Sprint Nextel’s largest independent affiliate, iPCS, announced that three of its subsidiaries have filed a lawsuit against Sprint Nextel, claiming that its recently announced deal with Clearwire breaches iPCS’ exclusive arrangement with the carrier.
Filed with the Circuit Court of Cook County, Illinois, and the SEC, iPCS is seeking declaratory judgment that Sprint Nextel's arrangement with Clearwire would allow it to compete against iPCS and is therefore a breach of contract.
iPCS is asking the court for a permanent injunction keeping Sprint Nextel from consummating its planned WiMAX transaction until arrangements have been modified to comply with iPCS’ agreements with Sprint Nextel.
In a statement, iPCS noted that it has been involved in litigation with Sprint Nextel for nearly three years about the exclusivity provisions of its affiliation agreements and has repeatedly won court victories. In late 2006, the Circuit Court of Cook County ruled that Sprint’s ownership and operation of Nextel’s wireless network in the iPCS Wireless territory violates its affiliate agreement with the carrier. The Illinois Appellate Court affirmed that judgment in March of this year.
“iPCS believes that Sprint Nextel's recently announced WiMAX transaction is yet another attempt by Sprint Nextel to breach the exclusivity provisions of the iPCS affiliation agreements. iPCS intends to fully and aggressively protect and defend its exclusivity rights,” the company’s statement continued.
Last week Sprint filed a request at the Court of Chancery in Delaware for a declaratory ruling that its proposed venture with Clearwire was not in violation of its agreements with iPCS. Sprint said that iPCS’ suit is “simply a response” to the carrier’s request filed in Delaware.