UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C.

In the Matter of
CERTAIN ELECTRONIC DEVICES, INCLUDING MOBILE PHONES AND TABLET COMPUTER, AND
Investigation N<>337-TA-847

COMPONENTS THEREOF

SUBMISSION OF CTIA THE WIRELESS ASSOCIATION REGARDING THE PUBLIC INTEREST

Michael F. Altschul Senior Vice President and General Counsel CTIA-The Wireless Associati0n 1400 16"Street, NW, Suite 600 Washington, DC 20036

November 12, 2013

CTIAThe Wireless Association (CTIA) submits these comments in response to the

Commissions request for comments from the public on the issues of remedy and the public interest in In

the Matter of Certain Electronic Devices, Including Mobile Phones and Tablet Computers, and
Components Thereo Inv. No. 337-TA-847.
To be clear, CTIA has no opinion on the merits of the underlying case. Indeed, both litigants are

CTIA members. However, CTLAsmembership broadly includes carriers, manufacturers, and other

companies with an interest in the wireless industry, and therefore CTIA has a unique perspective on the
substantial public policy issue at stake in this proceeding. An exclusion order in this case threatens to

harm wireless carriers and their customers who are not parties to this case, and is likely to have a material
impact on established consumer expectations. Accordingly, CTIA submits that an exclusion order

directed to HTC Corp.s (HTC) products in this investigation would be contrary to the public interest.

To meet the growing demand for advanced broadband wireless communications services, the
wireless industry is rapidly deploying new technologies and broadly distributing supporting products in

the marketplace to put that technology into the hands of customers and improve the lives of consumers.
An exclusion order in this case would create barriers to the distribution of these products, thereby
signicantly harming wireless carriers and their customers and have a material impact on established

consumer expectations. Because many segments of the public depend on mobile devices for their primary

source of broadband access or Intemet access, the Commission should carefully consider the effect of an
exclusion order on underserved markets and populations.

Consumers use wireless services for enhanced productivity, for basic communication needs, to

conduct commerce, and for greater personal convenience in their lives. The availability of ubiquitous,

seamless wireless coverage also benets public safety by ensuring quick, reliable access to emergency
services. Moreover, many segments of the population depend on mobile devices for connectivity or

lntemet access, heightening the need for maintaining a broad range of consumer choices and the fastest

broadband devices at all price points. As CTIA has urged in prior investigations, should the Commission
issue an exclusion order or a cease and desist order in this investigation, it should provide an appropriate

transition period to help ameliorate the severe burden on consumers and third parties that can result from
such an order. Broadband wireless infrastwcture is a critical U.S. industry that should be protected from

unnecessary harm, and the HTC devices at issue in this investigation are an important part of that
industry.

The Commission Should Give Weight to Executive and Congressional Policy Determinations to Promote WirelessBroadband Infrastructure
Both the Executive Branch and Congress have determined that expansion of high-speed wireless
service is critical to Americas ability to compete globally? For example, President Obama has stated
high-speed wireless service, thats the next train station; its the next offramp. Its how well spark new
innovation, new investment, [and] new jobs.3 In this critical area, the Commission should use its public

interest authority to ensure that harm is not caused to U.S. consumers, competitive conditions in the
economy, and the public health and welfare (19 U.S.C. 1337(d)(1)), by carefully tailoring its remedial

orders or declining to enter any remedial orders at all.

Wireless broadband provides hundreds of thousands of jobs. Even a small change in wireless

network investment could signicantly and negatively affect employment because a large portion of
investment is devoted to expenditures on salaries. By some estimates, even a 2% decline in capital
expenditures on wireless broadband would result in a loss of 3 1,382 jobs. A 10% reduction in

