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Crest Financial will urge FCC to block Sprint/Clearwire transaction


ericdabbs
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Crest Financial, a minor investor of Clearwire, owns around 8.3 percent of Clearwire shares, is planning to file a formal complaint to the FCC before the Jan 28th deadline to urge the FCC to look at the Sprint/Clearwire transaction more carefully. Crest Financial believes that the 2.2 billion offer for the rest of Clearwire is a slap to the face and is undermining the true value of the vast 2.5 GHz spectrum assets which in their opinion is worth a lot more.

 

What do you guys think will happen with now Crest Financial and Dish Network attempting to block this Sprint/Clearwire deal? IMO Crest Financial and Dish Network just have sour grapes that Sprint was able to nab Clearwire for the price they did and they could do nothing about it. I hope the FCC overlook the complaints from Crest and Dish and can see how this deal can help Sprint compete with the big 2 and approve both the Sprint/Softbank and Sprint/Clearwire deals.

 

http://www.fiercewireless.com/story/clearwire-investor-crest-urge-fcc-block-sprintclearwire-deal/2013-01-04

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The FCC won't care about the financials and how much the capitalists make. Only the competitive nature of the deal. This will result in a benefit to consumers.

 

Robert via Samsung Note II via Tapatalk

 

 

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This type of complaint would be in the domain of the FTC I believe. The FCC could care less about the financials.

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IMO Crest Financial and Dish Network just have sour grapes that Sprint was able to nab Clearwire for the price they did and they could do nothing about it. I hope the FCC overlook the complaints from Crest and Dish and can see how this deal can help Sprint compete with the big 2 and approve both the Sprint/Softbank and Sprint/Clearwire deals.

 

I totally agree that Sprint could compete with the big two but they are not going to be able to with the opposition surrounding both deals. The deals undervalue the vast 2.5 GHz band that Clearwire owns. Based on AT&T's recent purchase of 2.3 GHz spectrum Clearwire alone is valued at close to $16 Billion has Credit Suise calculated. Also Sprint/Clearwire would own to much spectrum in America, over 1/3rd of usable spectrum but only 1/6th of customers. That amount of spectrum controlled by a foreign firm is something the government will not want.

 

The FCC won't care about the financials and how much the capitalists make. Only the competitive nature of the deal. This will result in a benefit to consumers.

 

You need to remember the government is like one bug business. They do not want to do a deal that hurts their business. Even though Sprint/Clearwire would make Sprint more competitive the deal undervalues Clearwire. As I stated above Clearwire is valued at over $16 billion if you base their spectrum alone off of AT&T's recent spectrum purchase. Also the government does have plans to sell spectrum with in the next few years. If they approve Sprint/Clearwire their spectrum auctions will not bring in as much money as of Sprint and Clearwire were separate companies. Sprint competitive yes. Government screwed yes. Investors screwed yes.

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I totally agree that Sprint could compete with the big two but they are not going to be able to with the opposition surrounding both deals. The deals undervalue the vast 2.5 GHz band that Clearwire owns. Based on AT&T's recent purchase of 2.3 GHz spectrum Clearwire alone is valued at close to $16 Billion has Credit Suise calculated.

 

Nonsense. Apples to oranges.

 

WCS 2300 MHz is FDD spectrum. BRS/EBS 2600 MHz is TDD spectrum. TDD spectrum has historically been less valuable.

 

WCS 2300 MHz is entirely licensed. BRS/EBS 2600 MHz is mostly leased. Leased spectrum is definitely less valuable.

 

What WCS 2300 MHz and BRS/EBS 2600 MHz have in common is that no other carrier really wants either, so the FCC should be happy to have AT&T and Sprint, respectively, put both to use in the public interest.

 

AJ

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I totally agree that Sprint could compete with the big two but they are not going to be able to with the opposition surrounding both deals. The deals undervalue the vast 2.5 GHz band that Clearwire owns. Based on AT&T's recent purchase of 2.3 GHz spectrum Clearwire alone is valued at close to $16 Billion has Credit Suise calculated. Also Sprint/Clearwire would own to much spectrum in America, over 1/3rd of usable spectrum but only 1/6th of customers. That amount of spectrum controlled by a foreign firm is something the government will not want.

