By Michal Lev-Ram

America is known as a nation of TV watchers, but viewers have not embraced the small screen as enthusiastically as they have the big one in their living room.

Just 4.6% of U.S. wireless customers have watched TV or videos on their cell phone, according to research firm M:Metrics. Verizon Wireless (VZ) has yet to release subscriber numbers for a mobile TV offering it launched last year, but Paul Jacobs, the CEO of Qualcomm (QCOM), which provides the live television service, recently said that adoption has been slower than he would like.

Now Verizon rival AT&T (T) is gearing up for the May launch of the same Qualcomm service, called MediaFlo. The question is, will subscribers to the country’s largest nationwide network want to watch?

Analysts say that while U.S. consumers love their TV, it’s not clear there is a huge demand for full-length programming on the go. For one, most Americans commute by car, not on public transportation.

“Without a clear block of time like commuting on the subway it’s just not clear there will be that many people willing to pay for the service,” says Tim Farrar, president of research firm Telecom, Media and Finance Associates.

But Farrar says that even in countries like Japan and Korea, where consumers watch mobile TV on the train, the business model remains unproven. Korea’s TU Media, the company that runs local carrier SK Telecom’s ad-sponsored mobile TV service, acknowledges it is losing money due to poor ad sales and reportedly laid off about a third of its staff earlier this year.

Although AT&T says it won’t disclose pricing information until the service launches, Verizon currently charges $15 per month for access to eight channels, including Comedy Central and MTV. That fee doesn’t include the cost of a data and voice plan.

Another problem, says Farrar, is that Qualcomm’s live mobile TV network doesn’t yet blanket the entire country and doesn’t work on a wide variety of devices. Only those consumers who live in a select number of markets can get the service and must purchase a new phone to use it. AT&T says it will initially offer only two TV-compatible devices, the LG Vu and the Access by Samsung.

Of course, another possible reason for the slow uptake of mobile TV is that many consumers don’t even know it exists.

“When people haven’t tried a service before you need to educate them and show them how much fun it will be,” said AT&T spokesman Mark Siegel, who declined to comment on how the carrier plans to market and advertise its upcoming service.

By Michal Lev-Ram

After nearly eight weeks and 261 rounds of bidding, the government’s spectrum auction finally ended Tuesday.

In January,  the Federal Communications Commission began auctioning off the coveted 700MHz spectrum, which is particularly suited for broadband services and is the last major chunk of nationwide spectrum.  The FCC had hoped to raise at least $10 billion from the auction, but as the last bid came in late Tuesday the total reached $19.6 billion. The auction attracted companies such as Verizon (VZ), Google (GOOG), AT&T (T) and Qualcomm (QCOM).  The spectrum is currently used for television, which will give up the airwaves in 2009 when TV broadcasting goes digital.

As this was a “blind” auction, the bidders’ identities were kept secret.  But the winners won’t be revealed until all five blocks of spectrum up for auction are accounted for — the so-called D block, which was set aside for a nationwide public safety network, failed to raise the minimum price set by the FCC. Analysts say it’s likely the government will separate the D block from the rest of the auction and put it up for sale again  so they can collect the money for the other blocks.

By Michal Lev-Ram

This is not exactly the best week to kick off a multi-billion dollar wireless spectrum auction, what with the markets melting down and tech stocks like Google, Sprint, Motorola and Apple taking big hits.

But on Thursday the Federal Communications Commission’s 700 MHz spectrum auction begins, and analysts worry that the current economic climate could make it harder for newcomers to come up with the cash needed for opening bids.

The 700 MHz spectrum originally was used for analog television and when the FCC mandated that TV go all-digital by next year, it put the rights to the spectrum on the auction block. The spectrum is highly coveted for broadband because signals can travel long distances and penetrate walls. That attracted the attention of Google, which pledged to meet the minimum $4.6 billion bid requirement and successfully pressed the FCC to require the winner of the auction to allow any mobile device to work on the network rather than just those the wireless carrier chooses. Google subsequently unveiled its Android initiative to develop open operating standards and applications for cell phones.

