Judge gives Sprint more time to shed Nextel after IPCS suit
Sprint Nextel Corp. was granted a 180-day extension of time to comply with an Illinois judge's order to shed Nextel operations in four Midwestern states because they infringe the rights of IPCS Inc.
The Illinois Supreme Court, in a ruling posted yesterday on its Web site, rejected Sprint's second bid to appeal Circuit Court Judge Thomas Quinn's 2006 decision. The court doubled the time for compliance, requiring Quinn to issue a new order.
``The decision was not unexpected,'' Sprint spokesman Matt Sullivan said in a telephone interview today. ``The focus of our petition for reconsideration was on the remedy.''
IPCS, based in Schaumburg, had sued Sprint, the third-biggest U.S. mobile-phone service provider, claiming its acquisition of Nextel in 2005 violated agreements that made IPCS the exclusive provider for Sprint in Illinois, Michigan, Iowa and parts of Nebraska.
Quinn agreed with IPCS. After a 25-day trial, he ordered Overland Park, Kansas-based Sprint to divest operations in the four states, citing IPCS' $300 million investment in infrastructure for Sprint's network.
``We are disappointed that Sprint has been given an extra 180 days to comply with its obligations,'' IPCS Chief Executive Officer Timothy Yager said in a statement. Sprint's operation of Nextel's network in IPCS territory ``violates our subsidiaries' management agreement with Sprint,'' he said.
Sprint rose 29 cents, or 15 percent, to $2.24 at 12:55 p.m. in New York Stock Exchange composite trading. The shares dropped 85 percent this year before today. IPCS fell 1 cent to $8.80 in Nasdaq Stock Market trading and is down 76 percent this year.
Clearwire Suit
IPCS has sued Sprint in the same Chicago courthouse over its decision to join with Kirkland, Washington-based Clearwire Corp. in building the first national high-speed, or Wi-Max, wireless Internet network. IPCS claims that plan, too, would violate its territorial agreements with Sprint.
The trial is scheduled to begin on Dec. 2 before Cook County Circuit Judge Kathleen Pantle. Delaware Chancery Judge Donald Parsons ruled last month that the companies should proceed with the suit, after Sprint asked him to declare that the Wi-Max initiative didn't conflict with the IPCS contracts.
Pantle on Nov. 17 will hear a request from IPCS attorneys for a temporary restraining order blocking Sprint from completing its transaction with Clearwire.
Sprint has argued that the Wi-Max network, which can transmit data five times faster than conventional wireless Internet systems, operates on a different radio frequency than the one covered by the IPCS accord.
The case is IPCS Wireless Inc. v. Sprint Corp., 106455, Illinois Supreme Court (Springfield).