Let's Make a WiMAX Deal

Q: What do you get when you combine an über capitalist (Craig McCaw), a heavily hyped network technology (WiMAX), and established corporations (Intel and Motorola) looking to protect and expand their turf?

A: A $900 million deal that could have a huge impact on the future of broadband wireless networking.

In 2003, McCaw, an early cellular entrepreneur, bought Clearwire, which provides broadband wireless Internet using licensed spectrum in the 2.5-GHz band. The company currently offers service in 200-plus cities and towns worldwide and is reportedly capable of reaching more than 90 million U.S. households. Clearwire had planned a $400 million IPO but scrapped that plan in early July when it received investments totaling $900 million from Intel Capital and Motorola Ventures.

What's Intel's angle? It wants to promote Mobile WiMAX (802.16e), a technology central to its strategy to blend Wi-Fi and WiMAX into a powerful wireless mix. Ironically, Clearwire doesn't use WiMAX on its network ... yet. That will soon change thanks to a planned supply partnership with Motorola, which will take over Clearwire's NextNet subsidiary--which serendipitously manufactures proprietary broadband wireless network access gear that overcomes the line-of-sight requirements plaguing earlier-generation products, making service much easier to deploy. We expect Motorola to leverage that technology as part of its own WiMAX product portfolio.

Now that McCaw and crew have the backing to build out a network, we could answer the million-dollar question: "Is there money to be made from wireless broadband?" McCaw's past two initiatives, XO and Teledesic, have been market failures, but perhaps, as they say, the third time is the charm. --Dave Molta, [email protected]