Dealmaking lends itself to certain axioms: Talk less and listen more; beware of deal fever; cherish certainty of closing. To these I would add a personal favorite -- avoid joint ventures whenever possible.

No one would argue with a straight face that a joint venture is the optimum business structure. You do a JV because you have to, not because you want to. But sometimes -- for example, in the wireless telecom industry, where crushing capital requirements and a highly regulated licensing scheme have given rise to all kinds of collaborations -- you really do have to. The latest example is the multiheaded, $14.5 billion monstrosity that rolls up my former employer, Clearwire Corp.

Now this is an industry that has seen its share of successful joint ventures, or at least those that weren't unmitigated disasters: Verizon Wireless, co-owned by Verizon Communications Inc. and Vodafone Group plc, comes to mind, although the British end of that partnership suffers through the technical incompatibility of Verizon's offerings with its own only by dint of the tremendous operating results the JV has generated in its near decade in existence.

Cingular Wireless LLC was also a modest success, providing its telecom parents the ability to go national with no more hiccups or customer service problems than either would have experienced on its own. Even the joint venture I worked for in the mid-'90s (a mixing bowl of assets necessitated by the Federal Communications Commission's two-licenses-per-market rules of the time) worked reasonably well, offering the owners the compromise of sharing control over two major markets, but without either company's brand attached.

However, notice that the best that can be said about these ventures is that they didn't implode. You can't say as much about the ill-fated Concert JV between AT&T Corp. and British Telecommunications plc and myriad smaller disasters.

It's hard enough competing in the telecom business on one's own. Imagine the difficulties when internal disagreements, bickering and delay factor in. In any joint venture, there's the very real question of how agile and effective the operation can be when it is subjected to the diffuse leadership of multiple owners. There is no limit to the ways a venture can get bogged down when things don't turn out as planned or if one owner has a change of heart. Even fully grown companies have been known to engage in tactics as juvenile as quorum avoidance (i.e., not showing up for board meetings) to keep capital calls from being approved.

So what to make of the new incarnation of Clearwire? In happier times, it probably wouldn't have been necessary. Sprint Nextel Corp. would have bought Clearwire (thus gaining a national spectrum footprint) and self-funded the $5 billion WiMax buildout. Beset with operational problems, anxious investors and a sagging stock price, Sprint couldn't begin to do this -- so, once again, a joint venture is born of a lack of any better options.

One encouraging sign is that Clearwire, the 27% minority holder of the venture, gets to run the thing. This decision was no doubt driven as much by concerns over Sprint's operational ineptitude as it was by faith in Clearwire's management. Cause for concern, however, includes the fact that Sprint, Comcast Corp., Time Warner Inc., Intel Corp. and Google Inc. all have seats at the table. None of them will be shy with their opinions. Keeping the board aligned will be every bit as important as executing the business.

And what of the curious fact that Sprint, owner of 51% of the venture, is not only ceding operations to Clearwire but has also given up enough control rights to not have to consolidate the JV's financial results? That's great in theory and should mean that Clearwire has ample room to drive day-to-day operations. However, it's a safe bet that the parameters of these rights will quickly be tested, given that Sprint has five members on the JV's board.

Success for the venture should depend on how well it can execute and roll out wireless broadband. In reality, like so many other telecom joint ventures, much will ride on how much energy Clearwire needs to devote to keeping its multiplicity of owners on the same page. - Josh King

Josh King (pictured) is vice president, business development, and general counsel at Avvo Inc. in Seattle. You can find more of his writing on his blog at corporatetool.blogspot.com.

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