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Chipmaker Broadcom has struck a licensing deal with Verizon Wireless that would enable the wireless carrier to sell 3G mobile phones with chips from Qualcomm that are subject to a federal government ban.

By Rhonda Ascierto

Last month, the US International Trade Commission banned the sale or import of phones powered by 3G chips from Qualcomm because it ruled those chips allegedly infringed on patents from Broadcom. Current model phones are not affected by the ruling.

But Verizon Wireless yesterday said it would pay Broadcom $6 for each contested handset, up to $40m a quarter and with a maximum total payment of $200m. The carrier also said it would no longer pursue its efforts to have the ITC overturn its ban, per its agreement with Broadcom.

Initially, Qualcomm and Verizon Wireless separately said they would seek a presidential veto on the ITC ruling.

Our View

This about-face move my Verizon Wireless can only be good for the industry. The ITC ban, which goes into effect early next month, was expected to prevent the launch of new phones for the important holiday season. Verizon Wireless was one of the carriers that would have otherwise been hurt most by the ITC’s actions because of its reliance on Qualcomm chips.