Schaumburg company pulls Sprint suit
IPCS Inc., the Sprint Nextel Corp. network affiliate that sued to block Sprint's plan to build a national high-speed wireless Internet network, dropped a request for a court order to halt the $14.5 billion project.
The high-speed wireless, or WiMax, plan developed by Sprint in partnership with Clearwire Corp. will infringe territory ceded to iPCS in contracts with Sprint, iPCS alleged in its lawsuit, filed in Illinois state court in Chicago. iPCS invested more than $300 million in construction of Sprint network infrastructure in Illinois, Iowa, Michigan and parts of Nebraska.
IPCS is withdrawing the request filed in advance of a Dec. 2 trial because Sprint and Clearwire said they had no plans to presently operate their network in the disputed territories, iPCS lawyer John Touhy told Judge Kathleen Pantle today in Chicago.
There's ``no immediate threat'' to the iPCS-claimed areas, Sprint attorney Daniel King told Pantle.
Sprint, the third-biggest U.S. mobile-phone service provider, and Schaumburg-based iPCS have been fighting over the WiMax initiative since May when Sprint announced its partnership with Kirkland, Washington-based Clearwire.
WiMax has a data transmission rate five times faster than conventional wireless Internet networks. The U.S. Federal Communications Commission on Nov. 4 unanimously approved the companies' plan to create the first such nationwide network.
Combined Entity
The combined entity, called ``New Clearwire'' in court papers, said it wouldn't launch its network or offer services in the disputed areas before July 1, and that it would give iPCS at least 60 days notice before launch, sales or promotion, according to the agreement.
While Clearwire shareholders are scheduled to vote on their company's participation in the WiMax plan on Nov. 20, the matter doesn't need Sprint shareholder approval, said Matt Sullivan, a spokesman for that company. If shareholder approval is obtained, Clearwire and Sprint plan to complete the transaction by the end of 2008.
``The pending litigation will not be an impediment to the planned closing,'' Clearwire spokeswoman Susan Johnston said in an e-mailed statement. ``The territory in question amounts to an extremely small portion of Clearwire's planned nationwide roll- out of mobile WiMAX.''
Brian O'Neill, general counsel for iPCS, declined to comment.
End of Year
Sprint announced the deal with Clearwire on May 7, saying it would close by the end of the year. Intel Corp., Comcast Corp., Time Warner Cable Inc, Bright House Networks and Google Inc. plan to invest $3.2 billion, or about $20 a share, in the new company.
On the same day it announced the Clearwire initiative, Sprint sued iPCS in Delaware state court in Wilmington, seeking a ruling that the plan didn't violate the iPCS accords. Chancery Court Judge Donald Parsons ruled Oct. 8 that the affiliate's Chicago lawsuit should proceed first.
Sprint fell 12 cents to $2.18 at 4:01 p.m. in New York Stock Exchange composite trading. IPCS dropped 40 cents to $7.02 and Clearwire fell 23 cents to $6.82 in Nasdaq stock market trading.
The case is IPCS Wireless v Sprint Nextel Corp., 2008-CH- 17214, Cook County, Illinois Circuit Court, Chancery Division (Chicago).