Bush administration upholds phone ban

 

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The decision, announced after markets closed, was widely anticipated by investors and analysts. Qualcomm shares rose $1.01, or 2.5%, to $41.78 in regular trading, then surrendered 28 cents after hours. Broadcom's shares climbed 48 cents, or 1.5%, to close at $33.44, then added 31 cents after hours.

Qualcomm, based in San Diego, is the world's second-largest chip supplier for mobile phones after Texas Instruments, but earns much of its money from licensing fees on its patented technology. Broadcom, based in Irvine, is a newcomer to the cellphone business but has scored several legal victories against Qualcomm this year.

The impasse resembles a long-running patent dispute involving the maker of the BlackBerry e-mail device that ended in March 2006 when manufacturer Research In Motion agreed to pay a $612.5 million settlement to NTP. Uncertainty about the outcome had left BlackBerry customers wondering whether they would experiences brief outages or even a shutdown.

Qualcomm has warned of far-reaching harm to consumers who may be unable to buy the newest phones. It commissioned a study that estimated the cost to consumers and the wireless industry at between $4.3 billion and $21.1 billion, depending on the length of the ban. The study was done before Verizon Wireless ducked the ban.

Broadcom officials say the ban's impact would be limited.