Comcast, Time Warner Cable May Back Wireless Broadband Venture: Report
WSJ: Comcast, Time Warner In Talks To Fund WiMax Company Run By Sprint and Clearwire
By Todd Spangler -- Multichannel News, 3/26/2008 6:50:00 AM
Comcast and Time Warner Cable are discussing a plan to invest around $1.5 billion in a new high-speed wireless broadband company that would be operated by Sprint Nextel and Clearwire, The Wall Street Journal reported Wednesday.
The paper, citing anonymous sources, said Comcast would invest $1 billion in the joint venture, with Time Warner Cable contributing $500 million. Bright House Networks, which was reported to be part of the discussions, would pony up between $100 million and $200 million.
The joint venture would operate a nationwide wireless network using WiMax technology, which provides high-speed Internet access from mobile PCs and other mobile devices. According to the Journal, Comcast CEO Brian Roberts has played "a prominent role in the talks."
Sprint and Clearwire in July 2007 announced a provisional agreement to build out a nationwide WiMax network that would eventually provide coverage over areas serving 300 million people. However, the pair called off the deal in November, saying they failed to reach terms.
The Journal said Sprint and Clearwire did not abandon the idea of a WiMax JV and are now trying to raise at least $3 billion for the venture. Sprint previously had told investors that a nationwide WiMax buildout would cost $5 billion by 2010.
Intel, which has been a major proponent of WiMax technology, has "signaled a willingness" to invest about $1 billion or more depending on the terms, according to the Journal. The newspaper said Google may be interested in joining the JV as well.
Sprint CEO Dan Hesse, who was brought on board by the flagging wireless provider in December, is "pressing all parties to wrap up discussions in time for the wireless industry's trade show next week in Las Vegas," the Journal said, "so Sprint can have something to present to investors."
The cable companies would get equity in the WiMax joint venture and would be able to purchase wholesale access to offer their own high-speed wireless data, video and voice services to customers, the Journal said, adding that it wasn't clear what services Comcast or Time Warner Cable may offer.
The cable industry has not yet embarked on a wireless strategy that successfully complements its triple-play offerings.
The Pivot mobile phone service -- operated by Sprint, and offered by Comcast, Time Warner Cable, Cox Communications and Bright House to their customers -- has been deemed a disappointment by its backers. Sprint froze the Pivot rollout at 33 markets, citing complexity in provisioning service.
The Journal's report said a key problem with Pivot was that cable operators did not have significant control over the pricing and marketing of the services, a provision they are asking for in the talks on the new WiMax venture.
Meanwhile, SpectrumCo, a consortium of those same four cable companies, owns 137 licenses for Advanced Wireless Spectrum (AWS), acquired in a 2006 Federal Communications Commission auction for $2.4 billion. The cable operators have not said what they intend to use the AWS holdings for.
Cox augmented its wireless holdings in the FCC's auction of the 700-Megahertz TV spectrum, which concluded March 18. Cox, bidding as Cox Wireless, will pay $304.6 million for 22 licenses, in the A and B blocks, in California, Virginia, Georgia, Florida, Louisiana, Arkansas, Kansas and Oklahoma.
