Verizon Wireless announced today it has successfully tested its fourth-generation wireless network in Boston and Seattle, by making “data calls” involving streaming video, Web browsing, and file uploads and downloads from mobile devices. Verizon’s technology, called Long Term Evolution, is supposed to be much faster than existing 3G wireless networks, and competes with Clearwire’s WiMax system, which has already launched in four cities (including Portland, OR). Boston and Seattle will be the first cities to deploy Verizon’s 4G service.

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San Diego-based Rayspan said today that it has collected $12.5 million in Series B funding to finance its work on advanced materials that could be used to make smaller, more sensitive, and more versatile antennas for mobile devices. Existing investor Sequoia Capital of Menlo Park, CA, provided part of the money, with the rest coming from new investor Khosla Ventures, also of Menlo Park.

The wireless world is fraught with different, often competing standards for delivering data to mobile devices across small or large distances, including Bluetooth, Wi-Fi, 2G and 3G cellular, and GPS. Coming down the road just behind those are newer technologies like WiMax, Long Term Evolution (LTE), and ultrawideband. It takes a fancy antenna, or several of them, to make a mobile device like a cell phone work on several of these standards at once. And WiMax and LTE work best using an altogether new type of antenna called multiple-input-multiple-output (MIMO).

The problem with MIMO antennas to date has been that to work efficiently, they need to be of a certain size—about half of the wavelength of the radio frequency they’re designed to detect. If you make them small enough to fit inside a mobile device, they lose sensitivity.

Rayspan, founded in 2006, is taking advantage of progress in a field called metamaterials to make much smaller MIMO antennas that still have high performance.

Metamaterials are composite materials that are structured on a macroscopic level to have unusual optical or electromagnetic properties. Maha Achour, Rayspan’s co-founder and chief technology officer, has applied for patents on a range of radio-related applications for metamaterials, including MIMO antennas (also called “air interfaces”) with individual elements that are as small as one-tenth to one-fifteenth of a wavelength. Such elements can be printed directly on a circuit board and spaced very closely together, potentially giving small mobile devices full MIMO performance.

Rayspan hopes to license the intellectual property behind its metamaterial antennas to wireless device manufacturers making cellular, Wi-Fi, WiMax, and multiband equipment. Pierre Lamond, a general partner at Khosla ventures, said in today’s announcement that the firm believes Rayspan will become “an industry-leading air interface provider in the huge wireless markets they target.”

Achour is a San Diego wireless industry veteran with a doctorate in physics from MIT. She has worked at
San Diego Research Center, UlmTech, Optical Access, LightPointe, and Tiernan Communication. Her co-founder Franz Birkner, Rayspan’s CEO and president, is managing director of Express Ventures and is a veteran of Dot Wireless (acquired by Texas Instruments), Cognet Microsystems (acquired by Intel), and ComStream (acquired by Spar Aerospace).

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San Diego wireless giant Qualcomm (NASDAQ: QCOM) and Irvine, CA-based Broadcom (NASDAQ: BRCM) said last night they have agreed to end their wide-ranging patent war and enter a broad cross-licensing deal.

As part of the global settlement, which terminates litigation in federal court as well as formal disputes before trade commissions in Europe and South Korea, Qualcomm has agreed to pay Broadcom $891 million over the next four years. Qualcomm says its first payment, for $200 million, will be paid to Broadcom before June 30.

That could put a ding in Qualcomm’s net income next quarter, but it seems doubtful shareholders will mind. A J.P. Morgan analyst said last week that settlement payments would have little impact on Qualcomm’s future earnings.

When Qualcomm announced Wednesday that it was postponing the release of its earnings for the second that ended in March (because it was in advanced settlement talks with Broadcom), the San Diego company added it would meet or exceed its prior guidance for quarterly revenue and operating income (excluding the cost of its deal with Broadcom.) In last year’s second quarter, Qualcomm reported operating income of $766 million on $2.6 billion in revenue—and the company said earlier this year it expected second-quarter revenue to fall between $2.25 billion and $2.45 billion.

The agreement also relieves both Broadcom and Qualcomm of substantial legal costs—in a battle where Qualcomm wasn’t faring particularly well. The company suffered its worst setback in mid-2007 when San Diego federal judge Rudi Brewster issued a blistering, 54-page ruling that found Qualcomm and its trial counsel had committed “gross litigation misconduct” by withholding tens of thousands of relevant documents from Broadcom during a patent infringement trial. That decision against Qualcomm was largely upheld by a federal appellate court last December.

Strategically, the benefits of reaching a comprehensive settlement with Broadcom would seem to far outweigh the financial impact on Qualcomm’s earnings—especially since Qualcomm said terms of the agreement “will not result in any change” to its licensing revenue model for its 3G and 4G wireless technologies. And Qualcomm’s licensing revenue is the central engine of its success.

After fighting for more than a decade to establish its CDMA (for Code Division Multiple Access) wireless digital standard, Qualcomm attained its first strategic breakthrough in 1999, when it settled a wide-ranging patent dispute with Sweden’s Ericsson. In that deal, Qualcomm agreed to sell its CDMA wireless infrastructure business to Ericsson and Ericsson agreed to support a single worldwide CDMA standard.

At that time, Qualcomm also settled on a corporate strategy that focused its business on wireless innovation, which enabled the company to generate enormous revenue through technology licensing deals.

In July, Qualcomm struck a surprise settlement agreement with Nokia, the world’s largest mobile phone maker, that ended a similar high-stakes licensing dispute. That deal enables Qualcomm and Nokia to share many more technology patents than they did before. Qualcomm also licensed its technology to Nokia and Nokia allowed Qualcomm to incorporate its technology within its mobile phone components; buyers of those components will pay Nokia’s royalty fees rather than Qualcomm’s.