 

 

 

You need to remember the government is like one bug business. They do not want to do a deal that hurts their business. Even though Sprint/Clearwire would make Sprint more competitive the deal undervalues Clearwire. As I stated above Clearwire is valued at over $16 billion if you base their spectrum alone off of AT&T's recent spectrum purchase. Also the government does have plans to sell spectrum with in the next few years. If they approve Sprint/Clearwire their spectrum auctions will not bring in as much money as of Sprint and Clearwire were separate companies. Sprint competitive yes. Government screwed yes. Investors screwed yes.

 

The spectrum is way over valued. Clearwire could not get anyone to be interested in it when they tried to sell some in the past. This really drives down the value. Lack of demand. There is no concrete value to the EBS/BRS spectrum at all. It is purely speculative. It would go for a fire sale in bankruptcy. Also, Clearwire has no value without Sprint. If Sprint backed out tomorrow and let Clearwire go bankrupt, then where would these investors be? Clearwire only has value with Sprint in the mix. Sprint is the only thing that has kept Clearwire afloat. Sprint should not be penalized for the value they add to Clearwire. All these investors were close to losing their investments three times over in the past. They took the risk with Clearwire. And everyone always knew Sprint was likely to buy them out. No surprises here at all.

 

Also, Japan is the closest ally to the United States. They will not be deemed some foreign boogey man in this process. And it is no different than Vodafone investment in Verizon nor Deutsche Telekom ownership of T-Mobile. And Softbank is not buying out Sprint and taking them private. They are just buying 70% of public traded shares and taking control of the company. This will pass regulatory scrutiny, no doubt in my mind.

 

I don't see how you consider the government screwed in this deal. They do not profit off Clearwire being sold for $3 or $10 (except for possibly capital gains taxes). There is no valid reason for this deal to not pass regulatory approval now (with the information that is known to date). Only time will tell.

 

Robert

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I totally agree that Sprint could compete with the big two but they are not going to be able to with the opposition surrounding both deals. The deals undervalue the vast 2.5 GHz band that Clearwire owns. Based on AT&T's recent purchase of 2.3 GHz spectrum Clearwire alone is valued at close to $16 Billion has Credit Suise calculated. Also Sprint/Clearwire would own to much spectrum in America, over 1/3rd of usable spectrum but only 1/6th of customers. That amount of spectrum controlled by a foreign firm is something the government will not want.

 

 

 

You need to remember the government is like one bug business. They do not want to do a deal that hurts their business. Even though Sprint/Clearwire would make Sprint more competitive the deal undervalues Clearwire. As I stated above Clearwire is valued at over $16 billion if you base their spectrum alone off of AT&T's recent spectrum purchase. Also the government does have plans to sell spectrum with in the next few years. If they approve Sprint/Clearwire their spectrum auctions will not bring in as much money as of Sprint and Clearwire were separate companies. Sprint competitive yes. Government screwed yes. Investors screwed yes.

Financial deals are outside of the scope of the FCC. Additionally the 2 billion and change that Sprint is proposing is actually double because sprint owns almost half the company PLUS they will be absorbing all of Clears debt(getting closer to that overvaluation of 16 billion). To put the icing on the cake Sprint can almost certainly veto any other offer AND they have first right of refusal. The final pricing might be higher but I have no concern about this deal going through.
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I also posted elsewhere that Sprint can blunt the charge of having too much spectrum by opening up their LTE frequencies to other providers We have seen evidence of Sprints willingness to do so. As far as I know, AT&T and Verizon do not have any other companies on their LTE nor do they have any intention of doing so. The FCC loves the idea of open access.

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All these people thinking the spectrum holds more value than the offer is for should ask one question.... If it is valued at much more then why has clearwire had trouble turning profit, and why has there been no interest from anyone else wanting to pick up the spectrum?.....

 

If no one wants something then its value is zero. That's a fact. Things are only worth what someone is willing to pay for them...

 

Sent from my EVO using Tapatalk 2

 

 

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A typically solid piece from Public Knowledge's Harold Feld...

 

http://tales-of-the-...tually-matters/

 

AJ

 

Yeah, solid, except on his insistence that Sprint owns spectrum in the 2.5GHz band. Unless he has information that Sprint stills owns the spectrum and somehow leases it for $0 to Clearwire, he's wrong.

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Yeah, solid, except on his insistence that Sprint owns spectrum in the 2.5GHz band. Unless he has information that Sprint stills owns the spectrum and somehow leases it for $0 to Clearwire, he's wrong.

 

Yeah, that came up in a discussion on Twitter yesterday. Tim Farrar already corrected Harold.

 

AJ

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