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Jittery tech analysts looking for the next Enron think they might have found their quarry, in the shape of bare-knuckle wireless pugilist Qualcomm.

But Qualcomm, which was accused by an independent accounting watchdog of exaggerating its earnings on Friday, for now appears to have regained its equilibrium.

Qualcomm became the fourth most-traded stock on NASDAQ after an examination of the company's books by Howard Schilit was leaked to the wires. Schilit, who has testified before Congress on iffy accounting practices, and whose fine print forensics have snared IBM and Microsoft in the past, drew attention to Qualcomm's opaque earnings statements and, for good measure, accused the company of nepotism.

We rang Schilit, only to discover that his own media strategy is every bit as opaque as Qualcomm's.

"There is no forthcoming report," he snarled in an email to The Register. (After we were refused the opportunity to leave a message on his voicemail). "We only speak to our subscribers on specific companies."

His factotum wouldn't even confirm that Schilit had written the report, which is patently absurd, as it's been the talk of Wall Street over the weekend.

Qualcomm admits that on some counts, it's guilty as charged. It has fessed up to taking stocks as income and booking them as cash earnings. But that's standard practice, it maintains. It strongly refutes the charge of nepotism.

CNN's David Futrelle noted that Qualcomm's Wall Street boosters even raised their ratings after the Schilit fright, which should surprise no-one.

In the late 1990s, starry-eyed tech prophet and uber-capitalist George Gilder relentlessly promoted the stock to American investors, with great success. (He later confessed to owning substantial Qualcomm holdings himself).

Gilder brushed aside the fact that the non-American 2G voice industry was moving away from Qualcomm's thuggish business style at a rate of knots, and effectively ring-fencing the technologically superior, but increasingly irrelevant CDMA in a technological cul de sac. "Why imitate European failures?", Gilder asked back in 1993. US cellular subscribers can now mull over this question at their leisure.

Qualcomm's pioneering, but far from exclusive, role in developing CDMA was enveloped in a business model that made RAMBUS look like a bunch of hairy, free software hippies. Patent, sue and run; a scorched-earth approach to intellectual property that hit a hurdle in 1997 when it discovered that Ericsson and Nokia had equally useful CDMA patents, and it found itself outgunned.

Qualcomm blinked, but it's been crowing about being the basis for 3G wireless ever since. This claim does't hold water when you examine closely the cross-licensing agreements struck by the giants. (Futrelle generously points out that future Qualcomm revenues may be steady, but modest. But it may be worse than that: much of the 3G infrastructure has already been acquired and paid for, and if Qualcomm hasn't seen the royalties now, it never will. Right now is as good as it will ever get for Qualcomm shareholders).

Qualcomm isn't entirely to blame for the pitiful state of the US wireless industry: cretinous decisions by the regulatory agency the FTC (which effectively mandated regional monopolies) - and myopic carriers (which refuse roaming as a point of principle) - ensure that the US citizen has the worst of all worlds. The powerful network effects of using a common infrastructure have, regrettably, all but passed the US by.

But the CDMA patent powerhouse doesn't seem to mind being cast as the most obnoxious technology company on the planet, In fact, it positively relishes the odium.

The San Jose Mercury reported that Qualcomm yesterday reaffirmed the appointment of Frank Savage to the Qualcomm board. Savage also serves on the board of Enron Corp. He joins former spook-minder Brent Scowcroft, a national security advisor to two Republican administrations, on the Qualcomm board.

"Do you want to be in bed with skunks like that?" asks one objector. Both directorships are expected to be approved. ®

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Walk on Splintered Gilders [with apologies to Dr John]

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