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'Clearwire' Rises From The Ashes Of Previous Failed WiMax JV

It's almost poetic. Like a phoenix reincarnated from the ashes of its former self, Sprint and Clearwire have formed a new joint venture to roll out mobile WiMax to the masses. And this time its more than just words. The companies are teaming up with a handful of cable operators, as well as Intel and Google (man, Google is just everywhere these days), to forge a $14.22 billion entity known as Clearwire.

There's a gazillion and one questions about this new company, and today's press release provides some standard answers.

Sprint and Clearwire have finally decided to merge their existing WiMax operations and have agreed to extend them across the United States. If you're feeling deja vu, you're not alone. This is essentially exactly what the two companies proposed nearly a year ago. That deal, which never was formalized, fell apart before it could become a reality. Then the floor sort of fell out from under Sprint. The future of its WiMax business, branded Xohm, was very much in doubt for the better part of four months. Rumors began to surface that Sprint might re-join Clearwire, and it looks like those rumors can finally be put to rest.

Sprint and Clearwire aren't alone this time. They've been joined by a handful of companies who've decided to invest in the WiMax network. Comcast added $1.05 billion to the pot, and Intel dropped in $1 billion, with Time Warner Cable adding $550 million and Google following with $500 million. Sprint will own 51% of the new company, which, by the way, is called 'Clearwire'. The former Clearwire Corp.'s investors will own 27% and the rest of the companies will own a collective 22%.

The goal? "Clearwire will be focused on expediting the deployment of the first nationwide mobile WiMax network to provide a true mobile broadband experience for consumers, small businesses, medium and large enterprises, public safety organizations, and educational institutions. The new Clearwire expects to dramatically enhance the speed and manner in which customers access all that the Internet has to offer at home, in the office, and on the road," says the press release.

Sprint, Clearwire, and partners hope to clear all regulatory hurdles and have the company formed and fully operational by the fourth quarter of 2008.

That's great. But when will we see our WiMax?

The companies made no actual commitments detailing when and where it will provide WiMax. As you know, Sprint is operating two test markets, one in Chicago and one in Baltimore-Washington, D.C. Clearwire offers several dozen pockets of WiMax as a last-mile technology for those in rural areas not served by cable or telecom broadband. Sprint didn't say if it will launch its test markets fully at any point in the near future. Nor did Clearwire say that it will be expanding on its existing networks. No one committed to providing any new hardware for accessing the WiMax network. Those are all questions that will likely remain unanswered at the moment.

For now, this is what everyone will be concentrating on:

In addition to spectrum, Sprint will contribute to the new Clearwire certain hardware, software and all of its WiMax-based trademarks and other WiMax-related intellectual property. The new Clearwire expects to materially reduce capital and operating expenditures by leveraging Sprint's existing infrastructure, reducing the cost of building out the mobile WiMax network nationwide. The new Clearwire expects to utilize Sprint's towers, fiber network, and IT support at favorable bulk rates. Sprint also will realize cost savings for its core business by sharing certain costs of towers and other infrastructure.

Intel will work with manufacturers to embed WiMax chips into Intel Centrino 2 processor technology-based laptops and other Intel-based mobile Internet devices, and will market the new company's service in association with Intel's performance notebook PC brand.

Google will partner with the new Clearwire in the development of Internet services, advertising services, and applications for mobile WiMax devices. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire's retail product.

Google will partner with the new Clearwire on an open Internet business protocol for mobile broadband devices. The new Clearwire will support Google's Android operating system software in its future voice and data devices that it provides to its retail customers.

Sprint, Comcast, Time Warner Cable, and Bright House Networks will enter into wholesale agreements with the new Clearwire, becoming 4G providers of new Clearwire's mobile WiMax service.

Comcast, Time Warner Cable, and Bright House Networks and, after completion of the transactions, the new Clearwire, will enter into 3G wholesale agreements with Sprint, becoming bundled providers of Sprint's wireless voice and data services, expanding the reach of Sprint's network to more customers, while providing the cable companies a simpler, more effective vehicle to bundle wireless services.

Sprint and Google also have entered into an agreement related to Sprint's mobile services, whereby Google will become the default provider of Web and local search services, both of which will be enabled with location information, for Sprint. Sprint also will preload several Google services -- including Google Maps for mobile, Gmail and YouTube -- on select mobile phones and provide easier access to other Google services.

Google and Intel have options to enter into 3G and 4G wholesale agreements with Clearwire and Sprint respectively and have no current plans to do so.

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