Am I misunderstanding something? Cisco is releasing source code to something heavily patent-encumbered, but is doing so under BSD, an open source license with no patent release. What value is the source code then? I can only imagine it's to allow others to verify the correctness of their implementation. You certainly can't use that source code in your own binaries.
It will be just another H.264 decoder and encoder, like in libavcodec and x264 respectively. It's actually pretty exciting since no competing (with x264) open source H.264 encoder ever managed to reach maturity. And it's licensed more liberally than x264's GPL+commercial.
> You certainly can't use that source code in your own binaries.
Obviously you can, but then it's up to you to work it out with the MPEG-LA. Or not, depending on where you live.
Sure you can use it, but you are obliged to license the patents for distribution. MPEG-LA license fees are $0 for the first 100k instances, and $0.20 per instance over 100k units (up to 5 million). Fees drop further for more units.