There is an interesting notion this morning regarding the fate of the real 4G in America and it is both fascinating and complicated.  A report from Bloomberg this morning is causing a stir regarding the troubled Sprint Nextel Corporation (NYSE: S) having discussions with other cable and communications players.  The aim is an investment that would lead to an acquisition of Clearwire Corporation (NASDAQ: CLWR).  We have an entirely different take beyond the discussions… The question that has to be asked is if a deal is even possible, even if it means a strengthening of spectrum.

The report names discussions with Comcast Corporation (NASDAQ: CMCSA), as both companies are already investors in Clearwire.  Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks LLC are also noted as discussing funding possibilities to build out the high-speed wireless network.

The issue at hand is that Clearwire’s plan calls for about $600 million.  The company is at least somewhat under new management and many believe that it cannot live on its own.  The upgrade is for the long-term evolution technology (LTE) that aims to compete against AT&T Inc. (NYSE: T) and Verizon Communications (NYSE: VZ).

So we went back through the report and the report centers on issues such as “sources” and that “no deal is imminent” and that “no terms have been determined” and the like.  Those sources also noted that Cablevision Systems Corp. (NYSE: CVC) and Cox have also held some discussions with Sprint on the matter.

Our question is a bit different.  Clearwire has many investors who might go along with a buyout, but Clearwire closed at $2.31 yesterday and the 52-week range is $1.32 to $8.82. This was more than $20 at the launch.  There are many investors who might fight an acquisition unless the investor group ponies up a significant multiple of premium rather than just premium.  The good news is that Clearwire shares are up over 10% this morning.

Sprint Nextel Corporation (NYSE: S) has been such a dog and the stock is seeing no response at all this morning.  The problem with Sprint is that some investors question its real long-term viability even though it has more than $6.5 billion in liquidity.  The company keeps losing money and the path to profitability is one which remains elusive.  Dan Hesse has just not been able to effect the turnaround and the company could find itself under attack by shareholders.

Sprint’s biggest sin today is that it doesn’t carry the iPhone from Apple Inc. (NASDAQ: AAPL).  It has already pushed back against Research in Motion Ltd. (NASDAQ: RIMM) on the tablets and carrying the 4G HTE phone and the Google Inc. (NASDAQ: GOOG) Android phones has so far not been able to save it.

Sprint has perhaps a multi-billion hidden asset in its spectrum.  The question about the value of Spectrum is if AT&T or Verizon would pony up the real value of cash.  Other buyers are there, but the wireless spectrum players are becoming a smaller and smaller lot because of M&A.

This is an interesting thought for both Sprint and Clearwire, but any investment that leads to a deal for Clearwire might leave many of Clearwire’s long-term shareholders in the wind at a significant loss.  Any deal might come at a high price for Sprint Nextel as well, and the company is in no position to add on massive dilution on top of the pain it has already dished out to shareholders.

JON C. OGG

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