WASHINGTON -(Dow Jones)- Sprint Nextel Corp. (NYSE:S) (S) and Clearwire Corp. (NASDAQ-NMS:CLWR) (CLWR) have pledged to deliver wireless Internet access to public safety agencies and education institutions at speeds fast enough to accommodate two-way video conference calls or multiplayer games, the two companies said in a Federal Communications Commission petition for approval of their proposed merger.
The petition, which was filed Friday and made public Monday, said the wireless broadband speeds that the new network will offer are now only available through cable and landline networks.
Sprint Nextel (NYSE:S) has deployed its wireless Internet service in Baltimore, Chicago, and Washington, D.C.
The merged company, which will be called Clearwire Corp., or "New Clearwire," plans to go head to head with "larger, more powerful competitors" such as AT&T Inc. (NYSE:T) (T) and Verizon Communications Inc. (NYSE:VZ) (VZ) in the wireless arena and the more traditional landline Internet market.
Incumbent companies like Verizon and AT&T are "likely loathe to deploy wireless broadband in a manner that would cannibalize their landline business," Sprint and Clearwire wrote in their FCC filing.
A sizable chunk of Sprint airwaves is in areas that are designated for educational broadcasting. Sprint leases the unused portion of that space for commercial purposes. Sprint Vice President of Government Affairs Larry Krevor said educators have not been able to take full advantage of the segment because its current Internet infrastructure is weak.
But Sprint and Clearwire said they would be unable to build the wireless Internet network if their proposed merger is not approved. "Neither Clearwire nor Sprint currently has market power in the provision of broadband services," the FCC petition said.
Touching on another issue in which FCC Chairman Kevin Martin has expressed interest, Sprint and Clearwire promised to make the new wireless network accessible to all devices from any manufacturer. The open network would allow customers to select from a wide variety of rate plans without having to purchase special equipment from New Clearwire itself, the petition said.
The FCC imposed similar open network requirements in its recent auction of a block of television airwaves that will be available next year. That mandate was spurred in part by Google Inc. (NASDAQ-NMS:GOOG) (GOOG), which placed high bid for the spectrum to advocate for the openness clause. Google ultimately was outbid, but the openness requirement remained intact.
Sprint and Clearwire hope to close their deal and begin building their new wireless network by the end of the year, but they must first win approval from the FCC and the Justice Department.
Sprint has not yet filed its antitrust petition with DOJ, but Krevor said it will submit that confidential document in the next few days.
An FCC spokesman said the commission has received the merger proposal and it is under review.
It is not clear that either DOJ or the FCC will rule on the proposed merger within Sprint and Clearwire's preferred timetable.
Analysts view the proposed merger between Sprint and Clearwire as a good move, but they say it may not be enough to rescue Sprint from troubles relating to its aquisition of Nextel and its FCC mandate to vacate certain airwaves near public safety channels.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
(END) Dow Jones Newswires 06-09-08 1707 Copyright (c) 2008 Dow Jones & Company, Inc.
