WASHINGTON-- The FCC approved the merger of Sprint Nextel's Xohm WiMAX business with the Clearwire Corp. to create the new Clearwire, saying that it would foster competition in the mobile broadband arena and accelerate buildout of advanced technologies.
The FCC voted unanimously to approve the deal on the basis that no competitive harm would result from the deal, since Clearwire is not a competitor of Sprint Nextel and the WiMAX technology the new company will use will compete with incumbent wireless players.
Commissioner Deborah Taylor Tate said the competitive analysis of the deal was straightforward and that the new company "could be a textbook example of the new third pipe we have been looking for."
Sprint and Clearwire Corp. announced in May that Sprint would be merging its Xohm business with Clearwire to create a new company. The new company, also called Clearwire, will have a $3.2 billion investment from Intel, Google, Comcast, Time Warner Cable, Bright House Networks and Trilogy Equity Partners.
The deal is complex and has many moving parts. Sprint will contribute its 2.5 GHz spectrum to the new company in exchange for an ownership stake, and though it will not be involved in the day-to-day operations of the company, it will have a say in the company's portfolio and roll-out strategy. Current Clearwire CEO Ben Wolff will retain that title, and Barry West, the president of Xohm, will be the Clearwire's president. The company will be headquartered in Kirkland, Wash., with a satellite office in Herndon, Va., for research and development.
Sprint and Clearwire had been looking forward to the decision for months. Wolff said last month that he expected the deal to pass and saw no reason why it wouldn't. "If you take a look at what the merger transaction accomplishes, it really accomplishes so many of the major policy objectives that both Democrats and Republicans on the Hill have had as well as at the FCC," he said Oct. 15 during FierceWireless' virtual event, The Future of 4G. "It's frankly hard to find fault with the transaction from a regulatory perspective."
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