Appeals court halts FCC red-tape cutting quest

The US Court of Appeals for the District of Columbia Circuit has put the brakes on FCC attempts to reduce bureaucracy surrounding small cell deployment in the US.

In March last year, the FCC introduced new rules which would remove certain approvals required for the deployment of small cells. In short, telcos would no-longer have to seek review from the National Historic Preservation Act (NHPA) and National Environmental Policy Act (NEPA) prior to deployment.

In response to the new rules, the United Keetoowah Band of Cherokee Indians in Oklahoma, the Blackfeet Tribe, and the Natural Resources Defense Council (NRDC) objected, suggesting the FCC should not be allowed to remove the approvals with such ease and with a lack of consultation.

In this case, the US Court of Appeals for the District of Columbia Circuit has agreed. Certain aspects of the order have been upheld, however, the removal of this red-tape has been condemned by the Federal Judges.

“We grant in part the petitions for review because the Order does not justify the Commission’s determination that it was not in the public interest to require review of small cell deployments,” the courts opinion states.

“In particular, the Commission failed to justify its confidence that small cell deployments pose little to no cognizable religious, cultural, or environmental risk, particularly given the vast number of proposed deployments and the reality that the Order will principally affect small cells that require new construction.”

For the FCC, this is a loss, despite a positive statement from Commissioner Brenden Carr.

“I am pleased that the court upheld key provisions of last March’s infrastructure decision,” said Carr. “Most importantly, the court affirmed our decision that parties cannot demand upfront fees before reviewing any cell sites, large or small.

“We are reviewing the portion of last March’s decision that the DC Circuit did not affirm and look forward to next steps, as appropriate.”

This might sound positive but let’s not forget the objective of the FCC in introducing these new rules; speed-up deployment of 4G and 5G infrastructure in regions which might fall into the digital divide.

As we move forward into the 5G era, new opportunities are going to emerge for all economies around the world. The financial benefits are constantly being thrust into our face by telco lobbyists, however for these economic surges to be realised the right infrastructure needs to be in place.

This is where the FCC plays the most significant role. Pai has taken a machete to red-tape in recent years to offer more freedoms to the telco and media industry on the whole, and this was another step in that direction. Removing certain tick boxes would help the telcos roll-out new networks faster, though it seems it has over-stepped its mark in this instance.

Qualcomm lands roundhouse in Apple legal battle

The on-going legal battle between Qualcomm and Apple has taken a twist as the US District Court for the Southern District of California has ruled in favour of Qualcomm.

The court has decided Apple’s iPhone 7, 7 Plus, 8, 8 Plus and X infringe two Qualcomm patents, while the iPhone 8, 8 Plus and X devices infringe on a third. As a result, the jury has awarded Qualcomm $31 million in damages.

“Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them,” said Don Rosenberg, General Counsel for Qualcomm.

“The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents. We are gratified that courts all over the world are rejecting Apple’s strategy of refusing to pay for the use of our IP.”

The three patents support different functions on iPhones, all of which has become normalised features of the devices. Patent No. 8,838,949 enables ‘flashless booting’, removing the need for a separate flash memory and allowing smartphones to connect to the internet quicker after being turned on. Patent No. 9,535,490 speeds up internet connections. Finally, Patent No. 8,633,936 enables high performance and rich visual graphics for games, while also increasing battery efficiency.

The $31 million bill will actually mean very little to Apple. Looking at the iLeader’s 2018 full year results, it would take just under 62 minutes Apple to generate revenues to cover the $31 million, though it does set precedent around the world.

Alongside this ruling in San Diego, courts in China and Germany has also ruled Apple has infringed Qualcomm patents, questioning whether Apple is legally allowed to continue sales not only in these countries, but other territories around the world. In Germany, Apple has been barred from selling any iPhone 7 and 8 models, while in China all devices from the iPhone 6 to the iPhone X have also been banned from sale.

The legal battle between two of the digital economy’s heavyweights has been dragging on for some time now, but this round has been undeniably chalked up to Qualcomm.

Huawei facing US trade secret theft indictment and ZTE-style ban

The US Department of Justice is rumoured to be pursuing charges relating to trade secrets theft against Huawei, while four politicians have tabled a bill for a ban similar to what ZTE faced last year.

Leaving the Department of Justice for the moment, a bi-partisan collection of politicians have tabled the so-called ‘Telecommunications Denial Order Enforcement Act’, a proposed bill which would compel the White House to ban Huawei from using US components and IP within its supply chain. The ban would be the same punishment ZTE faced early last year.

“Huawei and ZTE are two sides of the same coin,” said Democratic Senator Chris Van Hollen. “Both companies have repeatedly violated US laws, represent a significant risk to American national security interests, and need to be held accountable. Moving forward, we must combat China’s theft of advanced US technology and their brazen violation of US law.”

Aside from Van Hollen, Republican Senator Tom Cotton, as well as Representatives Mike Gallagher (Republican) and Ruben Gallego (Democrat) are also supporting the proposed bill. This should hardly come as a surprise as the ZTE ban was imposed for violating the exact same trade sanctions which Huawei has allegedly ignored.

The saga surrounding the ZTE ban was short-lived, incredibly volatile and almost fatal. After being found violating trade sanctions, US Department of Commerce’s Bureau of Industry and Security (BIS) imposed a denial of export privileges order against the firm, denying it access to any US suppliers. President Trump stepped in to save the firm, which looked doomed as a result of the ban, before Congress blocked his efforts. Eventually a resolution was reached, though ZTE has been skating on thin ice since.

