The possible acquisition of Qualcomm by Broadcom is in the news right now - a
potential vote on new members of the Qualcomm Board of Directors has been
delayed a month at the request of CIFUS, the U.S. agency that reviews
acquisitions of U.S. companies by foreign companies.
Last night I watched a report on the Fox New channel that really raised my
eyebrows. The report included statements by U.S. Representative Duncan Hunter
(R San Diego), claiming that the acquisition was a threat to U.S. security, and
would allow China to steal Qualcomms intellectual property related to the
developing 5G mobile standards.
Qualcomm has been running frequent ads on Fox News, essentially attempting to
justify its blatant misbehavior in the licensing of essential patents for the
earlier 3G and 4G standards. The ads suggest that modern telecommunications
could not exist without their technology. There may be a grain of truth in
this, however, the company’s core business is developing and licensing these
technologies.
Participants in these International standards agree to license their technology
on Fair, Reasonable And Non Discriminatory terms (FRAND).
Qualcomm has been investigated for anti trust abuse of its patents in Taiwan,
South Korea and Europe, and there are additional anti trust actions in the U.S.
and other countries. The abuses primarily involve demands for a percentage of
the total price of cellphones, whether they use Qualcomm chips or those of
other manufacturers. In other words, they are holding companies hostage in
licensing agreements rather than offering the licenses on FRAND terms.
If you watched the Fox News report, or read any of the current news reports
accessible online, you will not find a word about the fact that Qualcomm is
facing legal challenges related to its licensing practices. What you hear is
that Qualcomm is in essence a “national treasure,” with critical technology
that must be protected for national security reasons.
Do these “journalists” understand that these telecom standards are created by
contributing the Intellectual Property to the standards in return for the
ability to license these technologies on a FRAND basis?
Rather than being “proprietary technologies” critical to national security, the
intent is to make them widely available to any company that wants to use them
in products, or license them so they can make chips that compete in the global
markets. One of the legal issues being brought against Qualcomm is that it
forces licensees to purchase its Snapdragon chips.
Meanwhile, Broadcom is being vilified since the formerly U.S. based company was
acquired by Singapore based Avago in 2016. Last year the CEO announced at the
White House, that it is relocating its corporate headquarters back to Irvine,
California, where the company operated prior to the 2016 acquisition; the
relocation is expected to be completed by this spring. When this happens, CIFUS
will no longer have any authority to review the potential acquisition of
Qualcomm.
Aside from the CEO, all of Broadcom board members are U.S. citizens; and the
CEO recently became a U.S. citizen.
On an almost daily basis we see stories here that are bought and paid for by
commercial competitors. The thin line between modern global commerce and
politics has nearly vanished. Watching this story on Fox News last night was a
reminder that the news media can easily be bought...
We used to call this advertorials, which were labeled as such. Apparently this
is no longer necessary...
SAD.
Regards
Craig
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