Illinois court allows iPCS’ challenge of Sprint-Clearwire WiMax deal to go forward

Court rules for iPCS in Sprint WiMax fight

KANSAS CITY, Mo. — An Illinois court is allowing a lawsuit to move forward that challenges Sprint Nextel’s deal with Clearwire Corp. to provide wireless broadband.

The Cook County Circuit Court on Thursday denied Sprint’s motion to dismiss parts of the lawsuit, although it did limit the type of monetary damages iPCS could eventually try to gain from the case.

“We are very pleased that the court has again ruled in our favor as we seek to have Sprint live up to its obligations under our affiliation agreements,” said Timothy Yager, chief executive officer for Schaumburg, Ill.-based iPCS, Inc.

IPCS filed the suit last fall after Sprint and Clearwire announced plans to provide high-speed wireless Internet services using their combined WiMax technology. Sprint has a 51 percent interest in the new Clearwire, which has begun offering WiMax in a handful of U.S. markets.

IPCS claims the arrangement violates Sprint’s agreement not to compete with iPCS in its territories. IPCS sells Sprint service across a swath of the Midwest.

The affiliate agreed not to block the Sprint-Clearwire deal from closing in November after Clearwire said it didn’t plan to offer WiMax service in iPCS’ territory in the near future.

But iPC amended its complaint in January, claiming Sprint was improperly sharing technology and benefits with Clearwire that should have been shared with its affiliates. It is asking the court to block Sprint from receiving benefits from the Clearwire deal unless it also provides those benefits to its affiliates.

Sprint attempted to have those claims dismissed, but Judge Kathleen Pantle on Thursday ruled that iPCS had provided enough evidence to argue that the WiMax services fell under provisions in Sprint’s agreement with iPCS to share technological advances with its affiliates.

However, the court did agree to dismiss iPCS’s claims to collect undetermined damages and restitution from Sprint, saying their contract limits recovery to actual damages.

Matt Sullivan, a spokesman for Overland Park, Kan.-based Sprint, didn’t comment on Pantle’s decision to let the case move forward but said her “decision to grant our motion to dismiss several iPCS claims, including those seeking speculative monetary damages, is a positive outcome.”

An Illinois court earlier this year ordered Sprint to cease operating its Nextel network in iPCS’s territory by next Jan. 25 after determining Sprint’s 2005 purchase of Nextel violated the exclusivity agreements.

Several other Sprint affiliates sued shortly before and after the Nextel purchase, making similar arguments, which led the company to buy most of them. Sprint hasn’t said whether it plans to acquire iPCS.