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11/5/2008
02:40 PM
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FCC Approves Sprint-Clearwire Merger, Nationwide WiMax Coming

Conditions include commitments by Sprint Nextel to phase out its federal high-cost universal service support and improve emergency 911 calls.

The proposed nationwide Clearwire WiMax network is scheduled to get wheeling later this month in the wake of FCC approval Tuesday of the network's merger with Sprint and as new partners prepare to contribute $3.2 billion to fuel the endeavor.

By moving its mobile WiMax operations over to Clearwire, Sprint will be able to focus on its own struggling mobile phone operation and on its also struggling Nextel iDEN network, which it decided to improve last week after failing to find a buyer for it.

Sprint is shifting a phalanx of top executives to Clearwire from its WiMax operation. Sprint recently debuted its first citywide WiMax hotspot to favorable reviews in Baltimore, and the shift will enable it to focus on fixing its Sprint operation and on improving the iDEN network, which it inherited when it acquired Nextel.

In a side note, serial wireless entrepreneur Craig McCaw was a founder of both Clearwire and Nextel.

In approving the $14.5 Clearwire merger -- not including the $3.1 billion slated to be invested later -- the FCC said: "The FCC examined the market for various services and concluded that the companies had demonstrated that the transaction will be in the public interest with no competitive harm identified in any market."

The FCC placed a few conditions on the merger, including a commitment by Sprint Nextel to phase out its federal high-cost universal service support and another commitment designed to improve the accuracy of 911 emergency calling. The merger was approved unanimously by the FCC's five commissioners.

The WiMax endeavor, which also calls for the establishment of mobile WiMax to be built over Clearwire's existing fixed WiMax network, would be helped not only by the new funding from its partners, but also by the prestige and industry clout of the investing firms. Comcast has offered to contribute $1.05 billion, Google, $500 million; Intel, $1 billion; and Time Warner, $550 million.

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