New Clearwire Is Official

It's official - Sprint is subsuming its Mobile WiMAX business unit - Xohm into a new version of Clearwire.

The press releases:

• Sprint Nextel
• Clearwire
• Comcast (PDF) and supporting PowerPoint slides (PDF)
• Intel
• Google (blog post rather than a corporatespeak press release - bless 'em!)
• Time Warner Cable (nothing found on their website)
• Bright House Networks (nothing found on their website)

Some things that jumped out at me from reading the press releases:

• One of the key things that the cable companies got, and may well have been more important to them than helping birth a national Mobile WiMAX network, was to get access to Sprint's 1.9 GHz CDMA  on terms that were finally satisfactory to them.
• Sprint Nextel's and Clearwire's respective involvement reminds me of the old joke about what the chicken and pig respective parts of a ham and egg breakfast - the chicken contributed, but the pig was committed. Similarly, Clearwire is committed - it will be subsumed into this new structure. In comparison, Sprint will "contribute" - its spectrum, etc. will be contributed into a subsidiary of Clearwire... so it won't be completely "melded" into the new Clearwire... just in case. Undoubtedly, this was a sticking point, but Clearwire didn't have a choice other than to go along with Sprint's wishes. Without Sprint's spectrum to build a fully national network, Clearwire didn't have enough potential scale to justify new investments - it's momemtum had stalled.
• Kirland, Washington wins big - they'll be the host city for the headquarters of the new Clearwire. Expect lots of Kansas folks to migrate - they'll be in for some serious sticker shock. Welcome to the Eastside, Barry West! In taking up the coffee habit, I can recommend Tully's.
• The total transaction amounts to about $14.5B, but the new funding amounts to a "mere" $3.2B. Google committed to twice that in the 700 MHz auctions which had far less potential impact than a national Mobile WiMAX network operating in 190 MHz of spectrum at 2.5 GHz. Google, had it chosen to do so, could have easily contributed the $6B or so and eclipsed the cable operators and become much more important... perhaps the primary... influence within the new Clearwire. In my opinion, it should have done so.

This deal has a lot of moving parts, and apparently requires regulatory approval, and won't be finalized until the last quarter of 2008. A lot can happen. But, in all likelihood, it will - Dan Hesse needs to get Mobile WiMAX off his plate and move onto fixing Sprint's CDMA business and jettisoning Nextel and the 800 MHz mess. Clearwire simply can't move forward without this. Their current offering of DSL speed Broadband Internet Access using the proprietary Expedience system, even with a PCMCIA card and the rumored  Express Card providing "kind of mobile" service, and a telephony offering (by all accounts, pretty crappy).

I wish new Clearwire well. But it's telling that within a couple of months, I plan to be an ex-Clearwire customer. Verizon wooed me, successfully, with 15 Mbps symmetric Broadband Internet Access FIOS service at my house for about the same price as I pay for Clearwire service. I'll still do Broadband Wireless Internet Access, for now, with 1xEV-DO Rev. A from Sprint Nextel. New Clearwire can make a huge impact, but by continuing to deploy proprietary systems, they're falling further behind in the fight with fiber, DOCSIS 3.0, 1xEV-DO Rev. A, and HSPA, and the steadily increasing sophistication and availability of Wi-Fi HotSpots.

By Steve Stroh

This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

This article was written and posted via Broadband Wireless Internet Access (BWIA); free Wi-Fi at Tully's Coffee in Woodinville, Washington.