Adam Bender

Leap Wireless subsidiary Cricket agreed to pay $30 million for Hargray Communication’s wireless business, it said Wednesday. Cricket will acquire Hargray Wireless, including its 15 MHz spectrum license, wireless network and “the majority” of its customer base. Hargray’s wireline and wireless bundled customers will remain with Hargray but receive Cricket service under a wholesale arrangement to be made once the parties close the acquisition, Cricket said. Cricket will bring service to Savannah, Ga., and Hilton Head, S.C. The market additions “complement our newly launched Charleston, S.C., market as well as our existing Carolinas cluster,” said Cricket CEO Doug Hutcheson. Cricket expects the deal to close the first half of 2008, subject to FCC and other approvals, it said. The acquisition furthers Leap’s overall “cluster strategy,” said Current Analysis’ William Ho. “The most recent example can be seen in the North Carolina coverage area where Leap linked… Charlotte, Greensboro and Raleigh, thereby minimizing roaming,” he said. The Hargray integration should “play out similarly, as Savannah and Hilton Head are all coastal and adjacent.” Network integration should be easy since Leap and Hargray are both CDMA carriers, he added.

Vonage filed Monday a counterclaim against AT&T in the companies’ intellectual property case, according to the docket in the U.S. District Court for Western Wisconsin. The VoIP company also filed a motion to transfer the case to the U.S. District Court for New Jersey. But the documents weren’t available right away Wednesday. AT&T sued Vonage alleging infringement of a VoIP patent in October (CD Oct 23 p3). But last month, Vonage said the parties were nearing a $39 million settlement (CD Nov 9 p6). If the AT&T-Vonage settlement is final, the counterclaim and transfer motion could be “residue from pre-existing legislation” that is “somehow appearing late and won’t have an effect at this point,” said Stifel Nicolaus analyst Rebecca Arbogast. But Vonage’s actions could also suggest the settlement isn’t final, in which case the filings are “standard operating procedure” and represent a “very reasonable next step,” she said. Spokesmen for Vonage and AT&T declined to comment.

A Protus news release claiming victory in a patent suit brought by J2 Global Communications’ Catch Curve is “misleading” and contains “incorrect” statements, J2 General Counsel Jeffrey Adelman said in an interview Wednesday. On Nov. 13, the U.S. District Court for the Central District of California dismissed the case “with prejudice,” blocking Catch Curve from reasserting patents against Protus. In Protus’ statement Wednesday, the Canadian Internet fax company said the court threw out the case after holding in a May Markman hearing that the Catch Curve patents didn’t apply to Protus’ MyFax and Virtual Fax services. But that’s not how it happened, Adelman said. “Protus did not ‘win’ anything and the court did not rule on anything that resulted in the ultimate dismissal,” he said. Protus’ account of the Markman hearing is “incorrect,” the general counsel said. “Instead, after years of litigation, Protus finally disclosed that certain of its operations were based outside of the United States. Based on that… disclosure and given the nature of the particular patent claims at issue in the U.S. Catch Curve case in light of limitations of U.S. patent law, the case was voluntarily dismissed.” That result “does not change anything either with regard to J2’s or Catch Curve’s position with respect to Protus or with respect to the ongoing Catch Curve licensing program,” Adelman said. Asked for comment, Protus stood by its news release. “We maintain that the Markman hearing results were completely in our favor and these patents do not apply to the MyFax services. The fact that the case was dismissed was a clear win for Protus,” a spokeswoman said. Protus wouldn’t say why it issued the release a month after the court order. “There was no time disclosure requirement attached to the release,” the spokeswoman said. J2 and Catch Curve have several other lawsuits against Protus in the U.S. and Canada. In Canada, Catch Curve has a patent suit covering “the sales that were also the subject of the U.S. case,” Adelman said. And J2 has suits “on a number of different patents against Protus in both Canadian and U.S. courts,” as well as a “significant junk fax case against Protus in the U.S.,” he said.

AT&T will pursue Long Term Evolution (LTE) technology for its next-generation network, relegating WiMAX to “niche” markets, officials said at the Bell’s Investor Day in San Antonio. In the meantime, AT&T aims to “move away from old telco categories” and focus on mobility and Internet Protocol (IP) communications, said CEO Randall Stephenson. IP “makes converged [wired and wireless] services possible” and “is where this industry’s headed,” he said.

AT&T will start to “emphasize” an existing open handset rule more when training salespeople, a spokesman said. However, allowing non-AT&T GSM phones onto the AT&T network is a policy the carrier has had “for years,” he said in response to a USA Today article about the AT&T’s open handset practice. AT&T has long offered an option to register GSM phones that run on the 850 or 1900 MHz bands, including T- Mobile and European carriers’ handsets, he said. AT&T customers are also able to take their phones to other networks; if the customer fulfilled contract obligations, AT&T will unlock the handset, he said. The spokesman declined to “speculate” on whether AT&T’s promotion of the policy would extend beyond employee training. He also wouldn’t say whether Verizon’s “any app, any device” announcement last week (CD Nov 28 p2) was an impetus for AT&T. Frontline Wireless took credit for AT&T’s move to build awareness. “This is a big win for our policy argument, and it is a reaction to what Frontline has championed on open access,” it said Thursday.

