Verizon Sues Nextel For Espionage

jonknee writes "Verizon is going after Nextel for a little corporate espionage. Verizon says that Nextel got its hands on some internal prototypes of models aimed to compete with Nextel's Direct Connect technology. Verizon's service is slotted to start up anytime, and a few other carriers are expected to launch similar services."

Comments

Who did it?

[Martigan80]

"...claims Nextel obtained prototypes..."

How did they get them? Was it an upset employee, did they put some one in the work force to steal the prototypes?

So could Nextel be sued for receiving stolen property?

Who?

[Tweakmeister]

This topic isn't talked much about, but I wonder (statistically) who would be calling the shots on doing operations like these. The higher ups? The board?

The Marketing Militia

[sfled]

The suit, filed in U.S. District Court in Virginia, claims Nextel obtained prototypes of Verizon cell phones to "obtain valuable, confidential, and proprietary business information," then share any negative news with industry analysts, according to an account of the suit in The Wall Street Journal.

Either Verizon has a gung-ho marketing department or they're taking a page from the creeps at RIAA (http://news.com.com/2100-1023-981449.html). Either way, now we ALL know that Verizon's coming out with a walkie-talkie.

Verizon Service + Number Portability = Competition

[Richardsonke1]

This looks like it will become a very good service, especially since number portability starts up in a couple months or so. So, everyone on the Nextel network can switch over to verizon, if they have a better/cheaper service. The downside of DirectConnect, though, is that when you have someone trying to explain something to you over the phone, you have to wait until they get done talking, which could take minutes. I've seen people yell at their phone in agrivation of the person not shutting up (even thought the person on the other side could not hear).

who needs direct connect?

[playagame]

i think direct connect is pointless and stupid. calls are getting so cheap and minutes so plentiful that you might as well talk on direct connect. it's not like the police cannot tap the phone on direct connect or anything... :sigh:

Compare the outcome with RIAA "piracy" cases

[swb]

It'll be interesting to compare the outcome of this with RIAA/MPAA inspired "piracy" cases.

In the entertainment media world, ordinary people who engage in "piracy" have perhaps a hundred thousands dollars (at MSRP) worth of music which, even if widely distributed might account for maybe a couple of million dollars in lost gross retail revenue.

In this situation we have executives of a major corporation who are potentially doing hundreds of millions of dollars of damage to their competitors; the scale of business damage exceeds the RIAA-type cases by at least a single order of magnitude and many more if like me you don't buy the inflated damage estimates of the media companies.

So how many Nextel executives will face $500/month penalties for life? How many will face jail time or massive civil penalties of millions of dollars?

My guess is zero, but I can't explain why -- if theft of IP eq damage, why won't the same rules that the recording industries want to apply to you and apply to corporate executives that engage in piracy (and perhaps other more nefarious crimes like breaking and entering, theft, purchase of stolen property)?

Or is this just another double standard where the harsh end of the law applies to you and I, but if you're a corporate guy it doesn't?

push to talk...ummm OK

[Zebbers]

construction companies, trucking firms and others who once used walkie-talkie-like devices to instantly connect to others is thier market. Thats it. Granted its prolly a pretty big chunk of change but theres people acting like it's the next big thing and really its only a walkietalkie replacement.

Still useful to the average consumer? Sure. Itd be like having a walkie talkie with you. Id love to have this service with my phone if I could just push2talk my friends while driving in a caravan or running around the mall or whatnot. I wouldnt pay much extra though.

Re:push to talk...ummm OK

[anicklin]

It's not just a walkie-talkie replacement. You can use them for phone service, web browsing, etc, etc. All in one device, which aside from anything else certainly makes the cancer-critics a little happier. (and me, since I would have to carry more stuff)

By the way, another really heavy user of Nextel service is the government. In my agency, most of the people are field-based and roving, so Nextels are next to invaluable. Not to mention that quite a few people I know have Nextels for personal use, because they've offered reasonably good family plans. Good for field trips, and keeping in touch with your teenager kids - who then use it to keep in touch with each other.

I'll agree that a Nextel is a little more expensive, though. But when you want more services, you do indeed pay for them.

Why do you need this?

[blahbooboo2]

Could someone please tell me why we need basically "walkie-talkie" service on a cell phone? I have a ton of minutes, why would i replace good quality full duplex with this service? Its like text messaging, in the U.S. we get so many minutes nowadays who cares about these other minute saving features anymore?

I HATE direct connect

[ywwg]

I've noticed nextel's service has gotten much more popular recently, and not among the target audience of construction workers and business-types. Everywhere I go people are carrying around their phones like star trek communicators, using this feature.

"Hey how you doing?" -- BEEDEEP!
"Not bad" -- BEEDEEP!
"Are you going to the mall later?" -- BEEDEEP!
"Nah I don't think so" -- BEEDEEP!

As if cell phones weren't bad enough for making people talk very loudly into their phones, nextel has somehow managed to make cell phones more rude by subjecting everyone to both sides of the converstation and adding a loud beeping after every communication!

This feature should die, quickly. It's an ok idea for construction workers, but it just adds to the noise of life for everyone else.

Thats a feature

[bluGill]

I agree, the beeps are annoying in a resteraunt. However two-way is intended to be more public. When the foreman asks the boss a question, all the underlings are likely to need the answer, by using two-way we know how the boss wants it done. (and can tell the foreman he is wrong when he starts doing it wrong)

I met someone who did this.

[abucior]

A number of years ago I ran into a guy who worked for a major telecommunications company. He worked in a department called, if I remember correctly, "Strategic planning". What it amounted to was that he basically led a team of corporate spies. They'd go into a country that was setting up a new phone network from the competition, pay off someone in the local telephone company, and then they'd get to grab some of the competition's latest hardware for an hour or two, disassemble it, take pictures, put it back together and return it. All so they could keep up with what the competition was doing. Eventually they were busted and some of these guys spent time in a foreign jail. I can't vouch for the authenticity of the story, but for what it's worth, I believe him. I expect this sort of stuff happens all the time.

Re:Now this would make sense..

[nelsonal]

In the US cellular market there are 6 or so reasonably large carriers (VZ, Cingular, AT&T, PCS, TMobile, Nextel and AllTel is still pretty regional but just about big enough to be a big player). Verizon and Cingular are the biggest (by subscribers) but Cingular is struggling to hold on to subs, while Verizon adds them at least in proportion to their total share (roughly 30% of both total and new subs). AT&T Nextel and T Mobile all adding subscribers at a higher rate than they have total subs, (TMobile is in the lead getting about a quarter of the new subscribers with only about 10% of total subscribers), but none of them are large enough to survive alone, Nextel could have ekked out a living on their high spending business customers, through things like direct connect, but now that all the other companies are introducing those features, they have some struggles ahead of them. I wouldn't be surprised by some mergers in the next few years, AT&T and cingular would like to combine if the anti-trust authorities would allow it. If T mobile keeps adding subscribers they will allow DeutscheTel to sell it for a handsome price in a year or two, or if the parent feels better about its balance sheet, it could pick up one or two of the smaller majors (or even a long shot on Cingular) and be the second or third competitor. I would be surprised if the regulators allow the market to contract to two companies, but three is pretty likely.