56K modem inventor wants his due

While 56K bit/sec modems have been on the market since 1997, the wrangling continues over who deserves credit – and royalties – for the technology.

Analog Devices, which makes modem chipsets, last week settled out of court for an undisclosed amount with Brent Townshend, who holds five patents on the 56K modem technology. He says the company owed him back license fees and says it agreed to pay the fees on future modem chips.

This is the latest round of sparring that has gone on since Townshend announced in 1997 he found a way boost to download speed by 66% over the performance of the then-fastest modems. Many companies licensed the technology, but others didn’t. Rockwell, which makes modem chips, fought Townshend in court for three years to avoid paying, but finally settled out of court in 2001 for an undisclosed amount.

But other Townshend suits continue against chip makers Agere Systems, ESS Technologies and Intel and network equipment maker Cisco. Townshend says these companies have used his technology without permission, and they say he unreasonably asks too much. A single trial for all the companies is set for July.

An Agere spokeswoman says Townshend’s suit has no merit and that Agere believes it does not need a license. A Cisco spokeswoman says it won’t comment on ongoing litigation. ESS and Intel could not be reached for comment.

Theoretically, the suits could have an impact on bank accounts of corporations because under the law, Townshend could sue users with unlicensed modems. Experts say that scenario is unlikely because there would be so many grievances, and each user would ultimately have to pay little. Plus Townshend says he is not looking to individual companies for recompense.

But he does note that the law also prohibits sale of unlicensed items, so supply channels for unlicensed modems could be shut down. But Townshend says he is focused on those that make the modems.

The deal he worked with the bulk of modem vendors starting in 1997 was for them to pay $1.25 per PC modem and $2.50 per server modem. That fee has since been lowered, and a declining rate schedule has been set with license fees diminishing over time to 19 cents for software modems and 31 cents for hardware modems in 2005. Currently, the going rate is 44 cents per PC hardware modem and 22 cents for software modems, Townshend says. It is double that for server modems.

With virtually all commercial PCs shipping with 56K modems as a standard feature, the number of modems shipping this year worldwide is expected to reach about 120 million, says Ernie Rapiere, a senior analyst with Mobility IT. Townshend won’t say how much this has meant, but if all the modems sold this year were soft modems, they would represent $26.4 million in license fees. In 2002, vendors sold 98 million modems.

The price of the chips used to make modems has been coming down, and modem cards range from $15 to $80, depending on their quality, Rapiere says. He says he expects modem sales to grow for the next few years and then taper off as broadband becomes ubiquitous from homes, and wireless Internet access service becomes widely available. But analog modems as backup likely will be sold for another 20 years, he says.

Townshend’s patented discoveries enable downloading data from the Internet at up to 56K bit/sec over a standard analog dial-up phone line. That speed is achievable only in the download direction because it involves no noisy analog-to-digital conversions on the line that slow data rates. Digital-to-analog conversions create less noise, and that is the only type of conversion necessary from an ISP using digital modems at its points of presence. Upload speeds for the modems is 38.6K bit/sec.

His discovery sparked the modem wars of 1997, when two competing implementations of 56K technology -called x2 and K56Flex – vied for supremacy. Ultimately, the International Telecommunications Union set a standard and all vendors adopted it.