WiMAX impact of Sprint-Nextel

5 thoughts on “WiMAX impact of Sprint-Nextel”

  1. Martin G. has also said he believes the MMDS will sit vacant and so do I, but for reasons not yet articulated.

    Now that I’ve had a night to sleep on this deal, I think its a terrific deal for Sprint and Nextel, and an awful deal for consumers. In fact, if Jeff (at BuzzMachine) wants to turn the tables on the puritans undo influence over at the FCC, the Blogosphere should really rally against this deal.

    A believe the MMDS spectrum will never be lit, but will serve as an effective “barrier to entry” by sitting vacant.

    If players outside of telecom think about making serious bids in the new 700mhz auctions, their financiers will have to really consider the “time to market” bloodbath new players could suffer in the race to offer new services. With all that vacant MMDS spectrum just waiting to go. Its like a big dare, and financers don’t like sucker plays.

    If this deal happens, then we have 3 players, 2 RBOCS, and new Sextel. The RBOCs are not going to do anything stupid on pricing because of their losses from fixed lines.

    Thus Sextel will have the ability to biggyback on the RBOCs need for the current stable price structure, and since together Nextel+Sprint will have enough scale to already be profitable, they’ll can just coast along and count the money.

    There’s enough business for the 3 of them to really hammer consumers, and slow the pace of innovation to a crawl.

    This deal is ultimately bad for consumers.

    We’ll be held hostage to three very profitable companies with no incentive to rock the boat.

    I think this will be harder to get approved than the conventional wisdom thinks, plus it could be a non-political test for the blogosphere.

    How much influence do folks in their pajamas really have?

  2. Charlie, remember that the FCC has a large proposal to reform the MMDS band to make it more useful and to bring in more auction revenue. But I don’t know the status of that reform. I liked the plan, but my understanding was that MMDS incumbents would fight because it would cause them to lose some of their ability to control the band.

  3. Glenn, nice to see that you’ve turned the comments on, on your very good WiFi blog.

    I believe you’ve got the right idea (MMDS reform) but the details are off.

    MMDS reform was to allow it to be more competitive vs. the PCS/Cellular bands. The reform was to relax certain obsolete restrictions. But this reform mostly got started/took place before Nextel bought out MCI and Nucentrix’s MMDS inventory.

    Most of MMDS has already been auctioned and Sextel would own 80-90% of this band. Since they are a PCS/Cellular operator and MMDS is more expensive from a CAPEX angle, the MMDS reform is moot.

    Now I swear I’m not a conspiracy guy, but on a Sunday morning before my resident toxins have awoken, I started thinking about this deal.

    Who is ready and willing to buy MMDS spectrum, if the FCC tells Sextel to unload it? Clearwire!!! Wireless’s very own Howard Hughes.

    I wonder just when this rumored deal was hatched?

    Something just doesn’t feel right about this deal.

    Anyway since the one thing everybody agrees on is that if approved this is the LAST deal, then I suspect everybody that is inclined to opposed this bugger is going to come out guns ablazin’.

  4. My understanding is that current MMDS licenseholders would see their portfolios reduced under the reorganization, though. I’m talking about the June 2004 proposal not the loosening of licensing. I’ve found most people are thinking about the older loosening issue re MMDS not the total reorganization!

  5. Having worked in the MMDS field at Sprint in a former life, the biggest impediments to progress I saw are the incumbet license holders. Sprint has lease rights, but does not own outright, a very significant portion of the MMDS spectrum. Many of these license holders are holdouts from the 70s when the frequency was used for television, and are sitting on their licenses hoping for enough money to retire on. Because of the channel interleaving, multiple parties have to be negotiated with individually to get enough spectrum to go to market.

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