The Sprint/Clearwire merger has already faced opposition from AT&T, who appealed to the FCC back in August to try to block the merger from going through. That issue hasn't yet been resolved, but Sprint and Clearwire have remained confident that their deal will go through by the time the year is up.
Yesterday, though, another kink in their WiMAX deployment arose. Illinois' iPCS is a service provider that serves around 640,000 subscribers in portions of Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee with Sprint service, and they are appealing to the Illinois Appellate court to stop Sprint from being able to partner with Clearwire in their service areas. They contend that the exclusivity provisions in their contract with Sprint should preclude them from being able to offer Sprint/Clearwire WiMAX service in the 80 markets to which they have the rights to provide Sprint service.
iPCS already has a precedent for successfully arguing against Sprint. Back in 2005, when Sprint acquired Nextel, iPCS convinced Illinois courts to block Sprint from being able to use Nextel's network in their contracted service area. Timothy M. Yager, president and CEO of iPCS explained their point of view on this new (very similar) issue in a news release:
“Over the past few years the exclusivity provisions of our affiliation agreements have been continually tested by Sprint, and we believe that it is appropriate and necessary to continue to defend our rights under the agreements. We firmly believe that the Illinois courts, including the Illinois Appellate Court, that have previously enforced our exclusivity protection will also find that this latest attempt by Sprint to compete with us in our territory is another violation of our agreements.”
If the courts agree with iPCS again - which seems very likely, given their contract and precedent for success in these cases - we're not sure what that will mean for WiMAX in that region. Surely Sprint will find a way to offer it to those markets, but on what time-frame? And how will it effect the deployment?
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