Acting on behalf of the Bush Administration, U.S. Trade Representative (USTR) Susan Schwab on Monday upheld the June 7 decision of the U.S. International Trade Commission (ITC ) to ban the importation of wireless handsets that contain Qualcomm chips that infringe upon patents held by Broadcom Corp. Used in thirdgeneration (3G) EV-DO and W-CDMA handsets produced by LG Electronics, Samsung, Motorola and other vendors, cellular baseband chips manufactured by Qualcomm were found by both the ITC and a federal jury to violate handset power conservation patents held by Broadcom. Arguing that the decision could delay the introduction of 3G wireless services in the U.S. and could also jeopardize public safety communications operations, a host of U.S. wireless carriers, including Sprint-Nextel, Verizon Wireless, AT&T and T-Mobile USA, protested the ITC’s action. While acknowledging the “legitimate concerns that certain market participants and others have expressed regarding the potential effects” of the ITC’s order, Schwab said that the USTR decided to uphold the ban after consulting with Department of Homeland Security officials who determined that the prohibition would not pose sufficient public safety risks to justify dismissal of the ITC order. Schwab also noted that Broadcom is offering royalty-free licensing of the patents in question to local government and public safety organizations, adding: “we believe that such licensing agreements and work-arounds will address in large part the concerns raised about the delay in 3G network deployment.” Sprint-Nextel—which is pursing its own appeal of the ITC decision—is expected to be particularly hard hit by the ruling. Verizon, meanwhile, has reached an agreement independently with Broadcom through which Verizon will pay $200 million in licensing fees in exchange for an exemption from the ITC ban. Observing that the Verizon pact “demonstrates that Broadcom is willing to work constructively to resolve intellectual property disputes,” Broadcom senior vice president David Dull said, “we hope today’s [USTR] decision will encourage Qualcomm to resolve this and our other disputes through prompt negotiations.”