Seattle's Clearwire WiMAXes Out, But Stocks Fall

When we were dissing Clearwire the other day, we had no idea a deal this big was in the works. In fact, plenty of people thought the writing was on the e-tablet for Clearwire after its WiMAX deal with Sprint fell through six months ago. But you can't count Craig McCaw out.

The P-I reports:

Intel, Comcast, Google, Time Warner Cable and Bright House Networks have agreed to invest $3.2 billion in the company, which will retain the Clearwire name, stock ticker and Kirkland headquarters. Adding to that investor syndicate is Trilogy Equity Partners, the Seattle-area venture capital firm led by former VoiceStream Wireless and Western Wireless Chief Executive John Stanton. Trilogy plans to invest $10 million, and Stanton plans to the join the board.

The plan is to roll out a nationwide WiMAX network by 2010, with a coverage zone that includes 120-140 million people. (Sparsely populated rural areas need not apply.) WiMAX (known as "WiFi on steroids" for its kilometers-wide coverage) also brings the possibility of startlingly fast download speeds. Clearwire is talking about 5-6 Mb/s "in a moving car" but that's at the slow end of the range. Of course anything has got to be better than that "up to 1.5 Mb/s" they currently offer.

Yet Clearwire's shares plunged almost 15% on the news of the deal:

"Being a start-up using evolving technology with an unproven model, we believe a $14.5 billion valuation for the company is too high," UBS analyst John Hodulik said in a research note, referring to the fact that WiMax is a largely unproven technology.

Unproven? Worldwide there are about 2.2 million WiMAX users currently, mostly places that lack physical infrastructure and want to leapfrog ahead to wireless.

Places like Portland, which is Clearwire's U.S. beta-test. We're not sure if that's smack on Portland or on us, given that Clearwire is based in Kirkland and was founded by local entrepreneur Craig McCaw. Oh, what the hell. Let's say it's smack on Portland, at least until they get their free Google mobile phones and jetpacks. Then we'll throw our americano in their face, grab the phone, and run.