- The Washington Times - Thursday, March 27, 2008

PHILADELPHIA (AP) — Major cable, telecommunications and Internet companies are in preliminary but serious talks to create a national wireless network that would link devices such as computers, televisions and cell phones, according to a person familiar with the talks.

Comcast Corp., Time Warner Cable Inc., Bright House Networks, Google Inc., Intel Corp., Sprint Nextel Corp. and Clearwire Corp. are considering investing a total of $3 billion to $4 billion in the joint venture, said the person, who asked not to be named because the person was not authorized to discuss the talks.

Sprint and Clearwire, a start-up founded by cellular pioneer Craig McCaw, already have announced their plans to expand a network using WiMax technology, but sought outside funding.

WiMax promises faster wireless connection speeds for laptops and phones than the latest networks run by cell-phone operators, and it is even seen as a potential competitor to fixed-line broadband like DSL.

Comcast, Google and Intel are each considering about $1 billion in contributions to a new company that would operate the network, the person said. Time Warner Cable’s portion is $500 million while privately held Bright House could contribute $100 million to $200 million, the person said.

Intel has been heavily involved in developing the WiMax technology and will be making WiMax chips for computers, set-top boxes and cell phones.

The joint venture would be a way for cable companies to participate in a wireless strategy without owning a mobile-phone company, something Comcast CEO Brian L. Roberts had said wasn’t attractive.

In a research note, respected Sanford Bernstein analyst Craig Moffett said the deal would be a win for Sprint and Clearwire, whose spending would be reduced with the entry of additional investors.

The picture isn’t clear for cable operators, because investors have called for cutbacks in capital spending and the immediate return of free cash flow, Mr. Moffett said. He added, however, that cable companies would at least ensure there will be wireless broadband that is not controlled by rival phone companies such as Verizon Communications Inc.

The Wall Street Journal first reported on the talks late Tuesday.

Negotiations began this month and Sprint was pushing to get a deal by next week, in time for a wireless-industry trade show in Las Vegas, the person said. Although there is a possibility the deal could be finalized in the next few months, it also could fall through.

The person said the partners will not use the spectrum owned by SpectrumCo, a joint venture between cable companies and Sprint. Its largest stakeholder is Philadelphia-based Comcast. Wall Street has speculated about cable’s wireless strategy since its 2006 purchase of the spectrum for $2.4 billion.

Clearwire was founded in October 2003 by Mr. McCaw, a Seattle billionaire who started McCaw Cellular, which was eventually acquired by AT&T; Inc.

The Kirkland, Wash.-based wireless Internet service provider raised $900 million in a round led by Intel’s venture capital arm in 2006. The funding was meant to speed development and deployment of WiMax networks. Motorola Inc., another investor in that round, agreed to supply wireless broadband equipment for existing and future Clearwire networks.

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