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BREAKING: Sprint Nextel And Clearwire To Announce A $12 Billion WiMax Joint Venture

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Sprint (NYSE: S) Nextel and Clearwire (NSDQ: CLWR) are getting ready to unveil a $12 billion joint venture to bulid out a nationwide WiMax network, according to the WSJ. There’s no details yet on whether it would include funding from Intel (NSDQ: INTC) or Google (NSDQ: GOOG), or if the partnership would include cable operators such as Time Warner (NYSE: TWX) and Comcast (NSDQ: CMCSA). More after the jump

The WSJ is now reporting that Sprint has agreed to merge its wireless broadband unit with Clearwire of Kirkland, Wash., which was founded by wireless entrepreneur Craig McCaw. The combined company has reportedly raised a total of $3.2 billion in funding from several sources that were rumored to be interested in a deal over the last several weeks. It includes $1.05 billion from Comcast, $1 billion from Intel, which was already an investor in Clearwire, $550 million from Time Warner Cable (NYSE: TWC) and $500 million from Google. Smaller cable provider Bright House contributed $100 million. WIth the new investments, the company’s value stands at more than $12 billion, according to the WSJ. It appears that one of the other companies that had been rumored to be interested — Best Buy — has dropped out of discussions. USA Today reports another investor listed as putting $10 million towards the venture is Trilogy Equity Partners, a VC firm started by John Stanton, who helped found McCaw’s first wireless venture.

A deal like this is critical on a number of fronts. WiMax was starting to lose ground to a competing technology called LTE, even though it is still in the development phases; Sprint Nextel needed to do something to win over shareholder approval; and the cable operators wanted a way into wireless without making the risky bet on their own; and Clearwire needed more cash to continue its aggressive growth plans. It even gives Google influence over a wireless network, which it has been seeking through regulatory processes up until now. The WSJ says a deal of this kind will still have to get approval from the federal government.

As for some of the logistics, it appears that the company will operate under the Clearwire name, and that Clearwire’s CEO Ben Wolff would hold the same position, and McCaw will continue to be chairman. The company will offer both traditional voice service as well wireless broadband access using WiMax. The cable operators involved will be able to rebrand the service and sell it under an agreement with Clearwire. The deal was expected to close during CTIA about a month ago, but obviously was complicated by the fact that so many heavy-hitting CEOs and giants were involved in the neogications. If the joint venture goes smoothly, it will be a well-funded competitor positioned to stand up well against wireless giants AT&T (NYSE: T) and Verizon (N, YSE: VZ) Wireless.

Not many reports are out yet, signaling that the deal is still really fresh, if not yet quite finalized. A Clearwire spokesperson did not respond immediately to requests for information. Fortune is now reporting that the companies may not talk until 6 a.m. tomorrow (Wednesday), or that the deal still may never occur.

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