BOSTON — Hold on to your seats, this is going to be a lesson on intellectual property rights, which I will explain to the best of my ability.
One reason why WiMax is predicted to be so much cheaper than traditional cellular networks is patents.
In the cellular world, many patents are held by a few individuals, which gives them a lot of power to set the market price. One example: Qualcomm. It owns a majority of the patents for CDMA networks, which both Sprint and Verizon Wireless operate. And observers say it charges steep royalties for licenses.
It sounds as if Sprint Nextel is doing everything in its power to avoid that scenario with WiMax and the vendors it has chosen to work with — Motorola, Intel and Samsung.
Fred Wright, Motorola senior vice president, said Sprint Nextel was really aggressive in negotiating intellectual property rights with Motorola.
“They are very demanding when it comes to price-performance expectations,” he said. “They were very demanding around the licensing of technology. They are very careful not to create another Qualcomm situation.”
He added: “Samsung, Motorola and Intel all have agreements on licensing that will keep things much cheaper.”
The issue, although technical and hard to summarize, was an underlying theme of the show this week at WiMax World, with lots of sessions on how the industry can work together to keep costs down and not create a concentration of power with one company.