InterDigital says Huawei is setting a dangerous precedent with patent lawsuit

Huawei has filed a lawsuit challenging the royalties it’s charged, but InterDigital CEO thinks the saga could have a much more damaging and wide-ranging impact on the industry.

Lawsuits in the telco industry are not uncommon, while they are pretty much part of the daily routine for anyone who deals with patents. According to InterDigital CEO Bill Merritt, the dispute is not the problem, it’s the way that Huawei is hoping to get a resolution, heading towards localised judicial systems as opposed to international, and standardised, arbitration.

“Standards have done a great job at breaking down national walls, creating a single playing field, and we think pricing should be the same,” said Merritt.

As it stands, Huawei has filed a lawsuit with the Shenzhen Intermediate People’s Court (January 2) accusing InterDigital of not licensing patents on fair and non-discriminatory terms. The lawsuit follows the expiration of a prior licensing agreement (December 31) with the pair not able to come to an agreement on future terms.

Long story short, Merritt pointed out Huawei wants to pay less for the patents. It’s a simple dispute, based on the success of Huawei smartphones and devices over the last year or so. As Huawei is shipping more units, it feels it should be offered a more competitive rate due to economies of scale. InterDigital however, feels it is offering a fair and reasonable price. The court case will decide royalty payments for the next four years (2019-23).

From Merritt’s perspective, the issue is not the dispute but the lawsuit itself. In the past, with Huawei and other customers, InterDigital has chosen to go down the route of arbitration, an option which Merritt feels is best in this situation as well. In most arbitration cases, each party selects a professional arbitrator, before the pair jointly select a third independent one. The idea is that the trio would assess all the information in the contract, look at market precedent as well as future developments, to decide a competitive and reasonable price for the transaction. It’s (in theory) an independent and neutral way to resolve conflict.

In this case, arbitration was offered as a possible resolution, but Huawei declined, instead electing to head to the regional court. This is where the danger lies; the Shenzhen Intermediate People’s Court is a localised institution which has influence in China. The risk is regionalised rate setting which would cause chaos considering how many jurisdictions there are around the world.

To compound the issue of regionalised rate setting, not only are you likely to have varied approaches and opinions, an international supply chain does not lend itself well to this scenario. The majority of devices and products which are sold today are manufactured in a variety of different countries and regions; the economy has been globalised. Merritt said if you are having to factor in several different regionalised rates for production of devices, the whole supply chain could turn into a disaster.

“The number of disputes could easily be reduced if parties committed to arbitration,” said Merritt.

Unfortunately for Merritt and InterDigital, the two technology powerhouses of the world are increasingly promoting more nationalised agendas and policies which encourage isolationist thinking. It seems we can’t go a day without referring to the trade conflict between the US and China, but the idea of regionalised rate setting, which this lawsuit encourages, is another step away from the international ecosystem, the healthiest option for a profitable and sustainable telecommunications industry.

This is a case which might be worth keeping an eye on over the coming months, it might just lead the patent segment down a worrying and complicated red-tape maze of regionalised price setting.

5G: Are we there yet? periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Diana Pani, Director of R&D, and Bob Olesen, Senior Director, Engineering at InterDigital look at some of the hype factors surrounding 5G. 

As many of us expected, 2018 has been the year of 5G operator announcements. In the weeks leading up to Mobile World Congress, the media was awash with trials and claims—from KT, Qualcomm and Samsung achieving multi-vendor 5G New Radio (NR) interoperability, to Vodafone and Huawei completing the world’s first 5G call. US operator AT&T boldly announced that it was planning to deploy 5G across designated US cities by the close of 2018. T-Mobile US then followed in AT&T’s footsteps with a very similar announcement,  with its president and CEO John Legere even stating that, “Dumb and Dumber are in a meaningless race to be first. Their so-called 5G isn’t mobile, and it’s not even on a smartphone…T-Mobile has massively bigger plans for a truly transformative 5G experience on your smartphone nationwide. We’re playing the long game … the only game that matters.”

Announcements like these are designed to get the media—and especially the tech media—excited, even more so when you consider that AT&T announced that it would be using software defined networking (SDN) and network function virtualization (NFV) technologies to power its 5G network. Surely with an impressive array of tech buzzwords and announcements of this nature from some of the world’s largest operators, the mobile industry must finally be 5G-ready, right?