1 See Retrospective Analysis of Existing Rules, Investigation Number Misc-038, letter from Michael Altschul, CTIA The Wireless Association to the Honorable Lisa R. Barton (Oct. 9, 2012). 2See President Barack Obama, State of the Union Address (Jan. 25, 2011); 47 U.S.C. 1305 (2009) (establishing a national broadband expansion program that provide[s] improved access to broadband service to consumers residing in underserved areas of the United States and stimulate[s] the demand for broadband, economic growth, andjob creation). 3President Barack Obama, Remarks by the President on the National Wireless Initiative in Marquette, Michigan (Feb. 10, 2011), available at http://www.whitehouse.gov/the-press-ofce/201 1/02/l0/remarks

president-national-wireless-initiative-marquette-michigan Robert D. Atkinson, The Info. Tech. & Innovation Found., The Economic Impacts of Declining Investment in Broadband, at 2 (Oct. 2009).
2

expenditures would eliminate 156,911jobs.5 Previous Commission opinions have given weight and
strong consideration to the Administrations policy goals, and the Commission should do so again here.6

An Exclusion Order Would Have Profoundly Adverse Effects on Competition in the American Wireless Industry
Any disruption from a11exclusion order in this case will significantly and negatively impact the

wireless industry. In fact, excluding HTCs devices will cause an immediate shortfall in the U.S. market,

as HTC currently accounts for roughly 8% of smartphone sales.7 The mobile device supply chain is

complex and fully saturated, and it would take a substantial amount of time to find altemative suppliers,
test products, and adjust retail strategies. Consumers will suffer from losing the competition that HTC

provides within each wireless carriers product selection.

The Exclusion of HTC Would Negatively Impact the Public Health, Safety, and Welfare
In addition to anticompetitive effects, exclusion of the accused HTC devices raises signicant
public health, safety and welfare concems in the United States. Mobile devices, such as the accused

devices, are used by consumers in the United States to contact law enforcement authorities, re

departments, paramedics and other rst responders to assist in protecting the public health and welfare.

Expanding wireless coverage allows the public to reliably call for assistance even when emergencies
occur in remote locations.

It is beyond dispute that smartphones are essential devices for U.S. consumers today. Indeed, for

segments of the population which depend on mobile devices for their primary source of connectivity or
Intemet access, there is a particular need to maintain consumer choices and the availability of broadband
devices at all price points. For example, many low-income and minority communities use smartphones as

their primary means for accessing the Intemet, including for vital govemment services.8 Disadvantaged

5 Id.

6 Certain Automatic Crankpin Grinders, Commn Op. at 19, USITC Inv. No. 337-TA-60 (1979); Certain Inclined-Field Acceleration Tubes and Components Tliereo Commn Op. at 23, 24, USITC Inv. No. 337-TA-67 (1980). 7c0mSc0re Reports July 2013 U.S.Smartphone Subscriber Market Share (Sep. 6, 2013). 8Kathryn Zickuhr & Aaron Smith, Digital Dierences (Pew Research Center Apr. 13, 2012), available at http://pewintemetorg/Reports/2012/Digital-differences.aspx.
3

minorities disproportionately rely on smartphones for access to the Intemet, and excluding HTCs
products would only further exacerbate the digital divide.9

Everyone benets from the nationwide growth of competitive wireless services. Loss of choices
for wireless devices in the marketplace will hurt all consumers, not just those who wish to purchase the

excluded smartphone. Smartphones are essential end-points to carrier networks, and limiting the
availability of smartphones in the marketplace has a direct impact on the carriers abilities to expand their
networks to meet consumers needs and provide them with the benefits that flow 'om the enormous

capital investment that carriers are making in their networks.