If precedent is anything to go by, Huawei should face the same punishment should it be found guilty of the same activities. Last month, Huawei CFO Meng Wanzhou was arrested in Canada, accused of violating the same trade sanctions with Iran using a suspect firm known as Skycom. Meng has been released on bail and awaits trial, though it appears the four politicians are already presuming guilt. Or maybe they are just being prepared.

Perhaps this is a sign the politicians do not believe President Trump is committed to precedent and appropriate action. The actions against ZTE smelt suspiciously like one of Trump’s strategic moves in the on-going trade war with China, though perhaps he did not realise he would have to do the same 12 months later, potentially antagonising the Chinese government with a move which is not in the grand plan.

The politicians might be tabling this bill to make sure Trump can’t find a reason not to ban Huawei. Following the arrest, Trump seemed to suggest in an interview with Reuters that he would be willing to make the Canadian charges go away if it would help him the US in its dispute with China.

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary,” Trump stated.

Not only does this completely undermine the standing of the Canadian judicial system, but also suggests Trump is willing to bend (or break) rules to bring the Chinese government to its knees. Perhaps Congress does need to be proactive to make sure the President follows the rules, taking appropriate action instead of whatever ludicrous idea floats in the breadth between his ears.

What is worth noting is the stance of Huawei executives. Clearly, they do not agree with anything which is going on, but both Rotating Chairman Guo Ping and Rotating CEO Ken Hu put across messages stating the resilience of the business. Ping and Hu suggested a ban would not impact the Huawei supply chain in the same manner as it did ZTE.

Heading back to the Department of Justice, the Wall Street Journal has reported the agency is pursing charges against Huawei concerning theft of trade secrets.

An indictment should be heading over to the Huawei offices in the near future, focusing on allegations the firm stole robotic mobile-testing technology from T-Mobile. The technology, known as Tappy, mimics human fingers and is used to test smartphones. A civil case between T-Mobile and Huawei over the technology was filed in 2014, though after a criminal investigation the Department of Justice feels it is appropriate to step in and raise criminal charges.

This case is a separate concern from all the other chaos which has surrounded the firm in recent months, though it will be just as concerning as the punishments can be incredibly severe.

The primary federal law that prohibits trade secret theft is the Economic Espionage Act of 1996, which allows the US the U.S. Attorney General to prosecute a person, organization, or company that intentionally steals, copies, or receives trade secrets. If the case if brought against an individual, the punishment could be as much as 10 years in prison or a $500,000 fine. However, we suspect the government would want to punish the firm not an individual, as Huawei would simply claim that person did not represent the company culture, in-line with White House aggression against China.

If a conviction is made against a company the fine can be increased to $5 million. However, if the Attorney General can prove the theft was made on behalf of a foreign government, this would be considered the silver bullet for the White House, corporate fines can be doubled, imprisonment could be 15 years and proceeds derived from the theft can be seized.

In short, Huawei has found itself in another uncomfortable position in the US. It does not appear 2019 is going to be any better than 2018 on the US side of the pond for Huawei.

Apple draws level with Qualcomm after Germany win

A German court has dismissed Qualcomm’s efforts to block iPhone sales in the country as ‘groundless’ as Apple hit back in the on-going global patent dispute.

According to Reuters, the regional court in the city of Mannheim threw out the case stating the patent in question was not violated by Apple’s installation of Qualcomm chips in its smartphones. Qualcomm has already said it will appeal the decision, as the pair trade blows in various courts throughout across the world.

This case focuses on the use of Intel-chips in certain Apple devices, with Qualcomm suggesting one of its patents had been infringed. The patent in question relates to power management.

Back in September, Qualcomm effectively accused Apple of corporate espionage, questioning how the gulf in performance when measuring its own chips against Intel’s could have been bridged so quickly. However, this argument clearly wasn’t enough to convince the Mannheim judge of wrong-doing.

Having already secured an order to block the sale of certain iPhones through a ruling in Munich, as well as a similar decision in China, Apple needed a win to halt the Qualcomm momentum. The pair have been trading blows over patents and royalties for years now, though the on-going case in the US could prove to be the most significant battle of the dispute.

The chipmaker is currently facing a FTC antitrust investigation, which has escalated to trial, currently being heard in the US District Court in San Jose, California. As you can imagine, Apple, Intel and various others have been playing the part of very proactive cheerleaders, urging on the FTC from the side-lines.

This trial has now concluded for the sixth day, with the FTC calling various witnesses from tech companies such as Apple, Samsung and Ericsson, as well as IP experts from consultancies and universities. The aim is to prove Qualcomm is effectively a monopoly, abusing this prominent position through excessive royalty payments and unreasonable licensing agreements for years.

With the FTC now taking a seat, the next couple of days will see the Qualcomm lawyers preach their case. Here, the team will aim to prove the royalty payments are justified, such is leadership position Qualcomm has worked up in the segment, and the licensing arrangement is the most beneficial and simplistic way to do business. The Qualcomm lawyers are certainly well practised in the art of arguing against antitrust accusations, so it will be interesting to see which way this trial heads.

While the win in Germany is certainly a positive for Apple, which has been on the losing side of a few of the recent skirmishes, the FTC trial is the big one for both parties.