The truth is actually somewhat different. While bold statements and aggressive timelines from operators are surely a sign of things to come, in reality, we aren’t quite there yet. The industry is currently in the midst of a 5G hype cycle, with operators in a race to deploy either the first, or the biggest, 5G network. But what is the true state of play?

Hype Factor #1: “We’ve launched standards-compliant 5G”

Despite the many claims from global operators around the world, the progress of 5G standards suggests that we may all need a little more patience as we await full commercial deployment of 5G. The move from 4G to 5G requires a lot of investment in both the network and radio interface, which means we can’t expect 5G to just “happen” overnight. Instead, we will see 5G emerge in phases over the coming years, with each phase focusing on different aspects of its development and deployment.

Although operators like AT&T have begun announcing 5G as a capability, the reality is a bit more nuanced. New Radio (NR) chipsets will not be commercially available before the end of 2018, which implies that operators will begin the preparation for an eventual 5G network by enabling the network to be “5G-ready”, even while still servicing LTE and LTE-Advanced Pro devices. And while this means it has some 5G-like features, such as 4×4 MIMO, carrier aggregation and high-order modulation, there is still some way to go until the operator has truly deployed 5G. So AT&T’s rollout of 5G is indeed “standards-compliant” … it’s just that the standard is LTE.

Hype Factor #2: “Our network is 5G-ready”

As mentioned, there are several phases to 5G. The first phase, officially known as the “first drop”, which includes the radio and core network system architecture specifications, was completed in December 2017. This was focused on the development of non-standalone NR technology operating in frequencies below 56.2GHz to support enhanced mobile broadband (eMBB). Existing LTE equipment will support the first drop for coverage and core network connectivity. Standardization of standalone NR technology, due to be completed in mid-2018, will support the second drop of NR. Both non-standalone and standalone NR 5G systems will support increased data rates, and reduced latency relative to 4G.

Now that the first phase of NR is complete, we can expect to see early 5G deployments in hotspots, where 5G is used as an assistive technology to existing 4G networks. Actual full standalone 5G deployments may be a bit further down the road, as these are dependent on the overall completion of the NR specifications. But the early drops will allow operators to deploy NR, achieving the benefits of high data rates and lower latency, while leveraging existing network infrastructure and deployments.

For operators to claim complete 5G readiness, they really need to wait for the completion of the second phase. While 3GPP introduced different phases to allow operators to have early ‘roll-outs’ of 5G to reduce latencies and deliver better users experiences, operators simply cannot claim to have a “5G network” unless two other major components are in place: the backhaul and network core.

When it comes to the core network, virtualization and SDN are crucial for the development of 5G—and, again, AT&T’s claims, in this case, are absolutely accurate. The 5G core network was designed as a service-based architecture to enable full virtualization and flexibility of implementing a network as a service. AT&T and several vendors, including Ericsson and Huawei, are working hard at 5G trials and revolutionizing the network. Some have already announced a few products (5G plugins) to enable this. But for devices to operate and connect to this new 5G core network, standalone NR and protocols for the 5G service-based core network interactions will be required, which are expected to be completed later this year.

Hype-Factor #3: It’s a sprint, not a marathon

It’s worth reiterating that, despite ambitions, 5G simply can’t be rushed, and the technology will evolve over the next few years to meet user and market demand.  The first phase has led to the creation of a baseline 5G system, both on the radio and the core network side, which has been designed in a flexible and forward compatible manner to allow for phased deployments and future evolution. In technology generally, people value “disruptive” breaks with existing technology, but in mobile telecoms, the ability to build progressively is incredibly important. It also ensures continuity, ease of deployment and risk reduction.

As we mentioned, the next phase of 5G (“Phase 2”) will begin in mid-2018, and will be focused on the development of new features and support of new use cases/verticals for 5G NR as well as operation in higher frequencies up to 100GHz. Some of the use cases for 5G NR include vehicular communications and massive mid to high-end machine type communication like video surveillance and factory automation.