In the Event of an Exclusion Order, Carriers Should Be Given Sufcient Time to Transition to Replacement Devices
Any decrease in the number of available devices may delay additional consumers from adopting

4G technology. The Commission should therefore take into account the signicant potential negative
impact on competitive conditions in the United States and U.S. consumers before issuing or tailoring any

exclusion order. However, if the Commission determines to exclude HTCs products, the Commission

should use its power and exibility to appropriately tailor the remedy so that the start of any exclusion
order is delayed, provide exceptions for repair or replacement devices, and otherwise adopt limitations to

ameliorate the broad consumer harm described above) The Commission has provided a transition period

in prior investigations involving HTCs products, and should follow that precedent here.
The Commission also should carefully specify the precise devices affected by any exclusion or
cease and desist orders. This approach would provide clarity to the industry so that product transition

9See Susan Crawford, Dissolving the Digital Divide, IMPATIENT OPTIMISTS(Mar. 26, 2013),

http://wvvw.impatientoptimists.org/Posts/2013/03/Dissolving-the-Digital-Divide. 10See Certain Systemsfor Detecting and Removing Viruses or Worms, Components Thereof and Products Containing Same, USITC Inv. N0. 337-TA-510, Commn Op. on Remedy, the Public Interest, and Bonding, at 6 (Aug. 23, 2005) (imposing a cease-and-desist order with an exception to allow respondent to provide software updates and service or replace parts for customers). H See Certain Personal Data and Mobile Communication Devices and Related Software, Inv. No. 337 TA-710 (adding four extra months for an exclusion order to go into effect).
4

plans could properly be put in place, and it would implement the Presidents directive for greater clarity

on the scope of ITC relief.

Respectfully submitted,

L@>@Qll47e4(
Michael F. Altschul Senior Vice President and General Counsel CTIA-The Wireless Association
1400 16*Street, NW, Suite 600

Washington, DC 20036 202-736-3248

November 12, 2013

'2 See Executive Action 5, White House Press Release, White House Task Force on High-Tech Patent Issues: Legislative Priorities & Executive Actions (June 4, 2013).
5

UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, D.C.

In the Matter of
CERTAIN ELECTRONIC DEVICES, INCLUDING MOBILE PHONES AND TABLET COMPUTER, AND COMPONENTS THEREOF
Investigation Nv- 337-TA-847

CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing SUBIVHSSION OF CTIA-THE WIRELESS ASSOCIATION REGARDING THE PUBLIC INTEREST was sewed as indicated to the parties listed below, this 12'hday of November, 2013:
Honorable Lisa R. Barton Acting Secretary U.S. Intemational Trade Commission 500 E Street, S.W., Room 112A Washington, D.C. 20436 (Filed via EDIS; Eight Courtesy Copies ViaHand Delivery)

Counselfor Complainants Nokia Corporation, Nokia Inc. and Intellisync Corp.,: Jamie D. Underwood
Scott J. Pivnick Alston & Bird LLP

(ViaElectronic Mail)

The Atlantic Building

950 F. Street, NW Washington, DC 20004 NokiaITC847@alston.com

John M. Desmarais Alan S. Kellman Jason Berrebi

Desmarais LLP
230 Park Avenue

New York, NY 10169 Jdesmarais@desmaraisllp.com, ake]]man@desmarais]lp.c0m, jberrebi@desmaraisl1p.c0m

Counselfor Intervenor GoogleInc. :

Jack Q. Lever Shamita D. Etienne-Cummings Frank Morgan

(ViaElectronic Mail)

White &Case LLP

701 13* Street, NW Washington, DC 20005

Jeannine Yoo Sano

Bijal V. Vakil

White & Case LLP

3000 E1 Camino Real

5 Palo Alto Square, 9"oor Palo Alto, CA 94306

WCG00g]eITC847Team@whitecase.com

Counselfor Respondent H TC Corporation, H TC America, Inca:

Yar R. Chaikovsky, Esq. Terrence P. McMahon, Esq. S. Michael Song, Esq. Hong s. Lin, Esq. Jeremiah A. Armstrong, Esq. Nitin Gambhir Esq.

(ViaElectronic Mail)

McDerm0tt Will & Emery LLP

275 Middlefield Road, Suite 100 Menlo Park, CA 94025

Blair Jacobs, Esq. Christina A. Ondrick Esq. Christopher G. Paulraj, Esq.

McDermott Will & Emery

The McDermott Building 500 North Capitol Street, N.W. Washington, DC 20001 847N0kiaITC-HTC@mwe.com

Michael F. Altschul