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Business
Situation:
MCI planned
to enter the wireless market by building a nationwide GSM network, which
would have been the largest in the world. Instead, Burt Roberts, MCI
CEO, was persuaded to purchase a share of Nextel, which at the time was
a startup, using a then-unknown Motorola proprietary air interface
protocol called iDEN. The proposal was to buy 2.5% of the company for
$1.3B, implicitly valuing the company at $52B.
I was tasked
to evaluate the proposed investment.
Approach:
Performed a
review of the iDEN technology, including excessive voice channel delay,
poor voice quality, capacity, and coverage. Met with Motorola’s iDEN
team to discuss technical issues. Performed drive testing on Motorola’s
demonstration network in Los Angeles. Prepared business case scenarios
comparing iDEN and GSM.
Project
Outcome:
My team and I
concluded that the iDEN technology had serious, potentially fatal,
flaws; that Motorola was not interested in fixing these flaws; that the
technical and business risks were unacceptable; and that the valuation
of Nextel implied by the proposed acquisition was greatly inflated.
Business
Outcome:
After
reporting to senior management on our findings, MCI cancelled its plans
to invest in Nextel, and instead entered the market as an MVNO – mobile
virtual network operator – reselling re-branded services offered by
existing cellular carriers.
Motorola’s
intransigence regarding fixing the iDEN technologies’ fatal flaws was
finally broken by Craig McCaw, who invested in Nextel with the
understanding that the flaws would be fixed. They were fixed, and
Nextel went on to become a part of Sprint Nextel, contributing about
$10B in revenues to the overall $41 B company.
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Business
Situation:
AT&T, then a
monopoly in most areas, announced that it would enter the cellular
mobile telephone market using an inefficient analog technology called
AMPS – Advanced [sic] Mobile Phone System. I was tasked to compare
analog vs. FDMA. TDMA and CDMA to determine which technology made the
most efficient use of the available spectrum.
Approach:
Performed
mathematical analysis and constructed computer-simulated networks using
each technology.
Technical
Outcome:
Concluded
that CDMA was the most efficient technology provided that it was
equipped with effective power control.
Business
Outcome:
Awarded two
US Patents on CDMA cellular systems. Published numerous papers that
turned out to be highly controversial. Eventually sold rights to the
patents for a confidential sum.
The concept
was picked up by Drs. Irwin Jacobs and Andrew Viterbi, who founded a
company called Qualcomm. In the mid 90s the service was launched and
has become a global industry worth $billions.
When the GSM
standards body deliberated on third-generation digital phones, it also
chose CDMA as its technology base. By the end of the decade more than
85% of the world’s cellphones will be CDMA.
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Business
Situation:
A
Westminster, Colorado startup company called TensorComm was developing
an interference-cancellation technology for cellular and other mobile
systems. TensorComm was working with venture capital firms Sequel
Venture Partners (Boulder, CO) and iSherpa Capital (Greenwood Village,
CO) to secure its next round of funding. The venture firms wanted to
know if TensorComm’s intellectual property was well-protected by its
portfolio of US and foreign patents.
The venture
firms knew that as an expert witness, I was familiar with the security
and validity of patent claims, and how potential infringers try to
invalidate claims and/or prove non-infringement. They asked me to look
at TensorComm’s IP portfolio.
Approach:
The quality
of a patent is determined primarily by three factors:
·
Novelty: The patent must disclose inventions that have not existed
before (prior art)
·
Non-Obviousness: The patent’s claims should not be obvious to one
skilled in the art, for example by combining two existing inventions.
·
Enablement: The patent must describe the invention in sufficient detail
so that one skilled in the art can create it without excessive research
and development.
The entire
portfolio must be examined for each quality factor.
Investigation:
·
Novelty: Searched US and foreign patent databases as well as the
technical literature for prior art that could invalidate one or more
claims.
·
Non-Obviousness: Searched the same sources for inventions that when
combined produce one or more of the patent claims.
·
Enablement: Read each patent specification (the main descriptive body
of the document) to determine if each claim can be implemented as
described.
·
Conclusion: Each and every claim in each portfolio patent was novel,
was not obvious and was adequately enabled by the specification.
I reported
these findings to the VCs.
