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?

Re:Who did it?

[bwalling]

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?


I believe this product is near its release date, which means that it is probably out in the hands of reps and has been shown to customers. That means that there are a number of the prototypes in a reasonably large number of hands. I'm sure that these phones are demonstrated to customers under NDA. I find it simple to believe that over the course of a number of demonstrations, a few phones can go missing.

Now, if Nextel is aware that this is not a released product, and aware that these are not under any sort of public testing, then they can be found guilty of knowingly possessing 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?

But how

[jeffkjo1]

The article has no details on one point, how did Nextel "improperly obtain" the prototypes. Something tells me that they didn't just walk into Verizon's corporate headquarters and ask, and I doubt they pulled off a Mission Impossible stunt.... so likely, someone inside of Verizon had a small grudge and had already tried calling the BSA.

In which case.... Verizon could probably argue that.... ummm, the phones fell off the back of a truck.

Now this would make sense..

[LloydSeve]

What I don't understand is.. that Verizon,
Sprint PCS and AT&T Wireless are ALL coming out
with versions of Direct Connect for their phones..
all modeled after Nextel's with a few
hundred mile range..

And Nextel is releasing their new Nationwide
version which will allow people to direct connect
with anyone across the entire United States..
so what reason does Nextel have to worry and
spy on Verizon? And why VERIZON of all people?
AT&T is the one with the GLOBAL impact,
not Verizon.

I think this is just a way to impose negative
thoughts onto Nextel so that Verizon will have a
chance of selling their phones with DirectConnect
technology.

But maybe I am wrong, and Nextel got dumb.

Re:Now this would make sense..

[aaarrrgggh]

Talking to Verizon folks, they seem to think that in 5-10 years, it will just be them and AT&T left. They are fairly aggressive at expanding markets... especially since they have a lot of cash around.

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.

Re:Now this would make sense..

[nvrrobx]

Ahh, but Verizon DOES have a global impact!

Ever hear of Vodafone?

To quote Verizon's "About Us" page:

Vodafone is the world's largest mobile operator with over 112.5m proportionate customers worldwide and equity interests in 28 countries and Partner Networks in a further 7 countries.

Re:Now this would make sense..

[DigitalJEM]

I think it's exactly what you said... [i]I think this is just a way to impose negative thoughts onto Nextel so that Verizon will have a chance of selling their phones with DirectConnect technology.[/i] Verizon wants to make Nextel look bad. And they're going to do whatever it takes to do it. They're a bunch of babbies in my eyes.

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.

Can you hear me now?

[blcamp]

What is Verizon whining about this time... other than the fact that Nextel's Direct Connect has been out for... how long? ELEVEN YEARS?

They are suing Nextel because *they* (Verizon) are a tad bit slow in coming to market?

I don't want to hear them now... or anytime.

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).

Something rather suspect -- OSMOSIS

[captainclever]

Nah it's simple, the prototypes arrived in the Nextel offices by osmosis.

There was a low concontration of prototypes in the Nextel office, and a high concontration elsewhere..

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:

Re:who needs direct connect?

[Genjurosan]

Direct Connect is great! Fast to get the person you want, it uses a queuing system to get the persons attention, you have the option of simply starting to talk (much like the god scenario in weird science), and the best thing... No one can interrupt you while you are talking to them! HA! Unfortunately, it's works both ways.

Re:who needs direct connect?

[phillymjs]

i think direct connect is pointless and stupid.

Are you crazy? I work for a consulting firm, and the Nextel phones changed our business when we got them because we were able to communicate much more easily with each other when in the field than we were with ordinary cellphones.

Having what is basically an unlimited-range walkie talkie is great.

~Philly

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?

Re:Compare the outcome with RIAA "piracy" cases

[Surak]

The corporate guys can afford to hire the David Boies and Johnny Cockranes of the attorney world.

You and I can afford to hire the Barney Fifes and Gomer Pyles of the attorney world.

That's the difference, m'friend, that's the difference.

Actually its Sprint PCS

[dankinit]

Actually the article says Sprint PCS, not Verizon's push to talk service is expected to go live soon.

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.

Direct Connect

[harmonica]

Isn't that already a trademark of NeoModus?

Or are file-sharing and telecommunication different enough to justify the same name?

Re:Direct Connect

[LloydSeve]

Looking at the page I don't see any trademark or
copyright information or markings anywhere.

But in any case, it is actually referred to as
Push-To-Talk or PTT, and Direct Connect is how
it is referred to.

Re:Verizon Service + Number Portability = Competit

[Genjurosan]

Sure they could switch over, but they would all have to get NEW phones. IDEN is unique to Nextel phones. I pay a pretty high $70 a month for my nextel phone, but I had 3000+ incoming minutes last month during PEAK usage hours and didn't pay a dime extra. Reason: I have a free-incoming plan with Nextel.

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.

Re:I HATE direct connect

[thedavid]

FWIW...

I've had a nextel for a long while now, and I can tell you 2 things about what you're seeing:
1) This is not the only way that direct connect works - you can turn off the speaker and just use direct connect as if you were using a regular phone
2) The people who do keep the speaker on all the time ( in resturants, movies, etc ) are doing it for 1 reason - status. They think they're ultra-hip and cool cause they have it on.

Me, I keep my i90 on vibrate. If someone DC's me and I'm in public, it just vibrates to let me know someone is trying to dc me. Then, flip it open and talk - odds are you wouldn't be able to tell the difference between that and a regular call unless you looked closely.

Re:Verizon Service + Number Portability = Competit

[erpbridge]

I agree about the one-way Direct Connect problem. Although, if you think about it, a two-way version is also known as a phone (and Nextel's with DC can function as speakerphones with the built in speaker). I still think it would be a nice capability to build in full-duplex into DC functionality as well.

