Comcast to phase out Clearwire service

The cable operator will bundle Verizon Wireless service after selling spectrum to the carrier

At least one of the cable operators that struck a wireless spectrum deal with Verizon on Friday now plans to stop reselling WiMax mobile service from Clearwire.

Comcast, the largest U.S. cable operator, will wind down its Clearwire-based Xfinity Internet2Go service over the next six months, a Comcast representative said Friday. The approximately 30,000 subscribers to the service will be given plenty of notice, the representative said.

Cable operators Comcast, Time Warner Cable and Bright House Network all were investors in Clearwire when the WiMax venture was formed by Sprint Nextel and the former Clearwire wireless broadband company in 2008. The companies announced plans at the time to resell Clearwire's high-speed WiMax wireless data service as a mobile complement to their fixed-line video and data services.

However, the three companies also had acquired wireless spectrum licenses covering 259 million U.S. residents in an auction in 2006, which they never substantially used. On Friday, they agreed to sell those licenses to Verizon Wireless for US$3.6 billion. As part of the deal, which still needs to be approved by the U.S. Federal Communications Commission, the cable operators will be able to bundle their services with Verizon mobile plans.

Representatives of Time Warner and Bright House were not immediately available for comment. Bright House does not resell WiMax service today. Clearwire declined to comment on Friday's deal. Cnet reported earlier on Friday that both Time Warner and Comcast would discontinue their wholesale deals with Clearwire.

Though the cable operators have not provided a large proportion of Clearwire's subscribers through their resale agreements, losing those wholesale customers would make the ailing WiMax operator even more dependent on one partner, Sprint Nextel, to reach consumers. Most of Clearwire's revenue comes from wholesale subscribers, and most of those already buy the service through Sprint. At the end of the third quarter, Clearwire had 9.54 million subscribers, 8.22 million of them through wholesale arrangements.

Access to Verizon's wireless service, which includes voice calling plans and reaches more U.S. residents with 4G, will let Comcast offer subscribers a different value proposition than Clearwire's, the Comcast representative said. The 30,000 subscribers that use Xfinity Internet2Go make up a minuscule portion of Comcast's overall subscriber base, which includes about 22 million video, 18 million Internet and 9 million fixed-line voice customers.

Comcast hopes to start offering bundles with Verizon early next year in four test markets, where it will experiment with a variety of plans.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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