Sprint Affiliate iPCS Sues to Block Clearwire WiMAX Deal
May 20, 2008
iPCS Inc., an affiliate of Sprint Nextel Corp., is attempting to block Sprint from partnering with Clearwire Corp. to combine their wireless broadband units to form a new $14.55 billion communications company called Clearwire.
In a lawsuit filed in Cook County Circuit Court of Illinois, iPCS alleges the new service would be a competitor in their markets and is in clear violation of Sprint’s 1999 exclusivity agreement with iPCS.
Clearwire Network to Utilize WiMAX Technology
The new company, Clearwire, will expand its mobile network based on WiMAX technology. Similar to Wi-Fi, WiMAX is found in homes, retail shops, and airports but has the capability to cover larger areas while providing faster download speeds to customers. The new company has financial backing from well recognized companies including Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc., and Bright House Networks which have agreed to invest $3.2 billion in Clearwater.
iPCS Battles Sprint Over Exclusivity Agreement
Illinois based iPCS, with a seven-state market and more than 640,000 subscribers, was also at odds with Sprint earlier this year. At that time an Illinois appellate court upheld a lower court ruling that Sprint violated their exclusivity agreement with iPCS when it purchased Nextel Communications Inc. in 2005. Sprint is appealing the court’s decision which would force the company to divest all of its Nextel assets in iPCS markets.
"iPCS believes that Sprint Nextel's recently announced WiMax transaction is another attempt by Sprint Nextel to breach the exclusivity provisions of the iPCS affiliation agreements," the company said. "iPCS intends to fully and aggressively protect and defend its exclusivity rights."
Earlier this month Sprint sought a ruling by a Delaware Chancery Court that Clearwire is not in violation of its iPCS exclusivity arrangement.