Intellectual Property Law

Huge Cable WiMax Consortium in the Works?

By Cynthia Brumfield

(Still blogging very lightly...on vacation through Saturday.)

According to the WSJ, Comcast, Time Warner and Newhouse-owned Brighthouse Networks are organizing an A-list backed group of investors to form a new WiMax company with Sprint-Nextel and Clearwire. Comcast is talking about putting $1 billion into the effort, with Time Warner ponying up $500 million and Brighthouse chipping in $100 million to $200 million.

Ailing Sprint, which has repeatedly faced financial and technical delays in getting its WiMax plans off the ground, is trying to recruit funders too. Intel might commit $1 billion, while Google is reportedly willing to provide hundreds of millions.

What's really interesting is that Comcast and Time Warner have seemed insecure about their abilities to navigate the wireless sector. A bold consortium to revive the nearly moribund WiMax business (at least in the U.S.) could be a sign of a serious shift of strategic thinking for the top two operators.

Although they own more than $2 billion in wireless spectrum purchased in the AWS auction a few years back, Comcast and Time Warner (and Cox and Brighthouse) have retreated from efforts to sell a Sprint co-branded cell phone service, a mobile component designed to go head-to-head against Verizon Wireless and AT&T. Wireless, cable operators have said, is not the industry's strength.

That seems to be changing. Without a mobile option -- and cable operators don't want to offer plain jane voice service only -- it's going to be hard for them to compete with the telcos' quadruple-play, or even dual-play (landline and mobile voice) services. It's just a question of learning the ropes and raising the money.

Full post as published by IP Democracy on March 26, 2008 (boomark / email).