June 6, 2006

Speedus Inc., a holding company that owns wireless spectrum, has sued Alltel Corp. over alleged patent infringements involving the transmission of television to a wireless phone.

According to Speedus, the technologies involved include those used to “transmit televison to wireless users over cellular networks and the simultaneous transmission of analog and digital signals within the same bandwidth.”

“We have identified infringements of two of our patents by Alltel, and we are asking them to cease and desist from these infringements in their network service,” said Shant Hovnanian, chief executive officer and chairman of Speedus.

Speedus filed a similar claim against Verizon Wireless last month. According to the company’s Web site, Speedus has 43 wireless-related patents in 22 countries and 21 patents pending that will add another six countries to the list.

“We believe that it would be difficult for any wireless communications company to construct a system without using one or more of our patented technologies,” Speedus said on its Web site.

Hovnanian said that Alltel’s reciprocal roaming agreement with Verizon Wireless has “increased the scope of unauthorized usage of our technology.”

Alltel spokesperson Andrew Moreau said that Alltel had not yet had an opportunity to review the suit, but that the company “[does] not believe we have violated any patent rights.”

Speedus, formerly CellularVision USA Inc., owns 450 MHz licenses in the New York metro area, which it uses for wireless broadband. The company also has a controlling interest in a medical device company, Zargis Medical Corp., and owns two fast-food restaurants in the New York area, F&B Güdtfood.

Speedus reported a $5.5 million loss in 2005 and has made a profit only in two years out of the last six. In 2001, it reported profits of $2.8 million due to investments gains. In 2004, the company spent $2.9 million on a technology suit that ended up being settled for $15 million, giving Speedus a $6 million profit for the year.

The company made a 1999 deal with Nextlink (which is now a subsidiary of XO Communications) in which Nextlink purchased two million shares of stock for $10 a piece.

However, by 2001 Speedus was struggling to maintain the minimum $1 per share price to be listed on the Nasdaq Stock Exchange. The company’s stock was up about 10 percent in midday trading in response to the Alltel suit, to $1.42 per share.

Source: RCR