Sprint Nextel and Clearwire hope to clear the next hurdle in their proposed merger Nov. 4 when the Federal Communications Commission votes on the deal, along with the Verizon-Alltel merger. In the works since 2007, Sprint plans to spin off its WiMax Xohm division into a new company with wireless broadband provider Clearwire. The new venture has substantial backing from Intel, Google, Motorola, Comcast and Time Warner.
With a WiMax beachhead established in Baltimore
and the promise of a nationwide rollout of the 4G technology within the next
two years, Sprint Nextel
and Clearwire now turn their attention to completing a
merger between the two companies. First stop, the Federal Commissions
Commission on Nov. 4.
FCC Chairman Kevin Martin said Oct. 15 he plans to put the merger, pending since
May, on the agency's blockbuster Election Day agenda that also includes a vote
on the Verizon-Alltel merger and the use of digital television interference
zones for unlicensed broadband use.
Sprint Nextel CEO Dan Hesse said Oct. 8
at the official
debut of the Baltimore WiMax network
that he expected no regulatory
problems with the merger, and Martin indicated that the FCC has only minimal
regulatory tags to attach to the deal, including a proposed enhanced 911
location accuracy standard.
Even with FCC approval, the merger still must receive approval from the Department
of Justice. Hesse said he expects final approval by the
end of the year.
Under the plan, Sprint will merge its struggling WiMax division with
Clearwire to create a new company operating under the Clearwire name. Upon
completion of the deal, Sprint, the nation's No. 3 wireless carrier, will own
the largest stake in the new company, with about 51 percent equity ownership.
Existing Clearwire shareholders will own about 27 percent of the venture. A new
strategic investors group-including Intel, Google, Comcast and Time Warner-will
acquire about 22 percent of the new company.
Intel, a longtime proponent of WiMax, will invest about $1 billion into the
new company, while Comcast plans to contribute a little more than $1 billion.
Time Warner is putting up $550 million and Google $500 million.
Google will become Sprint's preferred mobile search provider, and Sprint
users will have easier access to Google Maps for mobile, YouTube and other
Google services. Intel will supply networking gear and software for the new
WiMax promises faster download speeds than the latest networks run by cell
phone operators, and it's even seen as a potential competitor to fixed-line
broadband like DSL.