Crest Financial Asks FCC to Block Sprint-Clearwire Merger
WASHINGTON, Jan. 29, 2013 /PRNewswire/ -- Crest Financial Limited formally asked the Federal Communications Commission to block the proposed mergers between Softbank and Sprint and between Sprint and Clearwire.
Crest, a substantial minority shareholder of Clearwire, argues in a petition filed late yesterday that that the proposed transactions grossly undervalue the primary asset sought in both mergers – Clearwire's trove of wireless spectrum. The filing notes that Sprint's offer for Clearwire sets the value of Clearwire's spectrum at no more than $0.21 per MHz POP and, perhaps, as low as $0.13 per MHz POP. By contrast, reports suggest that the purchase by AT&T of Verizon spectrum announced last week sets the price at $3.77 per MHz POP, many times higher than the Sprint bid.
The Crest petition asserts that an independent Clearwire would be financially stronger and therefore better able to help consumers who are eager for wireless services. Denying the mergers would be the FCC's best hope for creating a vibrant, third wireless network, according to the petition. The petition also alleges that the artificially depressed price of spectrum established by the Sprint offer harms the public interest by setting a low benchmark for future auctions of spectrum by the federal government.
The petition states: "Sprint has demonstrated its lack of fitness as a controller of Clearwire's spectrum, and the Commission should not entrust Sprint with the nation's largest portfolio of spectrum."
It adds: "Sprint has sought to achieve on the cheap what neither it, nor any other carrier, has the capital to do otherwise: buy the entirety of Clearwire's spectrum at fair market value. Sprint attempted to drive down the value of Clearwire so that it could acquire Clearwire after Sprint gained access to a funding source. But, absent Sprint's illegal maneuvering and control tactics, Clearwire simply has too much spectrum, of too high a value, to be acquired altogether by Sprint."
Crest and its affiliates and related persons currently own more than 57 million Class A shares, which constitute approximately 8.34 percent of Clearwire's outstanding Class A common stock.
Crest's FCC petition can be found here: http://www.bancroftpllc.com/crest/.
Separately, David Schumacher, general counsel of Crest Financial, said of recently reported talks between Dish Network and Clearwire: "As its FCC filing states, Crest supports the sale of excess spectrum by an independent Clearwire that reflects the spectrum values established in the recent AT&T/Verizon transaction. However, this spectrum sale must not be part of a larger agreement between Sprint and DISH that aims to carve up Clearwire's assets between them on the cheap."
SOURCE Crest Financial Limited