However, new radios, spectrum, and core networks only solve two-thirds of the 5G reality challenge. The architecture changes being discussed, such as cloud-RAN, higher capacities with mmW spectrum, and the overall densification of cells means that backhaul—more commonly known as the transport network—will become a problem. Transport networks have traditionally been covered by wireline standards outside of 3GPP. However, with wireless capability advancements played against the costs of laying fiber to dense small cells, wireless standards are beginning to look more at the transport use cases. In Phase 2 for instance, the concept of joint backhaul and access could be introduced to address these challenges. AT&T is one of main proponents and leaders of the integrated access backhaul study.

For the early deployments of 5G, this means we will most likely see a proprietary backhaul design. There are, however, a number of options that will help solve the backhaul challenge—such as fiber, Ethernet and mmW mesh solutions—but the implementation of these solutions will be vendor and site dependent.

As challenges with backhaul and the core network are addressed, and as 5G NR evolves, 2019 will see it take over as a core technology, assisted by 4G. The close of Phase 2 will see a broader set of 5G use cases begin to emerge and will allow 4G to finally take a back seat as 5G becomes the primary technology.

Following that, we will see 5G products and deployments emerge, but this still won’t be defined as true 5G. This can’t really happen until we see the roll-out of 5G-enabled commercial devices, which are expected to be made available to the general public by mid-2019.

Still some way to go

There’s no doubt that the progress the industry has made towards 5G is exciting, and the technology is certainly moving in the right direction. But it is important to take a step back and think about what to expect in the coming months, and even years. While 5G is in touching distance, we still have some way to go—in fact, it’s likely to be beyond 2019 before we see any kind of meaningful 5G service. In terms of overall adoption, 5G is even further out. Let’s take LTE as an example: despite LTE being rolled out in 2011, it was only in late 2016 that LTE device shipments worldwide outnumbered 3G device shipments.

While the initial phases of deployments are rolling out, we have to address the future challenges; backhaul, for example, may become a significant problem following the infrastructural changes 5G will bring. But it’s important that the industry remains patient and develops the correct, working technology that delivers what it promises. Hosting efforts are another challenge that will need to be addressed. Furthermore, as 5G networks gain momentum, the capacity and latency capability of cloud data centers will need to be tested, and operators may need to think about employing strategic data center planning to meet the end to end latency claimed by the 5G networks.

AT&T is certainly championing its 5G efforts—not only does it have its own aggressive timeline, but it has played an important role in accelerating the NR timeline to December. There’s no denying that the company has great plans for 5G, and, to get ahead, it is making use of the phased deployment options that the industry has put in place. Its initial “5G” offering will rely on LTE-Advanced Pro and, soon after, on the non-standalone NR deployment.

We expect that by early 2019 there will be some commercial devices operating in non-standalone deployment scenarios (in mmW bands). But despite operators best marketing efforts, we simply won’t be seeing the “real” full 5G in 2018.

Wifi industry consolidation as Fon acquires XCellAir

Spanish wifi aggregator Fon has acquired carrier wifi specialist XcellAir from Interdigital to boost its Fontech B2B arm.

XcellAir was launched by telecoms R&D firm InterDigital in 2015 to help operators make the most of wifi and unlicensed spectrum in general in reinforcing their LTE signals. Fontech offers software-based solutions designed to help operators and enterprise manage wifi, so there’s a clear overlap here. On top of that Fon is lauding the geographical benefits of acquiring a US-based team.

Fontech will be incorporating XCellAir’s core product, the cloud-based XCellRAN carrier wifi solution, into its portfolio. It apparently features whizzy tech such as SON and radio resource management that offer carrier-grade control and analytics for wifi.

“We have known XCellAir for a long time and have always been impressed by their product, vision, and team, which are all complementary to Fon,” said Alex Puregger, CEO of Fon. “We are very excited to welcome them to Fon. The acquisition of XCellAir will further boost our technology and product leadership in the area of operator-managed wifi.”

“We are proud to have established XCellAir as a leader in the wifi management and optimization space and, in particular, enabling operators to deliver the best home wifi experience,” said Amit Agarwal, CEO of XcellAir. “The acquisition of XCellAir by Fon enables us to take the business to the next-level, immediately increasing scale and global reach. The entire team is excited to join the Fon family.”

