Spinning off WiMAX - Danger, Will Robinson

So I watched a piece on the possible investment by Comcast and Time-Warner in the likely spin off (as I noted a long time ago) of Sprint's WiMAX operations on CNBC today (there was also an article in the WSJ). CNBC is usually pretty good for such reporting, by the way; I do worry about how much their anchors actually know, but the frequent guests are all clearly investment professionals and usually have the facts to back up their opinions. I often leave CNBC on in a window on my display, just in case something is going on.

Anyway, the idea of a cable company investing in WiMAX (or other wireless technology) makes sense at first glance. Cable availability in the US is quite good, with on the order of 80% of US households passed by cable today, and continuing investment by Verizon (FIOS) keeps everyone on their toes. Of course, all we care about here is broadband, not all that awful, overpriced, commercial-laden TV programming. WiMAX, and especially mobile WiMAX, seems complementary with cable of any form, and might even be able to handle some amount of mobile TV service to boot. So this looks like the cable guys boldly going where they need to go with what could be a momentum-building complementary service. Bundling wired and wireless together could in fact boost revenues with relatively minor additional expense - installing more cable is a lot more expensive than putting in base stations.

On the other hand - this is me being skeptical again - might it be that the cable guys want to invest to slow down the availability of broadband wireless, which, if purely competitive with cable and unencumbered by the wishes of the cable operators, would be just that - competitive? We might find limited availability, higher prices, and assorted other restrictions. In short, to protect their current franchise, the cable guys might limit their return on investment in WiMAX. When they get ready to cash out they just turn up the volume and everyone goes home happy - except the customers.

Such does happen from time to time. One of the reasons that the initial 802.11 standard took so long to produce (about seven years) was that the technology really wasn't mature enough to standardize. But another is that marketing types intentionally and cleverly slowed the process to protect their current proprietary product lines, thus enhancing the ROI on old, less-capable stuff. Eventually, everyone in this case also went home happy. But the customers needed to wait for .11, and many didn't move until .11 was done. But today, if the cable guys do slow WiMAX, there are other alternatives. Wi-Fi and HSPA/LTE could both profit from such a strategy.

WiMAX in the US has enough problems without its supporters acting in less than its best interests. Please note I'm not saying that this is the case here - just that it might or could be. But if I had to bet...