Update

It's official. Sprint and ClearWire are combining their WiMAX business to form a new joint venture. Sprint will have 51 percent ownership, ClearWire 27 percent, and new investors Intel Capital, Time Warner Cable, Bright House, Google, and Comcast will own 22 percent. That 22 percent stake cost $3.2 billion. Sprint and ClearWire's investment will consist primarily of their spectrum holdings. The new company will keep the ClearWire name, and will own enough spectrum to blanket the US with WiMAX, with an eye towards serving half the US population in 2010.

Original story follows

Sprint is a step closer to fulfilling its plans to blanket the nation in wireless broadband signals, with the help of WiMax specialist ClearWire and a consortium of big-time financial backers.

The Wall Street Journal's usual insider sources report (subscription) that Clearwire has agreed to merge with Sprint's wireless broadband division in a new, as yet unnamed, joint venture. The deal has financial support in the form of $1.05 billion from cable giant Comcast, $1 billion from chip champ Intel, $650 million from Time Warner Cable and its subsidiaries, and $500 million from search Brobdingnagian Google. That's a grand total of $3.2 billion of outside investments, plus whatever cash Clearwire and Sprint might bring to the table.

Don't expect Sprint itself to bring a fat dowry, though. The company has about $2.4 billion in cash equivalents, but also a staggering $20.5 billion debt load. Sprint is trying to sell off its Nextel unit, which was acquired for $35 billion in 2005, but reports on that effort say that Nextel is only worth about $5 billion today. And ClearWire is in a similar situation of more debt than cash, albeit on a much smaller scale.

So the new WiMax venture would start to build out its infrastructure with mostly other people's money. That will probably work—once the wheels start rolling, even a full-on bankruptcy would most likely only transfer control of the network to the debt holders or some rich, daring acquirer.

Touted as a viable wireless broadband alternative, WiMAX has lurched out of the gate so far. Sprint had planned to launch its Xohm WiMAX network by now, but public availability is on hold as Sprint attempts to work out some serious backhaul issues. Lurking on the horizon is LTE, the 4G wireless tech favored by rivals AT&T and Verizon. Fortunately for Sprint, LTE is still in development and the first commercial deployments are at least two years out. Still, WiMAX is approaching put-up-or-shut-up territory in the US, and the Sprint-ClearWire joint venture may be enough to push it from its perpetual Real Soon Now™ state and into reality. High-speed wireless broadband is music to our ears, and someone will eventually figure out how to do it profitably and do it well. SprintWire is off to a good start.