Will cable MSOs come to the rescue of Sprint/Clearwire?

How many times have we heard that cable companies are interested in broadband wireless, particularly WiMAX? But we never heard more than just vague speculation with no names. Now several publications reported this week that cable TV players Comcast, Time Warner Cable and Bright House Networks may invest in a WiMAX network joint venture being discussed by Sprint Nextel and Clearwire. That joint venture, of course, would represent the resurrection of a previous Sprint-Clearwire joint venture that ended after a few short months last year.

This may just be the opportunity cable operators can sink their teeth into given the fact that such a deal would represent a relatively modest investment vs. building their own capital-intensive networks--something investors aren't so keen about given the fact that wireless isn't a core business. The cable companies are reportedly in talks to invest as much as $1.6 billion.

Interestingly, Cox Communications won 14 A-Block licenses and eight B-Block licenses totaling about $304 million in the recent 700 MHz auction, but it's also a private company that doesn't have to answer to shareholders. Moreover, Cox, Time Warner Cable and Bright House's parent Advance/Newhouse make up SpectrumCo, the cable consortium that won licenses in the Advanced Wireless Services (AWS) spectrum in 2006. We haven't heard a word on what the consortium's plans are for the spectrum, which they paid $2.37 billion for, but the WiMAX Forum reportedly is working on creating an FDD WiMAX profile for the AWS band [1].

When it comes to wireless, it seems to be a confusing time for the cable industry, which has witnessed failed wireless forays from other companies whose core business isn't wireless. (Earthlink, for instance). And Pivot--the much-hailed $200 million joint venture between Sprint and cable companies Comcast, Time Warner Cable, Cox Communications and Brighthouse Networks--appears to be in trouble [2]. The JV had aspirations to offer consumers the elusive quad-play by providing them with a combination of wireless, fixed, video and Internet services from one provider with one bill. But expansion of the service was stopped last November.

Still, the wireless spectrum cable operators do own could offer strategic complementary services such as TV delivery and total wireless/wireline broadband packages not to mention quadruple play services.

Cable operators just need to figure out how much control they want. An investment in Clearwire/Sprint would give them a wireless play they seek with less risk but also less say over services. They could develop a co-branded mobile Internet portal that will allows users to access email, search the Web and chat over the wireless broadband WiMAX connection or come to some sort of MVNO agreement.--Lynnette [3]

P.S. Join me today as I lead a discussion about fixed mobile convergence between Kevin Kvarda, manager of engineering at T-Mobile USA and representatives from ABI Research, PicoChip, Kineto Wireless and NextPoint. Register for this free webinar taking place today at 2 PM EST and learn more about T-Mobile USA's Hotspot@Home service, as well as other ways carriers can tackle the fixed mobile convergence trend. Webinar Registration [4]