| By DEBORAH YAO, AP Business Writer PHILADELPHIA - Sprint Nextel Corp. is close to finalizing a deal to get financing for its new wireless broadband network from a group that includes Comcast Corp. and Google Inc., according to a person close to the talks.
The group, which also includes Time Warner Cable Inc., Bright House Networks, Intel Corp., and Clearwire Corp., is expected to announce a $12 billion deal to create a national network that uses the WiMax technology, said the person, who asked not to be named because public release of details hasn't been authorized. Sprint will merge its WiMax division, worth billions of dollars, with Clearwire, which has been building its own WiMax network. Sprint will be the majority owner of the new company, to be called Clearwire. WiMax promises faster download speeds than the latest networks run by cell-phone operators, and it's even seen as a potential competitor to fixed-line broadband like DSL. Sprint and Clearwire, a startup founded by cellular pioneer Craig McCaw, have already announced their plans to build out a network using WiMax technology, but had been looking for outside funding. The combined venture will get more than $3 billion in funding, the person said. Philadelphia-based Comcast will contribute slightly more than $1 billion, Intel is putting in $1 billion, Time Warner Cable of New York will contribute $550 million, Google is contributing $500 million and Bright House's part is $100 million. Details about the the deal were reported by The Wall Street Journal on its Web site Tuesday. The venture will give the cable companies the option to provide wireless service by buying wholesale access to the WiMax network and then reselling it. The big cable companies have already called off a disappointing run with cell phone service in conjunction with Sprint. Rivals such as AT&T Inc. and Verizon Wireless have eschewed WiMax, opting instead for upgrades to their current wireless broadband networks and a future technology called Long Term Evolution. Intel has been heavily involved in developing WiMax and will be making WiMax chips for computers, set-top boxes and cell phones. Google will provide its search function. Unlike the cable companies' previous wireless deal with Sprint, which led to co-branded cell phones in a plan called "Pivot," the WiMax collaboration will give cable control over marketing and operations. This control was missing in Pivot, which cable companies said helped hasten its demise. Sprint's adoption of WiMax was championed by former Chief Executive Gary Forsee. His departure, and Sprint's poor financial performance, spurred the need to find investors. The cost of its WiMax buildout was estimated at more than $5 billion over the next several years, said Phil Redman, research vice president at Gartner Inc. Clearwire Corp. already provides wireless Internet service in some parts of the country, using a WiMax-like technology.
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