Is Verizon Interested In Clearwire?

Verizon Wireless reportedly has offered $1 billion to $1.5 billion to acquire some of Clearwire’s spectrum leases, possibly complicating Sprint Nextel’s attempt to buy out the company in conjunction with its acquisition by Softbank.

Clearwire is struggling financially but owns broad swaths of spectrum, the lifeblood of wireless networks. The April 8 bid from “Party J,” which Clearwire disclosed in a Securities and Exchange Commission filing on Friday, is the latest in a series of offers for its spectrum licenses. Unnamed people familiar with the matter identified “Party J” as Verizon Wireless, according to a report in The Wall Street Journal.

Clearwire is a key part of a complicated set of possible transactions that could make a much stronger competitor out of Sprint, the country’s third-largest mobile operator. Sprint already owns roughly half of Clearwire and is bidding about $2.2 billion to buy the rest of its stock. That deal depends on Softbank’s planned $20.1 billion offer for 70% of Sprint, which is still undergoing regulatory review.

Clearwire holds 150MHz of spectrum or more in most major markets of the U.S. Verizon would buy only a portion of that spectrum. “Party J offered to acquire Clearwire spectrum leases generally located in large markets,” Clearwire said in the Friday filing, a proxy statement to shareholders on the Sprint buyout bid. The proposed gross price of $1 billion to $1.5 billion would be reduced by what Clearwire pays for the leases, which could be substantial, according to Clearwire’s filing. The company said it would discuss the offer with “Party J” and Sprint.

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Broadcom Goes UltraHD

As TV manufacturers show off UltraHD TVs at CES, communications chip maker Broadcom is introducing the guts of future gateways that will be able to deliver video for those sets into viewers’ homes.

Broadcom’s BCM7445 silicon platform, announced just hours before the show opened on Tuesday morning, will be able to process incoming video from cable, carrier and satellite services that has four times the resolution of typical 1080p video offered today, according to the company.

Like the eye-catching but expensive TVs on the show floor in Las Vegas, the BCM7445 is just one of the first of many steps to consumers watching UltraHD shows at home. New content, displays and delivery technologies will all be required for the new resolution, which is also known as 4K.

Broadcom expects its chip to be in volume production by the middle of next year, in time for mainstream UltraHD TVs that will probably hit the market for the late 2014 holiday season, said Joe Del Rio, associate product line manager at Broadcom. However, service providers, which will probably be the distributors of most of the gateways built with the BCM7445, may take longer to start sending UltraHD video to their subscribers, Del Rio said.

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at@t Wants More

AT&T plans to buy NextWave Wireless, a holder of spectrum that could be used for mobile data services, for about $600 million.

NextWave owns licenses for spectrum in both the WCS (Wireless Communications Services) and the AWS (Advanced Wireless Services) band. AT&T said in a press release it plans to use that spectrum to feed “skyrocketing” demand for mobile data, but it will have to wait for an ongoing Federal Communications Commission review before it can take advantage of the WCS band.

The FCC auctioned WCS spectrum in 1997, but it has not been used for mobile data because of rules designed to prevent interference with satellite users in adjacent bands, AT&T said. In June, AT&T and satellite radio company Sirius XM filed a proposal to the FCC for using WCS while protecting the nearby satellite users, but the agency is still reviewing that plan. If it is approved, AT&T hopes to start using the WCS band in about three years.

The NextWave deal is only the latest in a series of moves by big mobile operators to secure more spectrum. AT&T characterized its proposed merger with T-Mobile USA last year, which was opposed by the FCC and other regulators, as first and foremost a deal to acquire spectrum. Verizon Wireless announced a deal earlier this year, which is still under FCC review, to acquire unused wireless licenses from major U.S. cable operators.

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Sprint Ending Lightsquared Relationship

Sprint Nextel will end its planned 15-year 4G network relationship with would-be hybrid network operator LightSquared, the Wall Street Journal reported on Thursday.

The end of the Sprint partnership, which was due to expire on Thursday, would be nearly as big a blow to the foundering LightSquared as the U.S. Federal Communications Commission’s proposal last month to revoke the carrier’s authorization to build a land-based network.

Since the deal was announced last July, Sprint had been planning to host LightSquared’s radio spectrum on its Network Vision infrastructure. LightSquared was to pay Sprint US$9 billion in cash for that hosting and said the plan would save it $13 billion over eight years.

For its part, Sprint had looked to the partnership for extra spectrum on which to run its own planned LTE network. It would get $4.5 billion worth of credits to use some of LightSquared’s spectrum in addition to its own and that of longtime partner Clearwire. Sprint extended the deal twice to give LightSquared more time to win FCC approval for its network.

Sprint will terminate the LightSquared deal on Friday and return $65 million in prepayments by LightSquared, according to the Journal.

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FCC Changes Phone Policy

The U.S. Federal Communications Commission has approved an overhaul to its Lifeline program, which subsidizes telephone service for economically disadvantaged people. The goals are to save money and allow the subsidy to be applied toward broadband service.

The FCC on Tuesday voted to make several changes to the program, including the launch of a $25 million pilot program to use Lifeline for broadband. The pilot program will solicit proposals from broadband providers starting this year, the FCC said. Under the changes approved by the commission, recipients of Lifeline subsidies could use the money for bundled services, including voice and broadband packages.

