AT&T tries to halt WiMax joint venture

AT&T challenges WiMax joint venture

by Marguerite Reardon, CNET

AT&T is looking to halt the proposed merger of Sprint Nextel's nationwide WiMax assets with those of Clearwire. On Thursday, the phone company filed a petition with the US Federal Communications Commission, asking it to deny approval of the merger.

Sprint Nextel announced in May that it was teaming up with Clearwire to form a new joint venture that would combine both companies' WiMax assets to create a nationwide broadband wireless network. The deal, which has been valued at about $14.5bn (£7.3bn), is being backed by cable operators Comcast and Time Warner, as well as Intel and Google.

The FCC, which is currently reviewing the merger, must give its blessing for the deal to be completed.

In its filing, AT&T argues that the proposed merger, "openly state[s] that they (Sprint Nextel and Clearwire) intend to compete with other national wireless providers — including AT&T — yet they fail to make the required showings necessary for the commission's review."

AT&T itself exists in its current state because of several massive mergers in the past few years, including the multibillion dollar merger between AT&T and BellSouth, which put full ownership of the wireless operator under one owner, and the purchase of wireless assets from rural operator Dobson Communications last year.

AT&T is currently still deploying 3G technology throughout its territory, and is busy upgrading its existing network. But it is years away from taking the next big leap toward building a 4G network, which will use a competing technology known as Long Term Evolution, or LTE. By contrast, WiMax technology is available and working today.

Meanwhile, regardless of the outcome of the merger, Sprint expects to launch its first WiMax deployments in September. Also, devices supporting WiMax have already been developed and will hit the market by year's end.

Analysts still aren't sure whether WiMax will survive in the long run as a mobile technology in the US. Yet AT&T's latest moves indicate that it may be concerned that the new Clearwire network, with backing from heavyweights such as Intel and Google, could get enough traction to threaten its current and future wireless business.