Wireless War: The 4G Battle Lines Have Been Drawn

Sam Gustin writes: The battle over so-called 4G wireless technology is heating up, with major industry players choosing sides between WiMax and LTE, or Long Term Evolution.

Nortel, the Canadian telecommunications equipment manufacturer, gave LTE a boost Wednesday when the company said it would devote its main research efforts to that standard, and hand over its WiMax development to an Israeli company called Alvarion.

"This enables Nortel to achieve faster time to market with WiMAX at a lower cost, while accelerating LTE development to meet a demand that is emerging faster than the industry originally predicted," Nortel said in a statement.

Investors were enthusiastic about Nortel's new strategy, sending the company's shares up over 13 percent in trading Wednesday.

Nortel's decision to fully embrace LTE comes one month after Sprint Nextel and Clearwire, the telecom startup founded by cell-phone pioneer Craig McCaw, announced a $12 billion joint venture to build a nationwide WiMax network offering superfast wireless service for cell phones and laptops.

The Sprint-Clearwire WiMax initiative has attracted powerful backers, including Intel, Google, Comcast, and Time Warner Cable, which are collectively injecting $3.2 billion in financing into the project.

WiMax has been highly touted as the successor to WiFi, and though it is still largely unproven, its backers say that it offers speeds of up to five times faster than existing wireless networks over much greater distances.

LTE, which has garnered increasing buzz lately, has attracted formidable backers of its own, including AT&T and Verizon Wireless.

With the battle lines over fourth-generation being drawn, the playing field is set for a showdown over what could be the next great technology format war.