Verizon Wireless told Wall Street Wednesday that it will take part in the 700 MHz auction set to start Jan. 24. Speaking to the UBS annual conference, Denny Strigl, Verizon Wireless chief operating officer, confirmed the carrier’s participation but declined further comment. “Because of FCC anti-collusion rules, I can’t provide any commentary beyond what I've just told you,” Strigl said. MetroPCS also confirmed its participation at the UBS Conference. MetroPCS Chief Financial Officer Braxton Carter also declined to elaborate, citing the “extreme” anti-collusion restrictions. Clearwire, which is building out a WiMAX system, won’t bid, it said in a filing to the Securities and Exchange Commission. T-Mobile USA and EchoStar are still silent on participation. EchoStar’s stock took a hit after Wachovia cited a news report saying the direct broadcast satellite services provider was participating. “Speculation of an AT&T-EchoStar deal could be significantly diminished if EchoStar filed for the auction,” David Barden of Bank of America Equity Research wrote Wednesday. “While we continue to believe that AT&T has little interest in buying EchoStar, particularly at current levels, speculation would likely be resurrected if the company did not file.”

AT&T continued its wireless network expansion, revealing this week an asset swap with Verizon Wireless to meet Dobson divestiture requirements, and acquisition of regional carrier Edge Wireless to expand its GSM network in the Pacific Northwest. AT&T is hungry to grow its network so it can gain a competitive edge marketing against rivals, analysts said.

AT&T will exit the “shrinking” payphone business by the end of 2008, it said Monday. “AT&T’s Public Communications unit has continued to experience significant pressure from reduced payphone usage, primarily as a result of the growth of alternative communications choices, such as wireless phones and personal communication devices,” it said. “This is the right time for us to take this step on behalf of our customers, employees and stockholders,” said AT&T’s David Huntley, Customer Information Services senior vice president. “We expect that independent providers will pick up much of this business, and, as we exit the business, we will be able to refocus our resources to areas that offer stronger growth potential and greater opportunity for the company.”

Cellphone service “seems to stubbornly resist improvement,” said an article in the January Consumer Reports. The magazine surveyed 47,000 readers in 20 “major metropolitan areas” across the U.S. Fewer than half said they were “completely or very satisfied” with service, it said. Mandatory contract extensions for account changes and high service cost were the top complaints, it said. Most respondents who switched service the past three years said the reason was poor service, it said. Alltel and Verizon got “high marks for connectivity, while T-Mobile had “relatively high satisfaction scores.” Meanwhile, AT&T subscribers cited “gaps in service and static” and Sprint users noted “dropped calls,” the article said. Respondents gave Alltel, T-Mobile and Verizon top rankings for customer service. But only about 40 percent of their customers said the carriers were “very helpful,” it said. The survey is “at odds” with AT&T testing and research, said an AT&T spokesman. The market deals with consumer complaints, a CTIA spokesman told us. The industry is “one that has always changed and evolved in direction of what consumers want and need,” he said. The market will bring “quicker, more efficient” changes than any government mandate could, he added, citing Verizon’s announcement that it would open its network, as well as other carrier announcements to pro-rate early termination fees and kill contract extensions for consumers who make account changes. There’s little difference in service between AT&T and other carriers in most major markets, an AT&T spokesman said, citing data from Telephia, an independent testing firm that works with AT&T. But AT&T “continues to build out” its network and improve coverage, he said. A better indicator of service quality is turnover, he added, saying AT&T had 1.3 percent churn third quarter. Sprint has made “substantial” customer experience improvements over the past few months, and the company continues to do so, a Sprint spokeswoman said, noting announcements that Sprint would in 2008 prorate its termination fees and no longer require contract extensions on rate plans. “While disappointed with the results, we do feel we are addressing some of the wireless customers’ biggest concerns as expressed by the survey.” The Consumer Reports call-quality ratings are “based on customer perceptions, which can be influenced by a lot of things,” she added. “Our own internal measures show that we've made significant improvements regarding the incidence of dropped calls or blocked calls and that the CDMA network is performing at its best-ever level… Since the merger with Nextel in 2005, we've invested billions of dollars to enhance our networks, increase coverage and capacity.” Sprint added almost 3,500 new cell sites across its CDMA and iDEN networks in the first three quarters of this year, she added. Alltel, T-Mobile and Verizon didn’t return requests for comment right away.

Google’s entry into the upcoming 700 MHz auction is more about maintaining political leverage than getting spectrum, analysts told Communications Daily. Operating a mobile network doesn’t mesh with the Internet search giant’s core business and would be a costly proposition even for Google, they said. “Given all its lobbying,” however, Google was “obligated to make a bid equal to at least the reserve price” needed to keep the C-block open-platform rules in place, said Stanford Group’s Michael Nelson.