The rationale behind AT&T's petition is basically that the deal requires more scrutiny. Their official statement on the matter, sent to us by an AT&T spokesman, is that, "While AT&T does not fundamentally oppose the underlying transaction, Sprint and Clearwire should be required to demonstrate that its merger serves the public interest just like any other providers would have to do." Specifically, a significant chunk of the 2.5GHz spectrum their network will run on is actually leased from the schools and non-profits (which use it for the Educational Broadband Service).

According to Ars, AT&T is arguing that if you count the spectrum holdings Sprint and Clearwire lease from the EBS license holders, they pass the threshold requiring a "competitive analysis" of what the spectrum landscape would look like post-merger, which they don't have in their merger filings. Even though, as Ars points out, when AT&T bought Dobson Communications last year, they said EBS spectrum didn't really count.

So, it has to be asked—is AT&T finally scared of WiMax? [Ars Technica]

As Ars points out, it seems to be the "third pipe" many hoped that the 700MHz auction would deliver (before Verizon snapped up the open access C block)—that is a third, totally open broadband alternative to cable and DSL that would provide some competition and shake up the established players.

New Clearwire's WiMax network will also be available for "non-exclusive" wholesale, meaning anyone can buy resell Clearwire's WiMax services under their own brand—basically as an MVNO—which Sprint, Comcast, Time Warner Cable and Bright House Networks have already signed up for, with the cable companies interested in offering quadruple play services (cable, internet, phone, wireless internet). Course, all this still depends on WiMax getting off the ground and then not getting trounced by LTE. [Ars]

P.S. WiMax, LTE and more explained here.

From the cable companies, you'll be seeing some quadruple play action, with them offering WiMax and 3G bundles with their services. For Intel's part, they'll be pushing WiMax in the Centrino 2 chipsets (as expected). And Google will be leading development of internet and advertising services, in addition to being Sprint's new default search on mobile phones. This whole thing is kind of amazing, actually : WiMax has gone from being a sure-fire also-ran to suddenly viable in a matter of weeks. Still a long road ahead, but they're in much better shape than it seemed even a week ago.

KIRKLAND, Wash. and OVERLAND PARK, Kan. - May 7, 2008 - Clearwire Corporation (NASDAQ: CLWR) and Sprint Nextel Corporation (NYSE: S) today announced that they have entered into a definitive agreement to combine their next-generation wireless broadband businesses to form a new wireless communications company.

The new company, which will be named Clearwire, will be focused on expediting the deployment of the first nationwide mobile WiMAX network to provide a true mobile broadband experience for consumers, small businesses, medium and large enterprises, public safety organizations and educational institutions. The new Clearwire expects to dramatically enhance the speed and manner in which customers access all that the Internet has to offer at home, in the office and on the road.

Sprint and Clearwire also announced today that five innovative technology, content and communications leaders
- Intel Corporation (NASDAQ: INTC) through Intel Capital, Google Inc. (NASDAQ: GOOG), Comcast Corporation (NASDAQ: CMSCA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Bright House Networks - have collectively agreed to invest $3.2 billion into the new company. The investment by the five strategic investors will be based on a target price of $20.00 per share of Clearwire's common stock, subject to a post-closing adjustment. This adjustment is based upon the trading prices of new Clearwire common stock on the NASDAQ Market over 15 randomly selected trading days during the 30-trading day period ending on the 90th day after the closing date. The price per share will be based upon the volume weighted average price on such days and is subject to a cap of $23.00 per share and a floor of $17.00 per share. In addition, Trilogy Equity Partners, led by wireless veteran John Stanton, will invest directly in the new Clearwire's common stock.

Upon completion of the proposed transaction, Sprint will own the largest stake in the new company with approximately 51 percent equity ownership on a fully diluted basis assuming an investment price of $20.00 per share. The existing Clearwire shareholders will own approximately 27 percent and the new strategic investors, as a group, will be acquiring approximately 22 percent for their investment of $3.2 billion, both on a fully diluted basis assuming an investment price of $20.00 per share.

Sprint and Clearwire also announced a series of commercial agreements with the strategic investors, including 3G and 4G wholesale agreements.

"For Sprint shareholders, this is an opportunity to unlock and bring visibility to the value of our significant spectrum assets, technology and expertise, by leveraging the technology, applications and distribution strengths of our investors, who together command nearly a half- trillion dollars in market capitalization," said Dan Hesse, president and chief executive officer of Sprint. "We've made an excellent start developing XOHM WiMAX services. Contributing those advances to a strongly backed new company - in which we'll hold the largest interest - provides Sprint with additional financial flexibility and allows Sprint management to leverage and focus on our core business.

"Additionally, the agreements allowing the new company and our cable company investors to bundle and resell Sprint's third-generation wireless services strengthen the distribution of our current services while reducing the complexity and enhancing Sprint's cable relationships,"Hesse added.