Broadcom posed the last major challenge to Qualcomm’s licensing model.

“We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry,” Paul E. Jacobs, chairman and CEO of Qualcomm, and Scott A. McGregor, president and CEO of Broadcom, said in a joint statement.

“The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn, and growing demand for wireless products and services,” Jacobs said.

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Verizon’s schedule for deploying speedy fourth generation mobile phones may be subject to delay. Citing a Deutsche Bank research report issued this morning, GigaOM suggests Verizon won’t make its plan to have LTE (Long-Term Evolution) handsets available by the end of 2010.

The holdup is due to the LTE chip production schedule at San Diego’s Qualcomm (NASDAQ: QCOM). Verizon has said it will have LTE in 20-35 markets by the end of 2010. However, Qualcomm’s LTE chips for data cards won’t be generally available until the second half of 2010, according to Deutsche Bank.

The process of building new chips into phones usually takes up to 18 months after the first chips are out. So LTE chips for handsets might not be available until well into 2011.

Qualcomm marketing director Michael Mamaghani said in San Francisco last week he expects the commercialization of LTE devices to happen in 2012 or later.

LTE represents an upgrade in 3G UMTS technology to 4G mobile technology. Verizon, AT&T, Motorola, and Samsung have generally shown more interest in LTE, while Sprint and Intel are advancing with rival WiMax (’Worldwide Inter-operability for Microwave Access’) technology. Intel has developed its own WiMax chipset.

Anssi Vanjoki from Nokia, the world’s largest mobile phone producer, last week harshly compared WiMax to Betamax, the early video format that was superseded by VHS in the 1980s.

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Since May, Kirkland, WA-based Clearwire (NASDAQ: CLWRD) and Overland Park, KS-based Sprint Nextel (NYSE: S) have been working to combine their next-generation wireless Internet access businesses, and the two companies finally completed the deal on Friday. Using a $3.2 billion venture investment from Comcast, Intel, Time Warner Cable, Google and Bright House Networks, the new company, to retain the name Clearwire, plans to upgrade the 46 markets where Clearwire already offers wireless data services to WiMax-based systems under the “Clear” brand, replacing the “XOHM” brand Sprint Nextel has been using in Baltimore and other test locations.

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Overland Park, KS-based Sprint, which is building a nationwide WiMax network called XOHM, has picked Boston’s uLocate to power the local information and mapping services for XOHM subscribers. XOHM, a so-called “4G” network, will cover entire metropolitan areas with broadband wireless data at speeds approaching those of cable Internet service. In an announcement yesterday, uLocate said developers will be able to use its Where platform to build information services that use the location information built into WiMax signals.

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On Thursday night I found myself at the too-hip W Hotel in downtown Seattle, taking in a paidContent mixer hosted by publisher Rafat Ali and mocoNews.net principal correspondent Tricia Duryee. The topic was “mobile advertising in a 4G world.” John Cook of the Seattle P-I did a nice writeup of the event, catching up with a number of investors in attendance. And like John, no, I didn’t know that LinkedIn (which just raised $53 million this month) started in Seattle—interesting story.

As a relative newcomer to the whole mobile-online-ad space (I talk on my phone, that’s about it), I found the evening’s keynote and panel discussion most interesting. First, Scott Richardson, chief strategy officer of Kirkland-based Clearwire, gave a keynote about new online advertising campaigns for WiMax or “4G”—next-generation broadband wireless. These ads specifically target cell phones and smartphones, and show that there’s a lot of activity in figuring out how to deliver ads on mobile devices that are as effective as online advertising on desktops and laptops.

Duryee quoted a stat from eMarketer for context. In 2007, mobile advertising was an $878 million market in the U.S. That’s still a lot less than desktop online advertising, but the gap is expected to shrink in the next few years.

Next, Duryee moderated a panel of four industry execs, all wearing the same uniform—sportjacket, casual dress shirt, and slacks. They all stand to gain from mobile ads, so the main point of discussion revolved around how to make mobile advertising into a big business. Here are my quick take-aways from each, in their own words.

—Kyoo Kim, VP of Sales, MSNBC.com: “Microsoft is investing a lot in the mobile [advertising] space… What I tell my staff is, it’s got to be easy to buy, and easy to sell.”

—Jason Gruber, VP of U.S. Mobile Strategic Development, AOL: “For the next 24 months, the [wireless] carriers will play a big role in the value chain. There’s a fear factor in doing targeted ads [based on browsing behaviors]—will they lose customers? So far that hasn’t happened.” (The fear, apparently, is that customers will get mad if they get too many junk ads pushed onto their cell phones—which sounds reasonable to me.)

—Jeremy Wright, Global Director of Mobile Brand Strategy, Nokia Interactive Advertising: “There’s a tendency to see mobile as extending the desktop experience, but it’s much more powerful to engage people while they’re out and about. A mobile device is about finding things near you… The auto industry and entertainment are growing strong. Travel and finance have yet to get going.”

–Jeff Giard, VP of Business Development, Alltel: “The state of the market is very nascent. We have a long road to go… We have to create standards around mobile ads. Advertisers want to reach their audience across all carriers, not just T-Mobile or Verizon subscribers… We also need to be mindful of customer service and privacy—how to use and make available demographic, location, and behavioral information, and do it in a measured way.”

Lastly, Duryee pointed out that this month some people are paying $2.99 for a mobile “game” released by Paramount Digital to promote “The Love Guru,” a comedy starring Mike Myers. (I don’t think it’ll make up for the fact that he stopped being funny in 1997.) So look out for those ads masquerading as games and other entertainment…

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