Adam Bender

SunRocket’s customer list “has not been sold, nor is such a sale imminent, Sherwood Partners’ Martin Pichinson said Thursday, responding to rumors on the Web. Former SunRocket customers posted on the DSLreports.com forum this week that Vonage had sent them targeted marketing, spurring rumors that Sherwood had sold Vonage names and addresses. Not so, Pichinson said: “Our total focus for the past three weeks has solely been the transition for the SunRocket customers to other service providers.” Vonage declined to comment.

Tangled in a patent lawsuit with Verizon, Vonage posted revenue growth and lower losses in Q2 results reported Thursday. Despite those positives, the VoIp company’s churn suffered from customer anxiety about suits and irritation at customer care quality. The second quarter was a “period of transition” and “one of the most difficult quarters in Vonage’s history,” CEO Jeffrey Citron said in a Q2 call. “Despite the continued challenges associated with the Verizon litigation,” which so far has cost $6 million, Vonage “made significant strides… reducing costs and narrowing [its] losses,” he said.

Qualcomm may only win a court stay on the International Trade Commission ban of its chips if it agrees to post a hefty bond on all imports, an attorney said in an interview. But reaching a settlement with Broadcom might be a better choice, another said. The president Monday declined to veto an ITC order that bans importation of Qualcomm chips said to infringe on Broadcom’s patents (CD Aug 7 p3). But Monday was only the start of a bad week for Qualcomm: Later, a San Diego federal court ruled against the company in a separate patent clash with Broadcom.

A P2P file-sharing capability in future Nokia handsets may overcome carriers’ “protectionist notions” about copyright issues, as consumer demand increases for specific devices and features, said Current Analysis’ Avi Greengart. Meanwhile, the success of Apple’s expensive iPhone may break down carriers’ reluctance to put high-end devices on the consumer market, he said.

Sprint Nextel may decide to buy former affiliate iPCS this year if its appeal of an Illinois court decision doesn’t go its way, a Jeffries analyst said Friday. Sprint and iPCS are locked in litigation about whether Sprint violated its affiliate agreement with iPCS when it merged with Nextel. Sprint had agreed to make iPCS its exclusive wireless provider in its territory, but the Nextel merger put a competitor in iPCS’s market. Sprint said the exclusivity agreement involved only the 1.9 GHz spectrum. Nextel uses 800 MHz. The affiliate took the case to the Cook County Illinois Circuit Court, which ruled in favor of iPCS because the spirit of the agreement gave iPCS complete wireless exclusivity. Sprint appealed the decision, which goes to court in the third quarter. The affiliate has legal standing in Illinois, and should have the stronger argument, said Jeffries’ Jonathan Schildkraut. If the decision looks like it won’t be resolved this year, Sprint will likely buy iPCS, he said. It’s not clear why Sprint already done that, he added, since IPCS is performing well and has much growth opportunity in 2008. And Sprint just completed an acquisition of Northern PCS, another former affiliate (CD Aug 3 p9). “Why would Sprint buy every other affiliate and not this one?” he said, adding that Sprint had already bought up much larger affiliates. “It might be the Nextel guys” who want to keep the fight alive, he added. Sprint didn’t comment.

Verizon will spin off its Telecommunications Relay Services (TRS) division to GoAmerica for $50 million cash and up to an additional $8 million in contingent cash consideration, GoAmerica said Thursday. The move is part of Verizon’s plan to “focus on core broadband and IP services,” a Verizon spokesman said. The deal is expected to close in 120 to 180 days, subject to approval by public utility commissions in California, Tennessee and the District of Columbia, he said. The deal is not subject to a separate financing contingency, GoAmerica said. GoAmerica and Verizon also entered into a transition service agreement under which Verizon will provide support services to GoAmerica during the integration period after closing. Stellar Nordia, a GoAmerica call center contractor, will assume facilities, employee and operational responsibilities for the Verizon’s two primary TRS call centers. Clearlake Capital Group will fund the transaction with $35 million committed equity and $30 million of committed senior debt. In return, Clearlake gets a third seat on the GoAmerica board. Clearlake will also commit an additional $55 million for “investments, acquisitions or combinations” if requested by GoAmerica’s board and approved by Clearlake by Sept. 14. TRS, created by Title IV of the Americans with Disabilities Act, enables speech or hearing impaired individuals to communicate over the phone with a person without such a disability through a communications assistant at a relay center. Verizon’s TRS division includes nationwide IP-based text and video relay services, and contracts to provide text-telephone relay services in California, Tennessee and the District of Columbia. The unit generated $67 million in 2006 revenue, Verizon said.

Qwest earnings shot up, despite stagnant revenue, due to reduced operating expenses and increased data and Internet income, the company said in Q2 results reported Wednesday morning. Exiting CEO Richard Notebaert used Qwest’s Q2 conference call to detail CEO replacement plans, as well as the company’s future selling bundled wireless and video services.

AT&T will launch its first over-the-air music download service in connection with independent music store eMusic, AT&T said Tuesday. For $7.49, AT&T customers get five DRM- free MP3s sent straight to their phone, with duplicates available for PC download. AT&T’s previous music offerings were side-loaded services in which users had to download on a PC and then transfer them to the handset. Pop music lovers will have to look elsewhere for top 40 hits, since eMusic features only independent label music. AT&T doesn’t yet offer over-the-air downloads of major label tunes. But that’s a “good differentiator” from rival carriers, which do not offer indie label music on their own over-the-air download services, an AT&T spokesman said. AT&T’s teaming with eMusic lets the carrier fill a niche market, he said. He declined to comment on whether AT&T is seeking more partnerships, specifically with a Top 40 service, saying “watch this space.” The pricing for eMusic is considerably higher on AT&T’s network than it is on the Web. AT&T customers pay $7.49 per five songs, while eMusic Web customers pay $9.99 for 30. That’s because over-the-air downloads cost more to process, a spokesman said. New network technology might reduce those costs, but the spokesman had no comment on future cost reductions. Like its Internet counterpart, AT&T’s eMusic service gives users DRM- free MP3s playable on all devices. Offering DRM-free tracks is the “right decision, given current trends in the industry,” a spokesman said. The eMusic service will not be available for iPhone users, who must download songs on the PC via iTunes. AT&T customers with the Samsung a717, a727, new versions of the Samsung SYNC and the Nokia N75 will be able to access eMusic, AT&T said. More models will be added in the future, it said.

Law enforcement agencies can listen in on room conversations with a switched-off GSM cellphone using new software-based technology developed by Spy-Phone.com. Phone Dead can be configured in less than 10 seconds and then managed remotely via SMS, Spy-Phone.com said. The converted phone, sitting in the targeted room, will answer calls only from a specified phone number and answer it when the phone is in switched off or “Phone Dead” mode, it said. An agency can send a silent SMS to the converted phone to activate, deactivate or change the pre-defined number without any alert messages on the phone. Calls coming from other numbers are diverted to a pre-recorded message to avoid suspicion. Spy- Phone sells the technology only to law enforcement and runs background checks on prospective buyers to ensure their identity, a spokesman said. Phone Dead is sold worldwide from the Spy-Phone Web site, and orders are “slowly starting to come in,” it said.

Verizon Wireless will pay $2.67 billion in cash and assumed debt for Rural Cellular, it said Monday. The Bell also reported strong Q2 results, bolstered by its FiOS and wireless businesses. And Verizon officials used the company’s quarterly conference call to update investors about FairPoint and the MCI integration, spectrum auction strategy and the iPhone’s effect on the wireless business.