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A Fast Move from Intel and McCaw

By Cliff Edwards All of a sudden the fledgling WiMax market is getting interesting. Chipmaker Intel (INTC) has been heavily promoting the wide-area radio-networking technology as a great way to break free of cords and cables and deliver superfast Web surfing pretty much anywhere. But many U.S. cellular and local-phone companies have barely acknowledged these possibilities, as they pursue other technologies like fiber and next-generation cell networks.

That may change significantly with Intel's announcement Oct. 25 that it plans to invest an undisclosed sum in cellular industry pioneer and billionaire Craig McCaw's latest company, Clearwire. The two plan to collaborate on WiMax standards, and Clearwire will use Intel's upcoming chips in its networking equipment.

FAST AND CHEAP. McCaw already owns significant wireless spectrum across the U.S. and is deploying fixed-wireless broadband similar to WiMax in parts of Mexico and Canada. He recently debuted the service in Jacksonville, Fla. McCaw's endorsement of Intel's technology could bring significant new competition to entrenched wireless players.

It also could upset common thinking that WiMax first will spread in Asia and parts of Europe before reaching U.S. shores years from now. "We see this as an opportunity to complement our existing technology with an even better approach to wireless that enables us to serve broad geographic areas," McCaw says.

Intel Executive Vice-President Sean Maloney believes WiMax could be a disruptive technology for broadband providers, including both cable and digital subscriber line (DSL) companies, when it begins to roll out in late 2005 and early 2006. It offers speeds that can approach 30 megabits a second, at just a fraction the cost of deploying other technologies.

GATHERING STEAM. For instance, Verizon (VZ) on Oct. 21 announced plans to introduce its advanced fiber-optic broadband technology to six Northeast states. But some Wall Street analysts have questioned whether the carrier can recoup the billions of dollars it will take to tear up streets and garden beds to bring such connections to the home, particularly as intense competition from cable companies could lead to broadband price wars.

"Carriers, equipment makers, and solution providers around the world are moving quickly to lay the foundation for building this new global network," Maloney said during an opening keynote address at the CTIA Wireless trade show ending Oct. 27 in San Francisco.

Intel isn't wasting any time. It has committed to investing at least $150 million to popularize WiMax. The chipmaker also is signing up heavyweights such as Cisco Systems (CSCO), Alcatel (ALA), Nokia (NOK), and Symbol Technologies (SBL) to push the technology. And with McCaw now aboard the WiMax express, the high-speed wireless war may be intensifying. Edwards is a correspondent in BusinessWeek's Silicon Valley bureau

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