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