Earlier today we saw Verizon get involved in a lawsuit, and now Clearwire is a part of a lawsuit of its own. Things are a little different in this case, though, as Clearwire is the one being sued. Fifteen of the company's customers are involved in a suit that alleges that Clearwire throttled WiMAX speeds as low as 256Kbps late last year, even though marketing materials promised that speeds would never go below 1Mbps, and then charging them ETFs when they dropped the company's services. Originally, customers were told that either network congestion or monthly usage caps were to blame, but eventually a Clearwire spokesperson explained that the company intentionally throttles speeds in order to clear up congestion. Clearwire is also accused of false advertising and for running as a Ponzi Scheme by advertising services that it can't provide just to sign up new customers and build out its network.
Clearwire's had some well-documented issues in the past, and this new lawsuit certainly isn't helping their situation. I don't think anyone can really blame those customers for suing if their claims are true, though, because getting 256Kbps speeds with a WiMAX connection would be pretty frustrating. We'll keep you up to date on the situation as it continues.
UPDATE: Another bit of bad news from the Clearwire camp: their CEO, Bill Morrow, just resigned for "personal reasons." Replacing him, at least for now, will be chairman of the board John Stanton, who just so happens to be the former CEO of VoiceStream, now known as T-Mobile. Two other execs will also be parting ways with Clearwire in the near future. The full press release is waiting for you down below.
Clearwire Names Chairman John Stanton as Interim CEO
Kirkland, Wash., March 10, 2011 (GLOBE NEWSWIRE) -- Clearwire (NASDAQ: CLWR), a leading provider of 4G wireless broadband services in the U.S., today announced changes to the company's executive leadership team.
John Stanton, chairman of Clearwire's board of directors and former CEO of Western Wireless and VoiceStream Wireless, has been named CEO of Clearwire on an interim basis, effective immediately. Stanton will continue to serve in his role as board chairman.
Stanton replaces Bill Morrow who has resigned as CEO and as a director of the board, citing personal reasons. Morrow will continue to serve as an advisor to the company during the transition period. The company has appointed a search committee, chaired by board member Dennis Hersch, to lead the hiring process for a new CEO.
"I would like to commend Bill for his tremendous leadership in building the first U.S. 4G network, adding more than 5 million subscribers, and raising funds in a challenging economic environment," said John Stanton. "Bill built a strong leadership team which enables us to promote Erik Prusch and Hope Cochran to new roles. Together, the entire management team at Clearwire remains focused on delivering value to its customers and shareholders."
Other Executive Appointments
As part of today's announcement, Erik Prusch, Clearwire's CFO, has been promoted to the newly created position of chief operating officer (COO). In this position, Prusch will be responsible for the company's day-to-day operations, including wholesale and retail sales, marketing, customer service, supply chain, human resources, IT and network operations. In addition, Hope Cochran, Clearwire's senior vice president and treasurer, has been promoted to the position of CFO. Cochran will be responsible for all of the company's financial and investor related functions, including overseeing Clearwire's ongoing fundraising efforts.
The company also announced that Mike Sievert, chief commercial officer, and Kevin Hart, CIO, are both leaving the company to pursue other opportunities. Both Sievert and Hart will remain with the company for a transition period. "We thank Mike and Kevin for their service and contributions during an incredible period of growth for Clearwire, and we wish them continued success in the future," said Stanton.
Today's changes in executive leadership are not expected to impact the company's progress on an agreement with Sprint to resolve wholesale pricing disputes. Clearwire believes that an agreement with Sprint is imminent.
Stanton has held numerous leadership positions during his career in the wireless industry. He currently serves as chairman of the board of Trilogy Partnerships including Trilogy International Partners which operates wireless systems in Haiti, Dominican Republic, Bolivia and New Zealand. Stanton served as chairman and CEO of Western Wireless Corporation from 1992 until its acquisition by ALLTEL Corporation in 2005. From 1994 to 2003, Stanton served as chairman and CEO of VoiceStream Wireless Corporation, which was sold to Deutsche Telecom and became T-Mobile USA.
Clearwire Corporation (NASDAQ: CLWR), through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G network currently provides coverage in areas of the U.S. where 120 million people live. Clearwire's open all-IP network, combined with significant spectrum holdings, provides an unprecedented combination of speed and mobility to deliver next generation broadband access. The company markets its 4G service through its own brand called CLEAR(R) as well as through its wholesale relationships with Sprint, Comcast and Time Warner Cable. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire is headquartered in Kirkland, Wash. Additional information is available at www.clearwire.com.
Clearwire, CLEAR, and the CLEAR logo are trademarks or registered trademarks of Clearwire Communications LLC in the United States and/or other countries. All other company or product names are trademarks of their respective owners.