AT&T tries to rain on Clearwire's parade

Ken Wieland, Contributing Editor

July 28, 2008

2 Min Read
AT&T tries to rain on Clearwire's parade

Leading US wireless operator AT&T is seeking to put a crimp in Sprint-Nextel and Clearwire’s plans to merge assets and form a nationwide WiMAX network.

Late last week the carrier filed a petition with US communications regulator the FCC, requesting that the authority refuse the merger.

In June, the new Clearwire, which is to be made up of Sprint’s wireless broadband operation and Clearwire, with funding form Intel, Google and cable players Comcast, Time Warner Cable and Bright House Networks, said it is targeting a subscriber base of over 30 million by 2017.

The operation is due to launch in Baltimore later this year, followed by a gradual nationwide deployment.

But AT&T argues that the proposal has, “failed to address in any meaningful way the competitive showing traditionally required by the FCC when reviewing major transactions. Because the applications are therefore facially defective, they should be denied.”

The allegation sounds vague, but the crux of AT&T’s argument is the new Clearwire joint venture has not fully disclosed the amount of spectrum it will use in the 2.5GHz frequency band. Specifically, says AT&T, New Clearwire has not revealed how much spectrum it is leasing from the block of 2.5GHz frequencies held by non-profit and municipal organisations, which forms an integral part of the proposed JV’s plan to roll out a nationwide WiMAX network.

AT&T argues that Sprint and Clearwire have discounted the total amount of spectrum they will lease from non-profit organisations, such as schools and universities, as some of it is not yet operational. But if that spectrum were taken into account, AT&T claims the FCC would have to put the proposed merger under greater scrutiny, particularly as New Clearwire will be competing directly against other national wireless carriers in the US.

As a case in point, AT&T notes that it had to disclose spectrum not yet operational when it acquired Dobson Communications last year, in order to maintain a level regulatory playing field.

For its part, Sprint says it has given FCC a full breakdown on the spectrum it will hold on a “county-by-county basis”, and it should be noted that Clearwire’s other main competitor, Verizon, however, has not yet made any complaints to the FCC on this issue.

In fact, AT&T stated in the filing it “does not fundamentally oppose the underlying transactions”, but added that “the regulatory process must be consistent for all entrants”.

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