They don’t explicitly say so but the last quote implies Agarwal is hanging around, at least for a bit. If you haven’t tired of generic M&A canned quotes you may derive some pleasure from the video of Puregger explaining the deal below. This move will presumably concern other wifi aggregators such as Devicescape and we wouldn’t rule out further consolidation in this area.


We could see commercial 5G products as soon as next year

After years of probing, posturing and prognosticating the telecoms industry has committed to the first 5G New Radio standard.

At Mobile World Congress earlier this year the decision was unilaterally made, with some dissent, to fork the development of 5G NR into standalone and non-standalone versions. The apparent need for this fork was so that we could get on with the air interface part without having to wait for the core and all the attendant mind-boggling complexity to be finalised.

As a consequence, while much of the 5G core will have to wait until the middle of next year to reach its first standard ‘freeze’ (i.e. the work done so far is set in stone), we have been able to freeze the first standard for just the air interface component of 5G. Because this will still rely on the legacy 4G core it is referred to as non-standalone (NSA – not to be confused with the National Security Agency, or indeed No Strings Attached).

To get a better sense of the significance of this we spoke to Ulises Olvera-Hernandez of InterDigital, who is an active participant in the system architecture group of the 3GPP and has generally been elbows-deep in the 5G standardisation process from the start. “This is a very significant drop for the 5G specification,” he said.

“The physical and control layers are fully developed at this point. This is very significant because the base station and terminal chips can now be made. The radio will be pretty much the same between NSA and SA. The Summer 2018 release will bring the SA radio, which will mean the NSA radio we have just standardized will be able to connect to the new 5G core.”


As has been extensively covered, 5G is about a lot more than just more 4G – i.e. improved data rates. The world also wants 5G to enable massive IoT with technology that combines very low energy use with limitless scalability. And as if that’s not enough we also need 5G to offer the kind of robustness, efficiency and flexibility that will allow utopian use-cases such as autonomous vehicles and robotic surgery.

“This release includes something that is referred to as ‘ultra-reliable, low latency communications’,” said Olvera-Hernandez. “In simple terms this requires a new radio interface that is able to respond much quicker.” He also said the whole IoT aspect has not been covered in this release but will be addressed subsequently.

One other significance of this milestone is how it positions the 3GPP in the overall 5G standard mix. This stuff is ultimately adjudicated by the ITU (International Telecommunications Union) via its IMT2020 group and the deadline is looming. You can see the submission timeline below.

IMT2020 submission timeplan

“This also prepares for the IMT2020 submission,” said Olvera-Hernandez. “3GPP will be one of the radio interface technologies that are proposed and the first submission is due in February 2018. So that is a key aspect of this release.”

But the most immediate and conspicuous consequence of freezing the 5G RAN standard will be the legitimization of the use of 5G by the marketing teams of any company even remotely associated with the telecoms world. They hardly need encouraging, of course, but the 5G spam we have had to endure to date will pale into insignificance compared with the deluge to come.

“Companies will now be able to say they have a 5G radio interface and that their core network is ‘5G ready’,” said Olvera-Hernandez. 5G ready. The phrase alone is enough to make those of us who earn a living by spending an unhealthy about of time banging on about phone stuff shudder in grim anticipation. We will probably see the first 5G ready claims as soon as everyone has got over their New Year hangovers but, more surprisingly, we might even see actual commercial products to back that claim up before the end of the year.

“I believe we will see 5G in the form of NSA in 2018,” said Olvera-Hernandez. “I think that towards the end of next year you will see commercial 5G products, as a year should be sufficient to make this happen. We will see voice carried in a better way in the 5G system than it has been with 4G because there has been a complete re-engineering of the quality-of-service aspects of 4G.”

The decision to go with NSA first seems pretty sensible on one level, but while it has sped up the process by which various telecoms industry stakeholders can legitimately claim to have 5G products and services, it also creates a separate set of complexities. The marketing frenzy is inevitable but it does risk setting unrealistic expectations, which will be exacerbated if the process of reconciling NSA with SA doesn’t go smoothly.

If all this has merely served to whet your appetite for telecoms technicalities you can have yourself a very geeky Christmas by reading this 3GPP brief introduction (!) to the 5G system architecture. On a lighter note we’ll leave you with this photo of the 3GPP architecture working group on the lash, having hit their milestone.

3GPP drinks