Clearwire: We're Still on Track

Wireless broadband operator Clearwire LLC (Nasdaq: CLWR) says it still expects to close a deal to get Sprint Nextel Corp. (NYSE: S)'s WiMax assets and a much needed $3.2 billion investment before the end of the year, despite AT&T Inc. (NYSE: T)'s complaints to the Federal Communications Commission (FCC) about the spectrum that would be held by the combined operation.

The Kirkland, Wash.-based operator tells Unstrung that it stills expects to close the "new" Clearwire deal in the fourth quarter. "We continue to believe that the approval process is on track to permit closing before the end of the year," a company spokeswoman says in an email reply to questions. "We’re fully confident that the Sprint transaction is in the public interest, as it will increase competition, stimulate innovation and provide the first nationwide ‘true broadband’ network."

AT&T wants the current application for Clearwire's WiMax deal with Sprint blocked because of the 2.5 GHz spectrum that the pair holds. The operator contends that if the FCC were to include Sprint and Clearwire's non-operational spectrum, then its proposed merger would be subject to more scrutiny and, so, the application should be denied. (See AT&T Looks to Block Sprint/Clearwire Merger and Spectrum Scrap.)

Anything that slows the regulatory progress of the Clearwire-Sprint deal could make life more difficult for the wireless broadband operator. Some of its initial mobile WiMax deployments appear to hinge on additional funding, which the operator will have to find elsewhere if the deal -- with its $3.2 billion from Google (Nasdaq: GOOG) and the cable companies -- doesn't close as expected.

Clearwire expects to go commercial with its first Portland, Ore., mobile WiMax deployment in the fourth quarter. This network could be followed by Atlanta, Grand Rapids, and Las Vegas. All of that does hinge on funding, however. (See Clearwire Loss Grows as Revenue Rises .)

"While we are in a great position to launch mobile WiMAX in our Portland market by the end of the year, the timing of the commercial launch is based on a timely close of the Sprint transaction and whether we choose to secure additional financing in the interim," a spokeswoman for the operator told us recently.

Currently the operator is running a so-called "pre-WiMax" fixed wireless network using proprietary technology from NextNet, which was bought by Motorola Inc. (NYSE: MOT) (See Clearwire Nabs $900M, Nixes IPO.) Eventually Clearwire hopes to overlay all of its current sites with mobile WiMax technology. (See Clearwire’s WiMax Overlay.)

Intriguingly, AT&T could also be examining the limited use of WiMax, but as alternative to DSL or cable in rural regions rather than a mobile technology. The company's CTO recently described WiMax as a leading candidate in its hunt for a cheaper alternative to copper. (See AT&T: WiMax Is Top Candidate for Rural Broadband.)

— Dan Jones, Site Editor, Unstrung