11.22.11

Sprint’s D-block ambitions

Posted in Regulatory, Spectrum at 10:32 am by timfarrar

Buried in the LightSquared FOIA disclosures is another very interesting (and hitherto unreported) story of Sprint’s plans to host the public safety D-block buildout, via a network sharing agreement based on the terms agreed with LightSquared. I highlighted back in June that it was strange of Sprint to mention hosting public safety (but not LightSquared) at the May 12 New America Foundation event. However, it appears that Sprint had been working in concert with the White House for several months to promote this concept, and had strong backing for this approach from Aneesh Chopra, the United States Chief Technology Officer, as recently as mid-September 2011.

Indeed it seems that a potential D-block opportunity may have been one of the items that Sprint hoped to highlight during its disastrous October 7 investor conference, but as far as I’m aware the government has not yet released the RFI on potential partnerships mentioned in the September discussion. A hosting deal may ultimately be another source of revenues for Network Vision, if the government can act soon enough on the D-block, but of course in the current political climate that is far from a foregone conclusion.

In the meantime it appears that Sprint is trying to avoid providing additional funding to Clearwire, in the hope that Clearwire will be able to meet its near term cash needs from other sources. Judging by Clearwire’s threat to not make its upcoming bond interest payment, it seems that may not be possible without an increased (and upfront) payment from Sprint. Thus, the outcome may ultimately be determined by who has the greatest amount of leverage in this negotiation. In particular, one critical factor may be whether Sprint believes Clearwire could play the @Home card, and threaten to turn off 4G service to Sprint customers after a bankruptcy filing (which would be a PR and customer relations disaster for Sprint), instead of WiMAX service continuing without interruption as Sprint asserted on October 7.

Of course, one thing that Sprint has proved time and again is that it is pretty poor at ending up on the winning side of a negotiated deal. However, it seems to be pretty poor at understanding the consequences of its actions as well, which makes it hard to predict where this will end up.

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