Business
Outcome:
TensorComm
received $7m in financing from Centennial Ventures, Access Venture
Partners, Crawley Ventures, and iSherpa Capital among others.
TensorComm’s
portfolio now exceeds 75 patents.
In the press,
FierceWireless named TensorComm as one of its "Fierce 15" wireless
companies of 2007
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Business
Situation:
Broadcom
designs and makes integrated circuits for wireless products, chiefly GSM
handsets. Broadcom desires to also make CDMA integrated circuits so
that it can grow. Qualcomm’s 6,500-patent portfolio gives it a
commanding position over other manufacturers, and Qualcomm derives 35%
of its operating income from licenses and royalties.
Broadcom
seeks to improve its bargaining position with respect to licensing
Qualcomm’s technology. One strategy has been the filing of various
lawsuits alleging infringement as well as filing a complaint with the
International Trade Commission asking for a ban on Qualcomm importing
chips and phones fabricated in Asia.
Approach:
I was
retained as an Expert Witness by one of Broadcom’s law firms to provide
testimony regarding the validity of its patents and the infringement of
those patents by Qualcomm.
Results:
I examined
the patents and other documents and concluded that Broadcom’s patents
were valid and were being infringed by Qualcomm. I testified to that
effect at the ITC and was cross-examined for some eight hours by
Qualcomm’s attorneys.
The ITC found
for Broadcom and enjoined Qualcomm against importing chips and phones
using Broadcom’s patented technology.
Business
Outcome:
The impact to
Qualcomm of the ITC ruling has been serious, since it involves imports
worth $billions. Its proposed “work-around” to avoid infringement is
also being challenged by Broadcom.
ITC investigation no. 337-TA-543
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Business
Situation:
Formus
Communications, Inc was formed in Denver with a view to acquiring LMDS
(i.e. 28GHz) spectrum in the US and overseas. The US spectrum was
acquired at auction and sold shortly thereafter with a profit of $400m.
Formus also wished to acquire spectrum outside the US.
Solution
Approach:
Depending on
the country, spectrum can be licensed on a first-come, first-served
basis; for a fee; as a result of a competitive bid process; or at
auction.
Outcome:
Formus used
all of the above techniques to acquire spectrum in various countries. I
participated in “road show” meetings to raise $450m capital; delivered
technical seminars to the staffs of several communications ministries;
managed the creation of bid documents in the case of competitive
bidding; and planned and installed networks in several of the countries.
Business
Outcome:
Formus
acquired spectrum in 14 European countries with population coverage of
about 200m. Before the “Telecom bubble” burst the company had been
valued at around $1B, without breaking even.
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Business
Situation:
Motorola had
sold an iDEN network to an operator in China. Generally RF coverage
design either is done by the vendor, or by a third party RF planning
company such as MSI or LCC. In this case the task was taken on by the
Beijing Railway University.
Motorola was
concerned that the University design, having been done by an
inexperienced team without computer assistance, would be flawed. The
problem: how to effect a re-design while allowing the University people
to save face.
Approach:
I was engaged
as a “diplomatic third party engineer” to travel to China, meet with all
parties and propose an acceptable solution.
Technical
Remedy:
Without
critiquing the University design, I demonstrated the use of the MSI RF
computer planning tool and suggested they check their “pencil and paper”
design against it.
I also
persuaded Motorola to pay for a copy of the software and provide it free
to the University.
Business
Outcome:
Motorola made
its $200m sale and deployed a properly designed system to the
satisfaction of the local operator.
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Business
Situation:
Pfizer Animal
Health desired to enter the nascent market of pet tracking – a service
that would allow an owner to find a “missing” pet. Having no wireless
expertise on staff, Pfizer hired me to do a preliminary design using
off-the-shelf components, and to estimate the cost and physical size of
the product.
Approach:
Conducted
extensive research into available products: cellphone board, GPS and
Bluetooth components, batteries and packaging.
Technical
Solution:
Selected
candidate components based on size, battery drain, performance, and
cost. Put together a sample package (on paper) to demonstrate the size
and form factor; estimated battery life; contracted to create sample
moldings of the packages to show Pfizer.
Interviewed
several industrial design firms at Pfizer headquarters (NY) and made
recommendations on the best company to do the design.