Clearwire Chairman Craig O. McCaw, said, "The power of the mobile Internet, which offers speed and mobility, home and away, on any device or screen, will fundamentally transform the communications landscape in our country. We believe that the new Clearwire will operate one of the fastest and most capable broadband wireless networks ever conceived, giving us the opportunity to return the U.S. to a leadership position in the global wireless industry."

Benjamin G. Wolff, chief executive officer of Clearwire, said, "The combination of robust next-generation mobile WiMAX technology and nationwide spectrum that we believe is optimal for delivering mobile broadband services - coupled with substantial new financial resources, a team of experienced wireless industry veterans, and distribution and technology agreements with some of our nation's leading communications, technology and content companies - creates what I believe to be a once-in-a-lifetime opportunity.

"Given the complexity of this transaction, we have taken the time and effort to do it right, by thoughtfully leveraging the resources and opportunities that we and our investors are bringing to the table. This transaction is tremendous news for the entire Clearwire team - our shareholders, our customers and our employee-partners, and we look forward to partnering with the talented team from XOHM to achieve our shared vision," Wolff added.
The strategic investors are among the nation's leaders in communications technology, chipset development and Internet advertising, content and distribution. It is expected that the new Clearwire will have a time-to-market advantage over competitors in fourth-generation services, supported by strong spectrum holdings and a national footprint. Further, it will build on the strong foundation of Clearwire's rapidly growing subscriber base of nearly 400,000 wireless broadband customers as of year-end 2007, as well as Sprint's continued XOHM WiMAX network build-out in certain markets throughout this year.

"This agreement is a historic step forward for WiMAX as it represents the first nationwide deployment of a next-generation mobile broadband Internet in the U.S.," said Paul Otellini, Intel president and CEO. "The agreement also signifies growing industry support for WiMAX. Given its flexibility, coverage and speed, WiMAX will enable the mobile Internet and is already opening doors to a host of new and exciting applications, devices and business models around the world."

"Google is a firm believer in supporting new ways for people to access the Internet," said Eric Schmidt, chief executive officer and chairman of Google. "We are proud to invest in the new Clearwire alongside several leading technology and communications companies, and we believe that its planned WiMAX network will increase the ability for users to get high-speed broadband anytime, anywhere."

"This is a great coalition of innovative companies that have joined together to create the next generation of mobile wireless products. It is exciting to be on the ground floor of this new venture that we believe will create unprecedented high-speed wireless products and make them available across the nation," said Brian L. Roberts, chairman and chief executive officer of Comcast Corporation. "This transaction is attractive to us strategically and financially and puts in place very attractive wholesale relationships for access to Sprint's existing 3G and Clearwire's 4G networks, giving us complete flexibility to introduce wireless mobility in terms of product innovation and deployment."

"This exciting new venture enables Time Warner Cable to help shape the next generation of wireless services in ways that will complement and enhance our products and services," said Glenn Britt, Time Warner Cable's president and chief executive officer. "We're committed to giving our customers more control over how and where they can easily connect to what's important to them - entertainment, information, and each other. The agreements we're announcing today are a financially prudent way for us to add mobility to our offerings when our customers demand it."

"We are pleased to join our fellow cable operators as well as the new technology and wireless investors in this strategic venture. This broadband wireless relationship will help us to continue to provide the best possible competitive services for our customers, today and in the future. It is consistent with our commitment to delivering customers the products and services that they desire, whenever and wherever they want," said Robert J. Miron, chairman and chief executive officer of Bright House Networks.

The new Clearwire expects to offer mobile wireless Internet services on a broad array of new devices that will be made possible by integrated WiMAX chipsets, scalable operating expenses and a commitment to an open architecture.

Mobile WiMAX is a standards-based wireless broadband technology designed to operate multiple times faster than today's 3G wireless networks. With embedded WiMAX chipsets in laptops, phones, PDAs, mobile Internet devices and consumer electronic equipment, mobile WiMAX technology is expected to allow users to wirelessly access a range of multimedia applications, such as live videoconferencing, recorded video, games, large data files and more - anywhere in the network coverage area.

The transaction has been approved by all of the parties' boards of directors, and is expected to be completed during the fourth quarter of 2008. The transaction is subject to various closing conditions including, but not limited to, the approval of Clearwire's stockholders, and receipt of regulatory approvals, including the approval of the Federal Communications Commission and clearance under the Hart-Scott-Rodino Act.
Governance

The new Clearwire's board of directors will be comprised initially of 13 members, including seven directors to be named by Sprint of whom at least one will be independent; four named by the strategic investors of whom at least one will be independent; one named by Eagle River, the private investment company controlled by wireless pioneer Craig O. McCaw; and one independent member to be nominated by the new company's Nominating Committee.