The FCC has set a minimum bid it wants to receive for the various blocks of spectrum. In total, it hopes to raise at least $10 billion. If that is not met, then the agency will begin a new round of auctions by dropping some restrictions — such as the requirement that portions of the spectrum be open to any mobile device - in the hope of attracting additional bidders.

Already, startup Frontline Wireless backed out of the bidding race last week, reportedly due to a lack of financing.

Still, the auction begins with 214 qualified bidders, including AT&T (T), Verizon Wireless (VZ), Google (GOOG), EchoStar Communications (DISH), Qualcomm (QCOM) and even Microsoft co-founder Paul Allen.

As this will be a blind auction, we will know the amount of each bid but not the identity of the bidder until bidding on all spectrum licenses has stopped.

It could be anywhere from a few weeks to several months before the auction ends and the winners are revealed. Who knows, maybe by then the market downturn will be long over.

By Michal Lev-Ram

LAS VEGAS — Paul Jacobs got his start in a robotics lab in the south of France. Now he runs Qualcomm, one of the world’s largest wireless technology companies. Fortune sat down with Jacobs at the Consumer Electronics Show in Las Vegas to talk about the future of wireless services like mobile TV, 4G technology and Qualcomm’s recent legal troubles. Late last month Qualcomm suffered a significant setback when a federal judge barred the San Diego-based company from selling chips that infringe on patents held by chipmaker Broadcom’s (BRCM).

Let’s talk about MediaFLO, your live mobile TV standard. I know Verizon (VZ) has already launched it and AT&T (T) has signed on. Are you happy with the progress you’ve made so far?

It’s like any service, you’d like to have more people on the service as quick as possible, more devices out there and more content. It’s like any new technology — it takes a little while before things start to take off. Plus, there were a lot of things we had to do to get it running. We had to get a lot of rights cleared for it. It really wasn’t just about getting a technology going, it was a much broader ecosystem that had to be built up. It’s moving along but, like anything, you always want to go faster.

What was the thinking behind developing yet another mobile TV standard?

The genesis was looking at doing broadcast TV over the cellular network. We realized you couldn’t really do it economically, so we said, how about we start with a clean sheet of paper? How do we build something that really will provide great multimedia and very high quality video at a fairly inexpensive price? That’s why we decided to start from scratch. And, in fact, when we started it, it wasn’t the case that there were other competing technologies for broadcast out there. That kind of came as we were doing the development of MediaFLO. I think we felt like we could do a better job.

What’s your take on the different 4G [high-speed cellular networks] technology standards and when do you think we’ll see mainstream adoption of 4G in the United States?

Obviously Sprint’s (S) talked about rollouts of their service starting in the end of 2008. But the WiMax technology that that’s based off of hasn’t really been developed specifically for mobile use — it doesn’t handle handoffs [transferring calls or data from one cell tower to another] and streaming as well as I would say the next version of it should. Then there are two other technologies: There’s LTE [Long Term Evolution, a 4G standard designed for GMS networks], which Verizon recently said they’ll look at as one of their paths going forward and there’s the UMB [Ultra Mobile Broadband] technology that we worked on. We will be able to roll out chipsets and infrastructure for UMB in the 2009 time frame. But for the most part, I think you won’t see mainstream, major adoption of 4G technologies until a few more years. As with any of these technologies it takes a little while to get through the teething pains and really get it up into the large volumes.

In the past Verizon has been a reliable proponent of your technologies. What kind of impact does Verizon’s decision to embrace LTE have on Qualcomm (QCOM)?

We developed a lot of LTE technology as well. Early on we had been working on various technologies that go into LTE, so we have a lot of intellectual property in it. Plus, we make chips for all different technologies, so we’ll make chips that have LTE in them as well. And really from our core business standpoint, it’s not that big of a difference which technology they chose. For us it’s just another opportunity to put some more tech into the chipsets. Sure, we prefer the technologies that we’ve done all of the system design for, but, in fact, all of these technologies have aspects of our designs in them.