Business
Outcome:
Rather than
go through the pain and risk of developing a completely unfamiliar
product, I counseled Pfizer to acquire GlobalPetFinder, a startup
company that had already fielded a similar product and that had a strong
patent portfolio in the area. The acquisition was accomplished in a few
months for an undisclosed sum.
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Business
Situation:
In the early
90s the FCC was proposing to award spectrum licenses in the 1.9GHz
region for “personal communications services” (PCS) However, in a break
from past practice, the FCC declined to specify what service should be
offered and what technology should be used to deliver it.
As a result
dozens of technology contenders clamored for market attention by
claiming the superiority of their approach. Each technology had been
demonstrated, but in different locales and under different
circumstances.
As Director
of Wireless R&D at U S WEST Advanced Technologies, I was assigned the
task of finding a way to compare these candidates on an apples-to-apples
basis.
Solution:
The
“apples-to-apples” requirement suggested the use of the same
geographical area and cell layout for each technology. This suggested
the use of a “test bed” in which each base station consisted of an empty
box furnished with wired interconnect and power, into which each vendor
could install its candidate equipment.
The network
would then be subjected to a standard battery of tests to determine its
performance, and by agreement these results would be published for all
to see.
Business
Outcome:
The
conclusion was that CDMA was the obvious choice, and U S WEST’s New
Vector division – operator of U S WEST’s cellphone service – chose to
use CDMA for its digital network. Eventually there were deployments of
CDMA cellular technology throughout the US and in many other countries.
The service
generates $billions worldwide and with the adoption of CDMA for third
generation systems globally, some 85% of the estimated $600B market will
be CDMA by the end of the decade.
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Business
Situation:
Among radio
engineers it is well known that the earth’s atmosphere is a strong
absorber of radio energy in the region of 60GHz. This is due to the
resonant frequency of the oxygen molecule.
The US Air
Force wished to use this frequency for battlegroup air-to-air digital
voice communication. The thinking was that due to the strong
atmospheric absorption the close-range link could be neither intercepted
nor jammed from the ground or from distant aircraft.
The main
problem was that due to the short range and the high velocity of the
aircraft, Doppler shift would move the signal out of its passband. It
was therefore imperative to track the signal as its frequency changed,
and to do so fast enough to avoid losing track.
Technical
Remedy:
My approach
was to use a Fast Fourier Transform chip to track the signal
incrementally. The same device could also be used to demodulate a
frequency-shift-keyed signal.
Business
Outcome:
The air force
awarded Litton a $200m contract to deliver hundreds of the modems for
use in fighter aircraft.
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Business
Situation:
A Golden,
Colorado startup, Superconducting Core Technologies, had been sustaining
itself with small Government contracts and wished to move into a market
with a more expansive scale. They hired me as a consultant to suggest
target markets for commercialization.
Solution
Approach:
After
considering several alternatives I suggested that SCT target the
cellular base station market. Because base stations usually have
antennas separated from receivers by at least the height of the tower,
the receivers are notoriously noisy and insensitive. By installing a
superconducting filter and amplifier at the masthead, the uplink system
performance could potentially be improved between twofold and tenfold.
Technical
Remedy:
SCT designed
and built several prototype units and demonstrated them at trade shows
and in actual commercial networks.
Business
Outcome:
SCT was
acquired by ISCO International, a $10M “boutique” supplier of
superconducting cellular products.
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Business
Situation:
Ball
Aerospace spun out a new division, Ball Wireless, to commercialize its
considerable expertise in antenna design. However, the new division
lacked a strategic direction for its products. They invited me to spend
a day brainstorming possible alternatives.
Approach:
I gave a
brief presentation to Ball Wireless personnel including top management,
and then we spent the rest of the day brainstorming how Ball would
differentiate itself from the large number of antenna suppliers already
in the market.
The general
agreement by the end of the meeting was that low-margin “me too”
products would get the new division nowhere. What was needed was a set
of innovative products that addressed specific needs that arise in the
field; for example, antennas with dynamically steerable main lobes and
nulls to improve signal to interference ratio. Ball had the expertise
to develop such products quickly and cheaply.
Business
Outcome:
Ball Wireless
decided to ignore my “high road” recommendation of innovative products
and to take the “low road” of me-too offerings. The parent company
closed the division’s doors after a few months.
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