Comcast to Resell Clearwire's WiMax Service

WiMax carrier Clearwire's financially shaky plans to build a nationwide wireless 4G broadband network will receive a boost this summer, with cable giant Comcast planning to buy Clearwire's Portland, Ore., service at wholesale prices and repackage it into a Comcast-branded product. Comcast has already invested $1 billion in Clearwire.

The wholesale deal was established when Comcast invested in Clearwire as part of last year's $14.5 billion merger between Clearwire and Sprint Nextel's Xohm WiMax division. In addition to Comcast's investment, the merger deal also included a combined $2.2 billion investment by Intel, Time Warner Cable, Google and Bright House Networks.

"We are very interested in being able to offer a wireless component to our products," Comcast Chief Operating Officer Stephen Burke told the Portland Oregonian March 14.

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Clearwire is racing to establish the first nationwide 4G network, betting the farm on WiMax technology. Verizon Wireless and AT&T, the nation's two largest wireless carriers, are counting on LTE for their 4G technology. With WiMax networks already established in Baltimore and Portland, Clearwire said March 5 it plans to roll out 4G WiMax networks in eight metropolitan areas in 2009 and add at least another four markets in 2010.

As for the wholesale deal with Comcast, Clearwire Chief Operating Officer Perry Satterlee told the Oregonian, "Whether it comes through a retail channel or comes through a wholesaler, in the end, Clearwire wins. It's customers on our network."

Clearwire hopes to cover up to 120 million people in approximately 80 markets by 2010. WiMax rollouts for 2009 include Atlanta; Las Vegas; Chicago; Charlotte, N.C.; Dallas/Fort Worth; Honolulu; Philadelphia; and Seattle. Cities on the 2010 buildout board include New York, Washington, D.C., Boston and San Francisco.

Verizon Wireless said Feb. 18 it will be testing LTE in U.S. cities in 2009, followed by an aggressive rollout in 2010. Nokia, the world's largest cell phone maker, has already committed to a major LTE push and March 5 referred to WiMax as a niche play.

WiMax's 4G technology allows for the delivery of last-mile wireless broadband access. WiMax promises faster download speeds than current cellular networks and has the potential to be a competitor to fixed-line broadband such as DSL. For cable companies such as Comcast and Time Warner, the investment opens the door to offer bundles of service including wireless broadband to compete with AT&T and Verizon.

Clearwire says the new WiMax network will be open to all legal devices and services, including Google's Android platform. Intel will supply networking gear and software for the new network.