Great information about the Clearwire results. I also tuned in for the call. I thought the analysts asked some nice questions especially towards the end one person asked if Clearwire would ever consider going LTE nationwide wholesale with Sprint cooperation and they seemed open to the idea which is good news.

Another interesting thing I heard on the call was how Clearwire thinks they only need 80-100 Mhz in spectrum to accomplish what they want in their wholesale business and that ~60 Mhz of spectrum could be sold to raise capital. In my opinion, Clearwire should hold onto every piece of spectrum it has even if it is in excess since we know that the wireless community is in a spectrum crunch.

Hi Eric...

It is always nice to read your comments.

I, too, stayed on the call through the analysts questions at the end. While I listened in on the brief discussion about Clearwire potentially monetizing some of its excess spectrum by selling it, I did not include it in the blog because, honestly, I am not sure what to make of that possibility.

The wealth of BRS/EBS 2600 MHz spectrum that Clearwire controls is both an awesome asset and a huge headache -- the latter because BRS is licensed, while EBS is leased from educational institutions. And, believe it or not, only a minority (73.5 MHz bandwidth) of the band plan is licensed BRS; the majority (112.5 MHz) is leased EBS. View the post transition BRS/EBS band plan here:

http://wireless.fcc....S-BandPlans.pdf

So, could Clearwire "sell" spectrum that it is not licensed, that it has only leased? And what is to prevent another carrier (e.g. AT&T) from making a better offer right now and leasing EBS spectrum out from underneath Clearwire? I can only presume that Clearwire has wisely structured the lease contracts so that it always has the right of first refusal upon the expiration or renegotiation of an EBS lease. And I suppose that another carrier would have to buy up independently hundreds, if not thousands of leases to gain the national economy of scale that Clearwire can offer.

Those are the complicating factors, the reasons why I am not sure what to think of a possible Clearwire spectrum sale.

Your thoughts?

AJ

AJ

Thanks for the link. Fortunately I have read a lot of Robert's posts on Sprintusers and have learned a lot from him about the BRS/EBS spectrum band and Network Vision in general. Wow I didn't know that the EBS spectrum makes up so much of the BRS/EBS band. I was kinda wondering about that too, if spectrum is leased from educational institutions, how could Clearwire sell that off since it isn't licensed to them. I agree with you in that there must be some sort of well structured lease contract that doesn't allow new players to swoop in and buy up the spectrum.

Aside from this, I was very happy to hear that Clearwire is going to begin construction on their first 5000 towers starting in Q2. I am very curious as to which towers Sprint and Clearwire have agreed upon to deploy a LTE hotspot and to which markets they plan to deploy for the first 5000 towers by June 2013. Hopefully the Q2 CC will provide more details on that.

I enjoy reading your articles about Network Vision progress and especially the Sprint/Tmobile spectrum analysis series. I am a dork but I keep checking every couple hours to see if part 3 is available. In addition Robert teased us this week about new information about Network Vision progress for A/L and Samsung markets and I am looking very forward to those articles hopefully soon. Keep up the good work.

The EBS leases are troublesome. Don't get me wrong, they are a good thing to have and Clearwire has picked them up at very reasonable prices. But they are troublesome as an asset.

Here is the biggest reason why...inconsistency. Clearwire tried to get the leases to go out to 2030. This was a good move. However, many EBS license holders would not go out that far, or were subject to their own internal regulations or local state laws that prohibited such a long lease. So Clearwire is managing hundreds of EBS leases with differing expirations. Some expire as soon as this year.

As AJ points out, Clearwire did put in provisions of renewal and first right of refusal...where it could. But in some places these provisions could not be put in because of, again, the school's insistance, school bylaws or local/state laws.

Here locally, Clearwire leases EBS from the Santa Fe University. I go to church with one of the members of the USFAD Board of Directors. They are one of the early expirations, and they are very unhappy with Clearwire. They feel that Clearwire grossly undervalued the EBS asset in their dealings with them. Clearwire values the spectrum publicly about ten times per megahertz than they were claiming to EBS lessors during negotiations. And then on top of that, they have not built out their network using EBS assets as promised. This has made for a very unhappy lessor. And I believe USFAD will not renew their lease with Clearwire at the same terms, when it comes up for renewal next year. They are hopping mad. I could see them sitting on the asset themselves or even going into a short term lease with a local ISP.

However, also as AJ points out above, if AT&T decided to really organize and go after these EBS leases that are expiring in an aggressive manner, they could pick up some cheap spectrum. It will be much less expensive to subleases EBS spectrum from educational institutions than it will be buying the leases from Clearwire. But I'm not sure if the amounts of spectrum coming from expiring leases is worth the trouble to AT&T. They want big spectrum assets, fast. So this would be a change of course in AT&T's style. But it's something I would consider if I was them.

Although I don't know of very specific instances like this in other parts of the country, I do believe it is common. And about one third of the EBS leases expire between now and 2015. The other third between 2015 and 2030. The final third are out to 2030.

EBS makes Clearwire spectrum assets very unwieldy to manage and a difficult asset to monetize. And with every article that gets published that Clearwire is sitting on a gold mine of spectrum, the more EBS lessors get ticked off.

Robert

I'm still working on the Network Vision deployment article. I've not had time in the evenings this week. I'm speaking in a lecture series this week. And my evenings have included much more social interaction with attendees than I was anticipating. I will start to get to a more normal evening schedule tonight. However, I am now thinking I am not going to make my 2PM Friday deadline. I may wait to post late Sunday night as a Monday article. There is a lot of data to go through. The data I have is not a simple list of the 97 Sprint markets in order. That would be too easy. But it does include a lot of good meaty stuff, too.

It will be worth the wait.

Robert