In addition, the FCC set a 2012 savings target of $200 million for the program, which costs about $2.1 billion a year, and the commission will create a national Lifeline database to prevent multiple telecom carriers from receiving program support for the same consumer. Critics of the program have complained that there’s significant abuse, with recipients getting subsidies for multiple phone and mobile lines.

The FCC will also create an eligible database, using government data, focused on verifying recipients’ initial and ongoing eligibility for the program. The database should reduce the potential for fraud and cut red tape for both recipients and carriers, the FCC said.

Commissioners set a goal of saving up to $2 billion over the next three years, but Commissioner Robert McDowell, a Republican, said he doubted the FCC can achieve that goal. McDowell questioned the “assumptions and models” FCC staff used to predict the savings.

Nevertheless, McDowell voted to approve the changes. The changes will help Lifeline better fulfill its purpose of helping low-income U.S. residents stay connected, he said.

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The FCC Gives AT&T The OK

The U.S. Federal Communications Commission approved AT&T’s US$1.9 billion buying of spectrum from Qualcomm on Thursday, allowing the carrier to salvage one ambitious deal to acquire more spectrum, after squashing its planned merger with T-Mobile USA.

AT&T announced its plan to buy the Qualcomm spectrum last December, a few months before it revealed the much larger proposal to merge with T-Mobile for $39 billion. It said both were motivated by the need for more radio spectrum to increase the coverage and capacity of its LTE (Long-Term Evolution) network. AT&T withdrew the T-Mobile plan on Monday after the FCC, the Department of Justice and others said it was not in the public interest.

With the Qualcomm purchase, AT&T will get 6MHz of spectrum across the country in the coveted 700MHz band, as well as another 6MHz of spectrum in five major metropolitan areas: New York, Boston, Philadelphia, Los Angeles and San Francisco, according to the FCC’s order released Thursday. Those five markets represent about 70 million potential subscribers. The carrier has said it plans to use it as a supplemental downlink for its LTE network, allowing for faster and more consistent mobile data service.

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Does LightSquared Interfere With GPS?

A second round of tests on LightSquared’s proposed land-based mobile data network again showed interference with a majority of GPS devices, except for cellphones, two U.S. federal departments stated Wednesday.

LightSquared wants to build a network of 4G LTE (Long-Term Evolution) base stations around the U.S. that would operate on frequencies close to those used by GPS (Global Positioning System) receivers. But the U.S. Federal Communications Commission (FCC) will not approve the company’s plan unless potential interference with GPS has been resolved. Tests earlier this year showed the network could cripple many GPS devices.

The second round of tests was conducted last month and concentrated on LightSquared operating in a lower block of frequencies farther from those used by GPS.

“Preliminary analysis of the test findings found no significant interference with cellular phones,” the Department of Defense and Department of Transportation said in a statement on Wednesday. “However, the testing did show that LightSquared signals caused harmful interference to the majority of other tested general purpose GPS receivers. Separate analysis by the Federal Aviation Administration also found interference with a flight safety system designed to warn pilots of approaching terrain.”

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at&t Vows To Continue Quest

AT&T Inc plans to forge ahead with its deal to acquire Deutsche Telekom’s U.S. wireless unit despite regulatory opposition, and it has the financial resources to close the acquisition quickly, a top executive said on Wednesday.

“We continue to move forward with our efforts to complete the T-Mobile transaction…and we will continue to pursue the sale,” AT&T Chief Financial Officer John Stephens said at the UBS media conference in New York.

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White House Threatens Net Veto

The executive office of U.S. President Barack Obama stated Tuesday that the White House strongly opposes passage in the Senate of a resolution that could impact the equal availability of the Internet to all classes of users.

The resolution introduced in the Senate disapproves a rule submitted by the Federal Communications Commission in December on the net neutrality issue, and states that it should have “no force or effect”.

If the President is presented with the resolution, S.J. Res. 6, which would not safeguard the free and open Internet, his senior advisers would recommend that he veto it, the administration said.

The FCC Report and Order adopted the rule that fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic”. A “no blocking” rule states that fixed broadband providers may not block lawful content, applications, services, or non-harmful devices. Mobile broadband providers are also prohibited from blocking lawful websites, or block applications that compete with their voice or video telephony services.

The U.S. House of Representatives has already passed in April a Republican-backed resolution disapproving the FCC rules, and asking for their roll back.

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RIM’s Troubles May Not Be Over

Law firms in the United States and Canada are considering possible consumer lawsuits against Research In Motion Ltd for last week’s BlackBerry outages, which for three days crippled email and messaging for tens of millions of users around the world.

Consumer lawyers say they are investigating whether customers have common claims against the BlackBerry manufacturer and might be able to band together in a single lawsuit.

While the outage did not rise to the level of seriousness comparable to a dangerous medication or tainted food, it inconvenienced and angered customers. Frustrated BlackBerry users, turning to blogs, message boards, Twitter and Facebook, complained about losing important emails and missing meetings last week.

Law firms are considering breach-of-contract or consumer-fraud claims, attorneys said.

A breach-of-contract claim could argue the company failed in its obligations to provide service and could include carriers for BlackBerry service as additional defendants, said attorneys exploring litigation against RIM.

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