Comcast, TWC To Stop Reselling Clearwire Service


Comcast and Time Warner Cable within six months will no longer offer wireless broadband services through Clearwire, and instead will exclusively resell Verizon Wireless products and services.

On Friday, SpectrumCo, a joint venture of Comcast, Time Warner Cable and Bright House Networks, announced Verizon Wireless will acquire its 122 Advanced Wireless Services spectrum licenses for $3.6 billion. Under the terms of that deal, Verizon Wireless will be the exclusive wireless provider for those MSOs, which after four years will be able to offer the carrier's services under their own brands.

The end of the MSOs' selling arrangement with Clearwire "obviously hobbles not just Clearwire, but also parent company Sprint," Sanford Bernstein senior analyst Craig Moffett wrote in a research note.

Clearwire declined to comment.

According to the operators, Comcast currently has around 30,000 subscribers through the Clearwire partnership and Time Warner Cable has approximately 27,000.

Both Comcast and TWC (as well as Bright House) are investors in Clearwire. But the deal with Verizon Wireless indicates that they pull out of Clearwire may unwind, according to Moffett.

"This deal means the cable industry will almost certainly have to exit the Clearwire venture, and raises troubling questions about whether Sprint will have to take on additional equity in the venture, and potentially have to begin consolidating its money-losing income and debt-laden balance sheet," he wrote.

The cable operators will continue to support high-speed wireless Internet customers who have already signed up, but won't sell it to new subscribers in about six months.

On Thursday, Sprint Nextel and Clearwire reached an agreement that potentially could provide up to $1.6 billion in payments and funding to Clearwire over the next four years -- helping to resolve some financial uncertainty for the cash-strapped company.

Clearwire also said that it has made interest payments totaling $237 million on its notes that were due Dec. 1.