Clearwire taught a funding lesson

(Telephony) Serendipitously, wireless provider Clearwire Holdings recently picked up $97 million in additional financing at the same time it announced a strategic relationship with the Instructional Television Fixed Service Spectrum Development Alliance (ITFS).

The financial commitment, which was led by Goldman Sachs & Co. and Liberty Associated Partners, will help establish Clearwire as a serious wireless player in the licensed and exempt bands and will help push ITFS into next-generation technologies for distance learning and other non-profit applications.

“It’s one of those interesting things,” Bob Wieneke, Clearwire’s vice president of corporate relations said about the funding/ITFS confluence. “At the time we began (financial) discussions, it was about Clearwire and about funding our rollout to do this broadband wireless. Then along came the ITFS Spectrum Alliance also looking for funding to try to do something with their spectrum, and Goldman was prescient enough and the timing was right enough. It’s like the two-heads-are-better-than-one theory.”

The ITFS relationship is multipronged, Wieneke said. Primarily, Clearwire will support the educational alliance with two-way digital capability to supplant existing one-way analog.

“This allows distance learning and all kinds of advanced services,” Wieneke said. “In return, we get to use some of the spectrum to provide commercial services to some of our target markets, the smaller/medium businesses.”

Clearwire provides small/medium businesses with Internet access via IP point-to-point and point-to-multipoint in the unlicensed band at 2.4 GHz.

“The only real change in our business proposition is now we have access to some licensed spectrum through the ITFS alliance,” he continued.

ITFS controls spectrum from Pennsylvania to Hawaii and Alaska, covering about 100 markets. That spectrum continues to attract hungry glances from outsiders. For instance, the FCC looked at the spectrum for 3G “but I think there would probably be an awful lot of political backlash … since the ITFS license holders work with schools and non-profits,” Wieneke said. “That’s motherhood and apple pie at its finest.”

What makes the ITFS spectrum attractive to Clearwire is its mainstream use for schools and non-profit institutions, but the ability to lease portions of the spectrum to commercial operators. That’s where ITFS gets its money and where Clearwire will make its profit.

“We will be rolling out to the markets where the spectrum becomes available,” Wieneke promised. “We also … know what it’s going to take to cover it and the business population.”