FreedomPop, the wireless broadband startup backed by Skype co-founder Niklas Zennstrom, says it will buy wholesale broadband service from Clearwire instead of from LightSquared. The Federal Communications Commission has decided that LightSquared cannot move forward with its effort to provide wholesale mobile broadband as its spectrum interferes with some GPS equipment.
FreedomPop says its plans to offer free mobile broadband service this year are still on track thanks to Clearwire.
“This agreement enables FreedomPop to offer a disruptive retail service, providing free, flexible, high-speed internet access to millions of American,” said FreedomPop marketing VP Tony Miller. FreedomPop plans to use its free service to upsell customers to premium services, but so far the company has not provided many details about those services.
Clearwire’s WiMAX mobile broadband network currently covers more than 130 million people in the United States. It sells wholesale service to enterprises, and supports consumer services through its Clear brand. The Washington-based company has faced cash flow problems as it builds out its network, and recently averted a possible bankruptcy by cutting a deal with majority-owner Sprint Nextel. Although Sprint Nextel owns 54% of Clearwire, it does not control the company, so the two companies had to negotiate the deal whereby Sprint Nextel agreed to pay Clearwire up to $1.6 billion over the next four years.
Clearwire is expected to use a significant portion of its proceeds to overlay TD-LTE equipment onto its network.
Even before FreedomPop’s announcement, Sprint Nextel was poised to benefit from free mobile broadband. FreedomPop competitor Republic Wireless uses Wi-Fi to offer free unlimited wireless service, and moves customers onto Sprint Nextel’s network when Wi-Fi is unavailable.
