As long rumored, Sprint Nextel today announced a joint venture with Comcast, Cox Communications, Time Warner Cable and Advance/Newhouse Communications to accelerate wireless-wireline convergence to the more than 75 million homes passed by the four cable companies. The partnership the companies outlined today does more than add a wireless option to the MSOs’ bundles, however; it is designed to integrated mobile/cable content service, which will allow customers to receive cable programming on their cell phones, among other things.

Sprint has been positioning itself as what its COO Len Lauer called “the perfect partner for the cable industry” and already was in MVNO trials with Time Warner Cable. The joint venture is not an MVNO, however, but is organized to enable each player to retain the full benefits of its customer base. Under the joint venture, each cable company will launch its own co-branded wireless service with Sprint. While the wireless service will be billed back to the customer through the cable company, the arrangement is distinctly different from an MVNO model since the cable companies partnering with Sprint, not buying wholesale minutes off the network. Because Sprint is national and soon is expected to spin off its small local exchange operation, the company is well positioned to partner with cable. Its two principal competitors, Verizon Wireless and Cingular Wireless, are both primarily owned by RBOCs and thus arch competitors with MSOs.

Comcast chairman and CEO Brian Roberts said that the four cable operators in the venture have been in discussions for over a year, debating options such as forming a joint MVNO or purchasing their own spectrum and infrastructure to launch services over a shared network. But he said the companies found that a joint venture with a major wireless provider was the best option, allowing cable operators and Sprint to run their respective businesses and making it easier for other cable providers to enter the consortium. All of the other MSOs have been invited to join the venture, and Charter Communications as well as several small independent operators are currently in discussions with the five original partners.

“The elegance of this model is that Sprint has the mobile customer and we have our three products,” Roberts said. “All of the revenues from wireless flow to Sprint. All of the revenues from voice, video and data flow to the cable companies.”

The venture enables the cable players to add wireless to their triple-play bundle, thus negating any advantage that major telephone companies would have in bundling in the wireless services they already own in their broadband package. In addition, the venture would add content for Sprint Nextel to deliver to its 46 million wireless customers. One of its early goals is to develop a new co-branded wireless device that integrates cable with Sprint’s EVDO wireless data services and enables services such as integrated messaging, remote programming of digital video recorders and photo storage/sharing.

The partners, however, appear to have even bigger plans for the service after the initial launch. At a demonstration of what the new service would look like, the companies showed a mock phone with a content interface closely resembling the menu and programming guide page of a digital cable feed. From that menu, customers could not only see programming schedules and remotely programming their DVRs, but could watch live programming from several different stations, effectively putting the cable box in the customers handsets. Though Sprint and its cable partners were light on the details, the service could be the result of integrating Sprint’s own streaming TV feeds--powered by MobiTV--with the cable companies content partnerships. The companies stressed, however, that each content service would be unique to the individual cable provider.

“We’re not just stapling a cell phone to cable service,” said Glenn Britt, chairman and CEO of Time Warner Cable. “We can apply our imaginations to this platform and each do different things.”

The 20-year agreement is mutually exclusive for the first three years and will include a $100 million investment by Sprint and a combined $100 million from the four cable companies that is expected to grow over time. The money will be used to develop converged services and back office integration and to market the venture.

The companies plan to hit the ground running, developing its “quad play” as well a mobile video content as early as 2006. They will sell and market their co-branded products and services through Sprint's 1600 retail stores, as well as cable retail outlets and other third-party distributors, including RadioShack stores.