Sprint/Clearwire in arbitration over 4G monthly fees

FierceWireless posted an article yesterday stating that Sprint is now in a dispute regarding a required fee that they must pay another company every month.  Sound familiar?  What's interesting is that Sprint and Clearwire have entered into arbitration over a REQUIRED monthly fee that Sprint must pay Clearwire for each 4G capable device on their network.

So what's up for dispute?

1.  Sprint currently has approximately 810,000 EVO/Epic devices on their network.

2.  According to Clearwire, there are hundreds of thousands of EVOs and Epics that are NOT in Clearwire's current coverage area.

3.  Clearwire states that it's wholesale agreement with Sprint requires them to pay $4.46 per device each month, regardless if they're in Clearwire's coverage area.

4.  Sprint disagrees and has initiated the arbitration to settle better terms.

OK, let's get this straight.  Sprint agrees to pay $4.46 per 4G capable device.  They don't like that they have to pay for devices that are not using Clearwire's network, so they initiate an arbitration to get out of the original agreement's terms?

Are you serious Sprint?

Obviously there's going to be a winner and a loser here.  If the winner is Sprint, Clearwire is going to be out revenue that they've already projected with the previous agreement.  Clearwire just cut back 15% of it's workforce due to funding issues, so can they really take another hit like this?

The article goes on to state how Clearwire disclosed news of this at its quarterly filing with the SEC.

"We have been engaged in ongoing negotiations with Sprint to resolve issues related to wholesale pricing for Sprint 4G smartphone usage under our commercial agreements with Sprint," Clearwire wrote in its filing. "On October 29, 2010, we received a notice from Sprint initiating an arbitration process to resolve these issues. The process is in the early stages, and its outcome is unknown."

"If we are unable to reach a satisfactory resolution of these issues, we end up agreeing to an amount less than what we expected, or the arbitration process is not resolved in our favor, we could end up receiving substantially less in future wholesale revenues than we expect or for which we have planned. Such an outcome could require us to revise our current business plans and projections and could also adversely affect our results of operations.

But remember folks - this has nothing to do with Sprint's "Premium Data" fee!  Premium Data is NOT for 4G, right?

Read the original article here.

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