AT&T Objects to Sprint-Clearwire Deal

While a September launch of a WiMax mobile wireless network in Baltimore is still expected, the future of a national WiMax network remains in question.

Last week, AT&T Inc. asked the U.S. Federal Communications Commission to deny a request by Sprint Nextel Corp. and Clearwire Corp. for radio spectrum licenses needed for their proposed joint venture to offer nationwide WiMax service.

The fate of that petition remains unclear, but it demonstrates how intensely AT&T, and possibly other carriers, intend to fight WiMax technology. AT&T and other carriers globally using GSM wireless technology intend to support Long-Term Evolution (LTE) as their preferred upgrade technology, and not WiMax.

AT&T's filing will have no impact on the Baltimore WiMax launch, set for sometime in September, Sprint spokesman Scott Sloat said in an e-mail Friday. Specific responses to AT&T's filing will be made on Aug. 4, but the spokesman said more than 100 filings from other companies and groups have been made at FCC in favor of the joint venture.

Sprint officials have consistently defended WiMax as a here-and-now technology that is two years ahead of the arrival of LTE. In June, Sprint officials said that sometime in September, WiMax service will launch in Baltimore where trials have already been conducted. Service in Chicago and Washington is expected later, possibly by the end of the year.

Another Sprint spokesman, John Polivka, said Friday that the Sprint-Clearwire joint venture announced in May is moving ahead and should be finalized sometime in the fourth quarter.

The 17-page AT&T filing claims that Sprint and Clearwire have sought to avoid the FCC review process by minimizing the full extent of their current spectrum holdings and "have omitted any information relevant to the traditional public interest analysis applied by the FCC." AT&T argued that the Sprint-Clearwire application was "fatally defective" and should be dismissed.

Sprint and Clearwire are seeking to transfer licenses that they separately hold in the 2.5 GHz spectrum to the proposed joint venture. Sprint and Clearwire had "exhaustively documented all of their spectrum holdings, including a county by county breakout and described the myriad public interest benefits of the transaction," Sprint's Sloat said.

Some analysts have questioned how well WiMax might do in the U.S., given the breadth of GSM carriers expected to adopt LTE. Phillip Redman, an analyst at Gartner Inc., this week called WiMax a "niche technology compared with the global cellular market."

In response, Sprint's Polivka said in an interview, "Well, if it's a niche, it's a global niche."

Redman specifically questioned what Sprint and Clearwire were doing to finalize the joint venture plans and asked what plans the companies have for pushing WiMax service beyond the trial market launches and into a national network.

"What will the infrastructure for the national network be, and what's the financing?" Redman asked in an interview. "They don't have the money to roll out a national network." Redman anticipated it might take US$12 billion to roll out a national network. The proposed joint venture of Sprint and Clearwire is expected to raise $3.2 billion from Intel Corp, Google Inc. and three cable companies, but that is not nearly what a national network would require, Redman said.

Sprint's Polivka said details of a national network will become available when the joint venture is finalized sometime in the fourth quarter. "Stay tuned," he said.

In a related WiMax development, officials at Nortel Networks today said that Nortel still intends to develop WiMax related technology and hardware, despite some analyst and media interpretations in the market to the contrary.

"Nortel is aggressively pursuing early market opportunities with WiMax ... We believe WiMax presents a significant market opportunity," said Scott Wickware, general manager of WiMax at Nortel in an e-mail.

Nortel recently reached a strategic WiMax agreement with Alvarian to help Nortel bring WiMax to market faster and at a lower cost, Nortel officials said.