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November 14, 2006

Clearwire Expands to Seattle

Clearwire announced a major expansion of their market to cover the Seattle region: The company offers broadband wireless service in a number of US markets, but Everett-Seattle-Tacoma is the biggest single one they have so far. "With the launch of this market, the greater Puget Sound area, we will be making our services available to another 2m people," said Ben Wolff, the company's co-CEO and co-president, in a briefing last week.  Clearwire now serves 360 towns in 32 markets internationally.

(You can hear me discuss this story on KUOW-FM's The Conversation, aired today in the Seattle market, and archived here; my comments start about 20 minutes into the program.)

Wolff said that while the perception is that Clearwire was working the rural Chatauqua, that's no longer the case. "We have certainly built markets that are underserved markets, but if you look at our market today, the vast majority of customers in our market have access to both cable and DSL," he said.

When queried about their current potential coverage area, previously stated by the firm as being comprised of 2.5 GHz spectrum licenses passing 90m Americans, Wolff said that was outdated information. The 90m figure was "at the point in time that we filed our S-1 registration statement" when the firm was planning a potential initial public offering. Clearwire's current spectrum footprint is "dramatically larger," Wolff said, declining to provide additional detail.

Clearwire is competing with wireline broadband firms, but has a significant disadvantage in terms of speed, offering just 1.5 Mbps down and 256 Kpbs up as the top rate ($38 per month, $25 setup, $5/month modem rental or $100 purchase). A lower rate of 768/256 Kbps has the same modem fees and runs $30 per month with a $50 setup fee. A three-month introductory promotion is $20 per month for either level of service.

Much higher rates, up to 5 or 6 Mbps with DSL and cable in parts of many markets, are now available at higher cost. The Seattle Times published a fantastic chart showing what bandwidth costs from many providers in the Seattle area. 6 Mbps over 384 Kbps is $42.95 from Comcast and 5 Mbps over 896 Kbps is $36.99 from Qwest. Of course, this means that you have to qualify for those speeds in the place you live, too, which varies remarkably over metropolitan areas.

On the other hand, Clearwire has the advantage of mobility and simplicity. Wolff noted, "You can go into one of our retail stores today or order over the Web and get provisioned. As soon as you have the modem in your hand," plug it into power, the connection is active. Wolff joked, "It's so simple that even an adult can do it."

Clearwire's service is also nomadic, with the small-format modem working anywhere in the coverage range, and supporting a car-power adapter. This makes it appropriate for a host of mobile occupations, including real-estate agents and a variety of municipal employees. A company spokesperson separately noted a variety of uses of Clearwire in other markets, such as providing a mobile hotspot on buses in Anchorage, providing a method for a local newspaper's photographers to file pictures from the field, allowing mobile classrooms, and giving boat owners access without pulling a wire of any sort.

While cellular data networks offer even higher degrees of mobility with battery-powered portability, the cost is much higher for less throughput, and cellular operators are fixated on the smartphone and the adapter in the laptop--not on a nomadic networked device. Clearwire expects its users will watch videos, share their connection with other computers in the same household, and be used just like a broadband wired connection. Clearwire's acceptable use policy requires users to avoid certain kinds of excessive use, which are fairly reasonable. You can't operate a high-volume Web server, nor can you continuously stream video or transfer files via FTP upstream or downstream.

These guidelines are distinctly at odds with the restrictive terms and services of, say, Verizon Wireless, which expects less than 5 GB of data transfer per month, and contractually allows only Web browsing, email, and intranet application use with its EVDO service. Perry Satterlee, co-president of the firm, said in regards to the company's limitations on user activities, "Because of the nature of our product, we have a much bigger pipe that's available." He noted, "We see ourselves as filling a gap in the marketplace that isn't filled in any other way today."

Wolff said that Clearwire expects to be the affordable backhaul for hotspots, too, offering a complementary service to local Wi-Fi access. And with regards to the metro-scale Wi-Fi networks that are being built today, "You'll see us find ways to integrate and cooperate with the muni-Wi-Fi movement."

Clearwire's expansion brings some concerns that a high customer uptake could congest the network. Wolff dismissed this, noting the efficiencies of their technology choice for managing spectrum. "We are going about building our network today [in a way] that will more than absorb the customers and usage that we expect to see for some time," he said.

Update: A couple minor notes on Clearwire from the Seattle Times' Tech Tracks blog. First, you can use a powerline networking system to distribute incoming access around a home via power outlets. Second, the company employs two security methods: encryption for the local link and obscurity through licensed spectrum.

1 Comment

I used Clearwire a couple of months ago in Boise and I found them to be much more restrictive than advertised. I needed to download a relatively large file (about 120 MB) and I figured it'd be faster to use the Clearwire connection where I was working rather than my Verizon BroadbandAccess card. Less than halfway through the download the Clearwire connection was throttled down to a virtually unusable rate (less than 100 kbps). Needless to say I went back to the Verizon card to finish the download.

Clearwire may be great if you need wireless broadband and you want to avoid cancellation of service for heavy usage, but to me it stinks even worse that they make their service unusable with no notice by restricting your bandwidth.