There is one way around the waiting for someone to stop talking that I have found. At least on my I-80, whenever someone is talking to you over Direct Connect, the "Exit" option is still active on screen. If you press that, it forces a disconnect (and gives an annoying beep on the other end, analogous to the "person busy" error.) Then you can talk to them, or do whatever.

What exactly (legally) is being alledged here

[hillct]

Verizon wilreless uses standard cell hardware available for license by many service providers in the U.S. and internationally, so exactly what is being alledged here? Is it that Nextel entered into a contract with the same hardware manufacturer that Verizon was going to use in providing a competing service, or is it that Nextel aquired hardware from such a manufacturer when that hardware was exclusively developed for/licensed to Verizon. The article is vary sketchy about this rather important detail.

--CTH

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)

Can you here me NOW?

[James Littiebrant]

I knew that there was something wrong about that guy!

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.

I work for Nextel

[armyturtle]

I can tell you first hand that Nextel would never do such a thing as this. I finished taking a company required moral ethics class via the net (class has been a requirement for employees for years now) that deals with instances EXACTLY as this one. Sure, an individual employee may have gained unauthorized access at some point, but Nextel would have fired the guy immediately and turned over any information/equipment, etc. to Verizon. There's not a chance in hell they would have used it to gain an advantage. As stated by another /.'er, they have no reason to do this; Their Direct Connect/Walkie Talkie has been perfected over 11 years and it now works from coast to coast (soon to be international as well). So what's the reason for Verizon filing suit? They probably heard a Nextel company executive at some point say that they believe Verizon's PTT like service will not live up to Nextel's. But here's the real reason: http://biz.yahoo.com/bw/030620/205239_1.html You see, on June 20th, Nextel had multiple trademarks approved by the U.S. Patent and Trademark Office. The following trade marks (TM) belong to Nextel: PTT, Push To Talk, Push Power, and Nationwide Walkie Talkie (there may be others I'm not aware of). Now this is a REAL PROBLEM for Verizon who needs to describe their "walkie-talkie" like service somehow. They need a name for it, and a catchy one at that. Nextel had a hell of a time getting consumers to understand what "Direct Connect" is. It wasn't until switching to using the term "Walkie-Talkie" that they found it clicked immediately what the service was. Everyone knows what a walkie-talkie is. So it is my opinion that Verizon filed suit over some bogus claim in retaliation to Nextel having their trademarks approved. If Verizon doesn't find a good name for their product and can't any decent terms to describe it (must sum up the meaning in one to three words to catch people's attention) their service will have an extremely difficult time launching. How are you going to convice consumers they should add another charge/service to their phones if you can't adequately explain what it is/does without calling it a walkie talkie, ptt or push to talk service?

Nextel's Operative

[Kursh Run]

NEXTEL MEMO
After a cunning infiltration into Verizon's headquarters, agent 008 was revealed. All knowledge of 008 shall be disemboweled. The following log details the situation.

Location: TOP SECRET VERIZON MEETING
-------------
008: "BEEDEEP!"
Verizon Officials: ?blah blah blah secret secret blah?
008: "DEEP DEEP BEEP"
008: "BEEDEEP"
Verizon Officials: "You hear something?"
008: "DEP DEEP"."
-------------

I N T E R O P E R A B I L I T Y

[The Cisco Kid]

If you have a cellphone (from any vendor, with any service provider) you can call any other wired or wireless phone, by dialing its number.

What would be really nice (and which we certainly arent going to see anytime soon) is if the 'direct connect' feature worked that way too - if you werent restricted to talking only to other people with the same type of phone/service.

Re:I N T E R O P E R A B I L I T Y

[armyturtle]

Direct Connect is NOT a two way radio. It works nothing like a two way radio. It only appears to work that way to the end user. Please don't state things you have no clue about. Direct Connect is a packet data communication that uses 6:1 interleving onto the network. Regular interconnect calls (phone calls) use 3:1 interleving and are as a result a much higher voice quality. Because Direct Connect (or Walkie Talkie) uses 6:1 interleving and is a half-duplex like connection it uses little to no network resources. The result is instantaneous conversation/connection with a very low cost without bogging the network down and thus allowing regular interconnect calls to go through without a hitch. For reference, anything wireless (data) you do on your Nextel phone is using 12:1 interleving. Sometime this year Nextel is releasing 6:1 interleving interconnect (normal phone) abilities. Even though it's 6:1 there will be no loss of voice quality due to a new vocoder chip (new algorithm) in the newer Nextel phones. The result of this is Nextel will instantaneously double its network capacity. So no, Direct Connect (PTT) is NOT like a two way radio. It still goes over the network as if it were a normal phone call, it's just interleaved onto the T1 frame at a much lower rate. For those of you who don't know what I'm talking about in the term interleaving... it's refering to how and when and on what frames within the T1 the data is placed on. A Direct Connect (PTT) call gets chopped up into data packets and is placed on the T1 every 6th frame. Regular interconnect calls are placed on the T1 every 3rd frame (soon to be every 6th with no loss of quality) and data services (Packet Data, aka: PCH) is placed on the T1 every 12th frame.

Re:Prior Art : PTT

[DigitalJEM]

I think everyone is using the wrong term, including the media. They gained a SERVICE MARK (SM) not a TradeMark (TM). Service Marks are used to describe a service that a provider offers. This would make it impossible for other cellular companies to use the terms they registered. It would not make it illegal for ham radios, cb's, two way radios (truned or FRS), etc etc etc to use the term as they are not in the same "business" as a cellular provider is. It only entails to competition. And I feel that Nextel only got the registration so that they could keep the other cellular companies from using "their" terms. I hardly doubt they would go after the other people that use it as that would just raise one massive uproar and a whole heap of *blah*..