Are you still hopeful about the prospects of UMB?

We’re doing trials with other operators in other countries, so I think there’s still an opportunity for it.

You’ve been involved in several patent disputes recently. Most recently there was an injunction against several Qualcomm products that were found to infringe on Broadcom patents. What kind of impact will that have on the company?

We announced that we have a set of chips where we’ve actually designed out the [infringing technology]. There’s a short-term impact on us and our customers in switching those customers from the chips that they were using to these new chips. We believe that we’ll be able to have those handsets on the market before the end of this quarter. So there is that short-term impact, but we believe that we’ll be able to mitigate it by the end of the quarter. In the medium term there were some products that were in design that we have to make some modifications to. In the long term they had this sunsetting period as part of the injunction which said that we could continue to sell certain products for a certain period of time. We have that time frame by which we have to do a full design-around for some of the other patents. It’s really just a question of getting clarification from the court in time so that we can get the design-around done.

What are some things you think we’ll be doing with our phones five years from now that we’re not doing today?

One of the things that’s exciting is we have this new microprocessor technology that’s got about 10 times better power consumption than the existing thing you have in your laptop. I think we’re going to see people doing a lot of computing in a device that’s handheld and pocketable. Obviously entertainment is going to be big, and there’s 3D gaming, data services and music services. Then there’s navigation. I think we’ll see some interesting combinations with that and services that already exist on the web. And over time, you’ll see the phone take more and more of a role in mobile commerce.

By Michal Lev-Ram

Half the world doesn’t even own a mobile phone but wireless carriers are already fighting over the next-generation cellular network.

Consumers may care less about whether they’ll be using WiMAX, LTE or UMB to download video to their phones or browse the Web faster than ever before. But one by one, mobile operators are aligning themselves with one of these competing next-generation, or 4G, technologies, placing billion-dollar bets on the horse they hope will win the race.

All three of the dueling technologies are Internet Protocol-based and tailored for mobile television, video chat and other data services that eat up a lot of bandwidth.

The first of these technologies to hit prime time will be WiMax, which Sprint (S) is expected to soon launch in three trial markets — Chicago, Washington D.C. and Baltimore. By the end of 2008 the company says it will reach 100 million people with its new network. Motorola (MOT), one of the suppliers of infrastructure equipment — and eventually WiMax-enabled phones — for Sprint’s upcoming service, says it has signed 15 contracts for commercial WiMax networks.

“We’re driving it at about twice the pace of traditional cellular technologies,” Fred Wright, senior VP of Motorola’s home and networks mobility unit, told reporters earlier this week.

WiMax proponents claim that the technology is superior to other 4G standards because it’s faster and more affordable. But Philip Solis, an analyst with New York-based ABI Research, says all 4G networks are more or less created equal.

“The three major 4G technologies are pretty much on par with each other,” says Solis, though he adds that WiMax has already been standardized and deployed.

That didn’t stop Verizon Wireless (VZ) from picking LTE — Long Term Evolution. Solis says LTE isn’t expected to become widely available until 2010, but Verizon says it chose the technology partly because the roaming potential it will have with Vodafone. The British company owns a 40 percent stake in Verizon and has already chosen LTE as its next generation technology.

Although the two largest CDMA carriers in the United States have picked opposing 4G technologies, Motorola’s Wright says that won’t slow adoption of next-gen networks.

“There’s probably more industry confusion that was created than anything else,” he says.

The U.S.’s No. 1 wireless carrier, AT&T (T), has not decided which 4G network it will deploy.

In addition to WiMAX and LTE, AT&T has yet another technology to choose from — Qualcomm’s (QCOM) UMB, or Ultra Mobile Broadband. So far, though, no mobile operator has committed to UBM.

But the bigger question — beyond whether the 4G network of choice will be WiMAX, LTE or UMB –– is whether consumers are as hungry for wireless broadband as carriers think they are.

“We’re all hoping they’ll want to watch TV on their cell phones,” says Qualcomm executive Joe Lawrence.