The parties currently expect Craig McCaw to serve as non-executive chairman of the board. Along with McCaw, other directors expected to serve for an initial one-year term as new Clearwire board members are Dan Hesse, Sprint's president and CEO, Brian Roberts, Comcast's chairman and CEO, and Glenn Britt, Time Warner Cable's president and CEO. In addition, John Stanton, chairman and CEO of Trilogy Equity Partners and former chairman and CEO of VoiceStream and Western Wireless, is expected to serve on the board.

Overview of the New Clearwire
The new Clearwire will apply for listing of its common stock on the NASDAQ under the ticker "CLWR." The management team will be led by Benjamin G. Wolff, currently CEO of Clearwire, as the new company's CEO and Barry West, currently Sprint's Chief Technology Officer and XOHM business unit leader, as president of the new Clearwire. Staffing for the new Clearwire will include the talent from both Clearwire and Sprint's XOHM business unit. The headquarters of the new Clearwire will be located in Kirkland, Wash. The new company will continue to have a significant employee presence, including research and development, in Herndon, Va.

The investment by Intel Capital, Google, Comcast, Time Warner Cable and Bright House Networks will be used to advance the development of the new Clearwire's mobile WiMAX network. This nationwide footprint is underpinned by the substantial next-generation wireless broadband spectrum portfolio that Sprint and Clearwire collectively hold in the United States. The combined wireless spectrum should allow the new Clearwire to achieve greater coverage, cost and operational efficiencies, and bandwidth-utilization than either company could by operating alone. The new Clearwire is targeting a network deployment that will cover between 120 million and 140 million people in the U.S. by the end of 2010.

In addition to spectrum, Sprint will contribute to the new Clearwire certain hardware, software and all of its WiMAX-based trademarks and other WiMAX-related intellectual property. The new Clearwire expects to materially reduce capital and operating expenditures by leveraging Sprint's existing infrastructure, reducing the cost of building out the mobile WiMAX network nationwide. The new Clearwire expects to utilize Sprint's towers, fiber network and IT support at favorable bulk rates. Sprint also will realize cost savings for its core business by sharing certain costs of towers and other infrastructure.

The agreements with the strategic investor group define significant new commercial relationships, including:

* Intel will work with manufacturers to embed WiMAX chips into Intel® Centrino® 2 processor technology-based laptops and other Intel-based mobile Internet devices, and will market the new company's service in association with Intel's performance notebook PC brand.
* Google will partner with the new Clearwire in the development of Internet services, advertising services and applications for mobile WiMAX devices. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire's retail product.
* Google will partner with the new Clearwire on an open Internet business protocol for mobile broadband devices. The new Clearwire will support Google's Android operating system software in its future voice and data devices that it provides to its retail customers.
* Sprint, Comcast, Time Warner Cable, and Bright House Networks will enter into wholesale agreements with the new Clearwire, becoming 4G providers of new Clearwire's mobile WiMAX service.
* Comcast, Time Warner Cable, and Bright House Networks and, after completion of the transactions, the new Clearwire, will enter into 3G wholesale agreements with Sprint, becoming bundled providers of Sprint's wireless voice and data services, expanding the reach of Sprint's network to more customers, while providing the cable companies a simpler, more effective vehicle to bundle wireless services.
* Sprint and Google have also entered into an agreement related to Sprint's mobile services, whereby Google will become the default provider of web and local search services, both of which will be enabled with location information, for Sprint. Sprint will also preload several Google services - including Google Maps for mobile, Gmail and YouTube - on select mobile phones and provide easier access to other Google services.
* Google and Intel have options to enter into 3G and 4G wholesale agreements with Clearwire and Sprint respectively and have no current plans to do so.

He puts the deal value at $12 billion all told, with a billion from Comcast, (another) one billion from Intel and half billion each from Time Warner and Google. The other new nugget is the updated timeframe for WiMax: Two years, meaning it'll effectively arrive at the same time as LTE from AT&T and Verizon, making WiMax's uphill battle that much steeper. That said, we'd consider changing "may not be easy for the group to create a wide-ranging and adequately reliable service" to "big ego clusterfuck."

Update 2 The Wall Street Journal brings more color (like that Comcast roped Time Warner into the deal Sprint's request) and more of the human story, odd for usually cold Journal, focusing on surprisingly affable (almost cheery given Sprint's situation) Sprint CEO Dan Hesse: "It's sort of like, 'Dan, you haven't vacuumed the bedroom,"' Mr. Hesse said. "Well, that's because the house is on fire. I will get around to it later." It's not behind the subby wall, so if you've gotten this far into the post, you should read it. [Fortune]

• When the rollout is already slower than people initially hoped, the aforementioned delays are never good.

