Seybold: The New Clearwire- Will it succeed?

Andrew Seybold

There has been a lot of positive press about the "new" Clearwire, a company that was put together from the original Clearwire, Sprint's Xohm, Google, Comcast, Intel and a few other players. This new company also received an infusion of $3.2 billion on top of what has already been spent by Clearwire and Sprint. The consensus in the press is that this new wireless broadband system will now have a chance to succeed.

Well, once again, I am one of the few who don't agree. Others point to the fact that the effort is led by Craig McCaw who has a "Midas" touch when it comes to wireless, that is unless you go back and look carefully at his track record and then you will find that perhaps it is not as good as myth has it.

But the real problem with the network is that those building it and those pouring money into it are hyping the capabilities of the network to the point where it will be a disappointment when it is turned on. WiMAX, as it is being deployed by Clearwire, is a 3G technology, not, as many people are saying, a 4G technology. The first true WiMAX mobile installation is being completed in Portland and Sprint has done a "soft launch" in Chicago, Baltimore and Washington, D.C. At this point, we have no published data from tests being conducted on the network. Nor do we have any results when it comes to speeds and network capacity. It is odd to me that we are still only hearing about the speeds that are predicted and not real-world speeds that have been measured in the field.

The big driver for this network is that it be what Google wanted from the 700 MHz auction--a completely open network, capable of being used for any information from any source. Any device capable of WiMAX can be purchased in a store and added to the network quickly and easily. There will be no walled garden. There will be nothing preventing you from getting to anything you want including Google searches, streaming audio and video, large files and more. Of course, Intel will be building a WiMAX chipset for inclusion in any notebook and any Internet appliance. In fact, Intel's vision extends to game devices, navigation systems and perhaps even items such as dog collars.

You will be able to buy a combination device that will enable you to use the Sprint CDMA network for voice and WiMAX for data. Or you will be able to buy a device that will enable you to use the Sprint EV-DO network for broadband data while the Clearwire network is being rolled out. When you are not in a city that has WiMAX, you will be able to use the existing Sprint high-speed network. My guess is that the existing Sprint network will have speeds and coverage that is so much better that people will wonder why they bothered with WiMAX. But that, too, will be due to the wave of hype in advance of the system.

We are being promised a fully open network, voice and data (VoIP on WiMAX), that will "deliver four times the throughput of other technologies at one-tenth the cost," according to Barry West, the then President of Sprint's Xohm 4G business unit that is now a part of Clearwire. Well, if you start adding up what Clearwire has spent plus what Sprint has spent, plus the new funding put into this new company, you end up with billions in costs. By the time they are done, they will be nowhere close to one-tenth of the cost of existing 3G systems. Consider this: To cover 75 percent of the U.S. population (not land mass) in the new 700 MHz band, you will need about 22,000 cell sites. To cover this same population at 2.5 GHz, which is where the Clearwire system is being built, you will need 65,000 cell sites.

WiMAX is not a bad technology. The current version has not been well designed for true mobility. It is a 3G wireless technology and it will be used in many places where there is no infrastructure available today. However, in an environment where there are three established broadband networks (soon to be four with T-Mobile joining the fray), I am not sure I would want to invest the billions it will take to build this system, especially when 4G technologies such as LTE and UMB are less than two years away from being deployed.

One final note here--no matter what is claimed, wireless bandwidth is shared bandwidth. A truly open network without any limitations as to who can download what and when could mean that some customers will have very slow connections while the kids next door stream their videos onto their devices. I wonder what those who believe Clearwire has to succeed because Craig McCaw, Sprint, Intel, and Goggle will make it succeed, will say when it doesn't.

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide.