EuroWire – January 2008
34
Transat lant ic Cable
Telecommunications
Europe activates its inquiry into
Qualcomm royalty fees
After two years of apparent inactivity on the case, the European
Commission on 1
st
October, revived its anti-trust investigation of
Qualcomm (San Diego, California), assigning priority status to
it. In October 2005, six telecommunications companies accused
Qualcomm of anti-trust violations in the licensing of its mobile
phone technology. Qualcomm makes chips for cellphones and
charges royalties to handset makers and chip makers that use
technology covered by its patents.
The petitioners – Broadcom and Texas Instruments (both US),
Ericsson (Swedish), NEC and Panasonic Mobile Communications
(both Japanese), and Nokia (Finnish) – claimed that Qualcomm’s
royalty fees for next-generation mobile phone chips were
excessive and an infraction of agreements to keep fees at
reasonable levels.
The EC said in Brussels that its in-depth investigation would
focus on whether or not the licensing terms and royalties
imposed by Qualcomm are ‘fair, reasonable, and nondiscrimi-
natory.’ The move must not be taken to mean that it has proof
of an infringement, the EC cautioned. But, fresh from its victory
over Microsoft in September, the regulatory commission gave a
strong impression of an agency in fighting trim.
As noted by Dow Jones (2
nd
October), if the commission does find
against Qualcomm, it could fine the company as much as 10% of
annual revenue and force it to change its licensing practices.
Europe and America inch closer on
international standards of accountancy
International accounting standards are gaining acceptance
in many countries and the US is considering adopting them
beginning in early 2009. Meanwhile, on 18
th
October, the body
that governs the International Accounting Standards Board
appointed a new chairman: Gerrit Zalm, who served as finance
minister of the Netherlands from 1994 to 2002. Mr Zalm took
office at the board, an independent accounting standard-setter
based in London, as of the New Year.
Backers of the standards board say they believe that it must
be – and must be seen to be – an independent body that
sets standards based on principles, not through a consensus
of interested parties. That was the view of Paul A Volcker,
a former chairman of the US Federal Reserve, who was the first
chairman of the International Accounting Standards Committee
Foundation.
When Mr Volcker stepped down in 2005, the trustees of the
foundation, which appoints members of the standards board and
raises money for its operations, began a search for a chairman
with a similar mind-set who was moreover known and respected
by European governments. Two interim chairmen filled the post
between Messrs Volcker and Zalm.
An early challenge for the new standards chief will be the
insistence of some governments on exceptions to the
international accounting standards that they accept in broad
outline. Acting at the request of French banks, the European
Commission decided that European companies could ignore a
section of one standard, dealing with derivatives. The EC charged
the standards board with working out a compromise that would
satisfy the banks. No compromise emerged from several rounds
of talks.
Academia
Foreign students at American colleges
and universities contribute heavily
to the US economy
According to a new report published on 13
th
November by the
Institute of International Education (IIE), foreign students in
their growing numbers in the US are becoming an increasingly
important economic force in the host country.
The report found that, in the 2006-2007 academic year, the net
contribution to the US economy of international students at
American colleges and universities was nearly $14.5 billion – up
a billion dollars from the previous year and the largest annual
increase to date.
Writing in the
New York Times
(‘Study: Foreign Students Added to
Economy,’ 12
th
November), Tamar Lewin noted these highlights of
the report
Open Doors 2007,
which was largely financed by the
US Department of State:
The number of foreign students in American institutions
of higher education, from community college to graduate
school, increased 3% over the previous (2005-2006) school
year, to 582,984. This followed three years of decline, and
brought the total back to almost exactly the number of
students who came to the United States for the 2001-2002
year, just before the 9/11 attacks;
Those enrolling in the United States for the first time surged
10% in 2006, a statistic considered important because those
students are likely to study in the US for several years;
Overall, foreign students spent more than $20 billion in
2006-2007, about half on tuition and fees and half on living
expenses. An estimated $14.5 billion came from the students’
home countries, mostly from personal and family sources.
Fewer than one-third got their primary financing from US
sources;
The Institute of International Education is a non-profit
organisation, based in New York, for the promotion of
international study. Allan E Goodman, the IIE president, told
Ms Lewin that students from overseas are a ‘huge factor’ in
many American cities. For New York, where
EuroWire
has its
US headquarters, Dr Goodman construed the importance of
the visiting students in sports terms: “They contribute about
$1.5 billion [to the city], more than the Yankees, the Mets, the
Rangers, the Knicks, and the Giants combined.”
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