Comcast, Time Warner to end wholesale deals with Clearwire in wake of Verizon agreement

Comcast and Time Warner Cable plan to end their wholesale deal with Clearwire (NASDAQ:CLWR) now that the MSOs are selling their nationwide AWS spectrum licenses--which have been held in the SpectrumCo joint venture of Comcast, Time Warner Cable and Bright House Networks--to Verizon (NYSE:VZ) for $3.6 billion.

Both Comcast and Time Warner plan to quit selling Clearwire's WiMAX service in about six months. WiMAX sales have been dismal. Comcast has about 30,000 WiMAX users to go along with Time Warner Cable's 27,000. The companies' deal with Verizon includes the idea that the cable companies and Verizon will become agents to sell one another's products and, over time, the cable companies will have the option of selling Verizon's service on a wholesale basis. Additionally, the companies have all formed a new innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services.

Comcast told Light Reading Cable that the decision also factors in the MSO's 3G products that it resells from Sprint. "We will wind down the customers on the Sprint/Clearwire 3G/4G data cards within the next six months," the company told the publication.

A Time Warner spokesman said the company's wireless offering "can become exclusive to Verizon in as soon as six months," but expects to continue to service its remaining Clearwire customers after that time.

Despite the decision to sever the wholesale relationship, Comcast's, Time Warner's and Bright House's stakes in Clearwire remain intact.

The MSOs are expected to begin selling Verizon services sometime in 2012. The companies will also have the ability to license products and services to other cable and satellite service providers.

Verizon said it intends to acquire the 122 AWS licenses held by SpectrumCo, which covers 259 million POPs. The cable companies paid $2.4 billion for the spectrum in a 2006 FCC auction. Since Comcast owns 63.6 percent of SpectrumCo it will receive around $2.3 billion from the sale. Time Warner Cable owns 31.2 percent of the venture and will get around $1.1 billion, while Bright House Networks owns 5.3 percent of SpectrumCo and will get around $189 million.

For more:
- see this Light Reading Cable article

Related articles:
Verizon to buy SpectrumCo's AWS spectrum for $3.6B
Verizon and Leap trade spectrum for LTE, EV-DO buildouts
If the AT&T acquisition collapses, what will T-Mobile USA do?
Could Sprint use Cox and SpectrumCo AWS spectrum to launch LTE?
Can the cable industry succeed at wireless?

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