• Aside from the Nokia N810, Asus Eee PC and Everex Cloudbook, Xohm lacks any mainstream WiMax-compliant devices, and we were hoping CTIA 2008 would be a good time to hear about them. An infrastructure is only as good as its end-user products (and vice-versa).

• Speaking of that, where are Intel's WiMax-compatible chips? What about the 20% of 2008 devices scheduled to have WiMax? What about the Montevina chipsets allegedly eagerly awaited by Lenovo, Acer, Asus, Panasonic and Toshiba? WiMax needs some love from its $2 billion champion.

• Xohm partners we spoke to were under the impression that a full Xohm demo would be set up for CTIA. However, Wired's Joe Brown attended Nokia's press conference and noted the N810 WiMax Edition Tablet was demoed over Wi-Fi. What's up with that?

• Similarly, while previewing the N810's HAVA Player at Nokia's booth, the Hava rep told me he was using Wi-Fi for demos because the Xohm booth just across the hall didn't have a strong enough WiMax signal. Laptop Magazine even suffered dropped connections inside the Xohm booth. What ever happened to 10Mbps at 10 kilometers?

• The WiMax demos that did work seemed promising, but the people running the booth operated with a healthy amount of paranoia. We weren't allowed to get too hands-on and they tried to kill our photos, suggesting perhaps things weren't as fully functional as they seemed.

• An early WiMax service rolled out in Australia last month suffered an EPIC FAIL, quickly closed up shop and prompted the CEO to say "WiMax may not work." Could Xohm be suffering from similar problems?

• WiMax's direct 4G competition, LTE, chosen by America's two biggest and most powerful wireless carriers, already seems to be gaining steam, not to mention showing well in recent demos.

So guys, anything we can do to help? I want the future of technology to actually make it to the future. Lord knows I'd feel better knowing I could play World of Warcraft lag-free while sitting in the middle of the Mojave Desert, not that I own WoW or plan to visit the Mojave Desert, but you never know. Seriously, just give me my damn WiMax already!!

Signed,
Adrian Covert

Especially since it seems unlikely that Best Buy or Google will heed their sorta desperate call for cash. Google's got 700MHz spectrum on its plate, and logically, WTF would Best Buy want with WiMax? Intel's already heavily invested and support will be in their next mobile chipset, so it makes sense they would toss more money into the massive, sucking hole that will be the Sprint/Clearwire venture. [The Street via Broadband Reports]

According to reports in the Wall Street Journal, Sprint is also talking with Intel, Google, and Best Buy to help get the WiMax project off the ground. Sprint could use the extra support given that business has taken a significant downturn as of late—and the $5 billion it would take to get WiMax running is a serious chunk of change. Only time will tell if Sprint's smooth talking will lure Clearwire back into the fold. Keep in mind that a Sprint exec has claimed that WiMax will launch in April. [InformationWeek]

While Sprint's not in dandy shape, this is a bigger blow to Clearwire, the smaller of the two companies, which might need a hot cash injection from WiMax-backers like Intel to stay on track. Sprint "has given no indication that it will halt its WiMax plans altogether," but it seems more than likely we'll see some significant alterations of their plans along the lines of cost-cutting, given that money's not growing on cellphone towers for them right now, and $5 billion's a hefty bill to foot to go it totally alone on an unproven venture. [WSJ]

Other possibilities include enticing new investors to pump more cash into their WiMax division, buying Clearwire or locking up their sort-of deal from earlier this summer. But, anything involving fireworks will have to wait until a new, permanent CEO jumps into the mix, which could take a while. [WSJ]

There'll be a "soft launch" by year's end in Chicago and Baltimore/Washington, D.C., with coverage of 100 million people (Sprint 70, Clearwire 30) by the end of 2008. Even though Sprint's putting a lot of eggs into one basket with a dumb name, it's one that promises a huge payoff if everything goes according to plan—and well, if we bite. [WSJ (login req'd) and Reuters]

With its WiMAX service, Clearwire targets two markets: those who are out of the reach of wired broadband service and those who are looking for an alternative to cable and DSL providers. The bundled service is inteded to make its offering more attractive to the latter group.

Seems like a meshing of two separate interests combining for their mutual benefit. Kind of like how Slowpoke and Shellder combine to form Slowbro, which helps both of them. Holy shit, did I just compare satellite TV and WiMAX to Pokemon? – Jason Chen

Satellite TV guys say: why not WiMAX [Ars Technica]

Image credit Sci Fi and Matt Krueger

Clearwire got the FCC okay to support a wireless card on its 802.16e wireless network. Our guess is that it will be this Motorola Expedience card, which Clearwire itself designed before selling that hardware division to Moto. The card likely won't be out till late this year so there's no word on pricing. What we do know is that when it does come out, it'll only play nice with Vista and Windows XP. – Louis Ramirez

Press Release [via DailyWireless.org]