Clearwire bucks financial trend

Broadband fixed-wireless provider Clearwire Technologies followed a serendipitous path to almost $100 million in financing.

Clearwire forged a business relationship with the Instructional Television Fixed Service (ITFS) Spectrum Development Alliance to develop two-way, fixed-wireless systems for its member users and commercial interests in almost 100 cities across the U.S. At the same time, investors Goldman, Sachs & Co. and Liberty Associated Partners ponied up $97 million for Clearwire's buildout plans.

“There were a whole bunch of related deals that all happened at the same time,” said ITFS director John Schwartz. “We entered into capacity agreements with Clearwire, and we got paid money by Clearwire. Also, we're now investors and part owners in Clearwire.”

ITFS consumes 78 MHz of 120 MHz of bandwidth in the 2.5 GHz spectrum. After building digital two-way networks, Clearwire will “get to use some of the spectrum to provide commercial services” and will share those profits with ITFS, said Bob Wieneke, Clearwire's corporate relations vice president.

ITFS's two-way digital data delivery updates last-generation, one-way analog video and should help defray attempts to grab for its third generation spectrum. “There would probably be an awful lot of political backlash… since the ITFS spectrum license holders work with schools and nonprofits. That's motherhood and apple pie at its finest,” Wieneke said.

While reticent to make sweeping predictions about what the money will buy, Schwartz said “our dream and our objective is to build a national educational data network using the frequencies with the Clearwire deal as the heart of that.”