AFI BLOG: Media and Technology

The Wall Street Journal

Sprint, Comcast, Google, Time Warner and Intel Join Forces in New Broadband Joint Venture

The race to bring consumers ultrafast wireless Internet service is on.

An unlikely alliance of titans from the cable, Internet and chip industries have agreed to invest $3.2 billion in a company that will deliver Web access for cellphones and laptops at speeds much faster than what is available today using a technology called WiMax.

Analysts say the venture, valued at $14.5 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks. The venture includes wireless provider Sprint Nextel Corp. and Clearwire Corp., a start-up backed by cellphone pioneer Craig McCaw. Other big-name backers include cable-TV giants Comcast Corp. and Time Warner Cable Inc., Internet giant Google Inc. and chip maker Intel Corp.

After the deal, Sprint will hold around 51% of the firm, existing Clearwire shareholders will own 27% and the new investors will hold 22%. The deal assumes a price of $20 per Clearwire share. The new company will take on Clearwire’s name and be publicly traded.

The deal gives the cable operators and Google prominent roles in shaping the future of mobile Internet access and a new outlet as growth begins to slow in their traditional content businesses. Intel gains new support for WiMax, a technology standard the company has championed and that will be used in the venture’s high-speed network. The venture must still be approved by federal regulators.

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