Comcast And Time Warner May Fund Clearwire-Sprint WiMax Effort

Mar 26, 2008 (10:03 AM EDT)

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Seeking to kill four birds with one WiMax stone, Clearwire, Comcast, Sprint Nextel, and Time Warner Cable have been in negotiations to help deploy the wide area wireless technology, according to media reports Wednesday.

Comcast, the nation's largest cable operator, and Time Warner, the second largest, would contribute $1 billion and $500 million, respectively, The Wall Street Journal and The Washington Post reported, each citing confidential sources. WiMax providers Clearwire and Sprint have been in on-again, off-again talks for months in an effort to roll out the still largely field-untried mobile WiMax technology. Sprint originally placed the price of a nationwide WiMax rollout at $5 billion, but the number was recently lowered to $3 billion.

WiMax could solve different challenges faced by each company: Sprint and Clearwire are strapped for cash to underwrite a WiMax rollout, while the cable operations of Comcast and Time Warner are under intense pressure from 3G cell phone services supplied by newly aggressive competitors Verizon and AT&T. WiMax could help the cable operators compete more aggressively.

"Comcast and Time Warner are home-, broadband-, and PC-oriented, so WiMax as a choice to get into wireless makes sense for them," Jupiter Research analyst Julie Ask told The Washington Post.

Intel, which pioneered the WiMax technology, is another candidate to support a WiMax rollout, because the processor and semiconductor maker is in the process of putting WiMax chips in new generations of laptops. Search engine colossus Google has also participated in some of the WiMax talks. The Wall Street Journal has listed additional possible participants in a WiMax rollout, including retailer Best Buy and Bright House Networks.

Clearwire has been signing up WiMax subscribers in different scattered regions of the United States, while Sprint has deployed the technology in the Chicago and Baltimore-Washington regions. Nearly all WiMax subscribers are offered fixed WiMax, although Cisco Systems' Navini Networks unit has outfitted a few small networks with mobile WiMax.