Could Sprint affiliate cause trouble for WiMAX in Grand Rapids?

For more coverage of the Sprint-Clearwire WiMAX venture, see Telephony’s Xohm topic page

Sprint’s problems with its CDMA affiliate iPCS continue. The Midwest regional operator succeeded last week in getting the courts to order Sprint to shut down its Nextel iDEN network throughout iPCS’s markets, and this week it nearly blocked Sprint’s plans to merge its WiMAX assets with Clearwire.

On Monday, an Illinois circuit court made iPCS withdraw an emerging restraining order on the Sprint-Clearwire deal. Like the problem iPCS is having over the Nextel iDEN network, iPCS claims that the deal would violate its affiliate agreement with Sprint, giving iPCS the sole right to offer Sprint-branded service in its operating footprint. Unlike the Nextel disagreement, though, neither Sprint nor Clearwire currently offer WiMAX or broadband wireless service in an iPCS market—yet.

While Sprint’s 2.5 GHz WiMAX licenses are concentrated in large metro markets, Clearwire owns licenses primarily in mid-sized and small markets, some of which overlap with iPCS’s networks. One of the biggest points of overlaps is Grand Rapids, Mich., a market in which Clearwire has already begun building WiMAX infrastructure and plans to commercially launch in 2009.

The court, however, didn’t invalidate iPCS’s complaints, giving it the right to re-file. Blocking the actual merger of assets is probably out of the question, as the Clearwire board is scheduled to vote on Thursday, the final step toward cementing the deal. But iPCS could try to block any attempt by the new Clearwire to launch service in any of its markets, including Grand Rapids. Clearwire said it does not anticipate a launch in any of iPCS territories before July 1, which likely means it will focus first on its other three launch markets: Atlanta, Las Vegas and Portland, Ore. But Clearwire also agreed to give iPCS 60 days notice before it did launch any network within iPCS’s territory, which would give iPCS plenty of time to file another restraining order in Grand Rapids. Sprint and Clearwire also promised not to use the closing of the deal as an argument against iPCS if the two find themselves back in court.