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urgentcomm » Magazine Articles » Clearwire buys 2.5 GHz spectrum from AT&T

Clearwire buys 2.5 GHz spectrum from AT&T

Mar 1, 2007 12:00 PM

Wireless broadband provider Clearwire has agreed to pay AT&T $300 million in cash for 2.5 GHz spectrum previously owned by BellSouth, AT&T announced.

As a condition of the $80 billion merger between AT&T and BellSouth, the FCC required AT&T to divest BellSouth's 2.5 GHz spectrum, which included Broadband Radio Service (BRS) licenses and Educational Broadband Service (EBS) spectrum, which is used by accredited educational institutions and non-educational organizations. Under FCC rules, EBS licensees can lease part of their spectrum to commercial entities.

Clearwire, chaired by cellular pioneer Craig McCaw, uses “WiMAX-class” technology to deliver wireless broadband service to 33 U.S. markets. With the acquisition from AT&T, only Sprint Nextel has more 2.5 GHz spectrum than Clearwire.

Although it is “still patching together spectrum,” Clearwire could prove to be a disruptive alternative broadband provider, said Robert Syputa, senior analyst for Maravedis Research. On the surface, the price for the spectrum seemed reasonable, he said.

“Clearwire is certainly no fool, and it doesn't sound like an onerous amount to pay for it,” Syputa said.