NTCA's The New Edge » Clearwire

Fall Out from the SpectrumCo./Verizon Wireless Deal

Jesse Ward — Mon, 12 Dec 2011 21:02:43 +0000

The industry continues to experience fall-out from Verizon’s recently announced spectrum purchase and joint sales, technology and marketing partnership with the cable industry.

Comcast is moving quickly. While the spectrum sale will likely take up to 12 months to receive regulatory approval, Comcast Cable President Neil Smit announced last week that the cable company will begin bundling Verizon Wireless services in four markets in early 2012. ”The teams are already engaged; they are great commercial arrangements and we think we’ve put together great packages that combine the best of the various bundles,” Smit said, while speaking at a UBS investor conference.

The offerings may not be a quad-play of wireless, video, voice and data. Instead, Comcast may offer a triple-play containing three of the above products and/or a home security component. “It offers us a couple of different combination plays and ultimately more choice for the consumer,” Smit said. He also confirmed that Comcast will continue to compete with Verizon Wireless’ parent company Verizon Communications in markets where it offers its FiOS TV and Internet service.

In addition, Time Warner Cable also is pro-actively incorporating existing Verizon Wireless products into its bundled packages, starting almost immediately. However, speaking at the same investor conference, Time Warner Cable Chief Financial Offer Irene Esteves said it was too soon predict what new products it might bring to market with Verizon Wireless, or when those products will be available.

In related news, Clearwire is facing major repercussions from the spectrum deal. As you might remember, back in 2008, Comcast, Time Warner Cable, Bright House, Intel and Google invested in Clearwire. The plan was for the cable companies to utilize Clearwire’s planned nationwide WiMax network as the mobility component of their bundled packages. Unfortunately things did not go as planned. Clearwire’s funding did not stretch as far as it has planned, and new technologies such as LTE surpassed WiMax. All of the cable partners declined to continue funding Clearwire, which received a last minute cash infusion from its largest partner Sprint just last month.

As expected, Comcast confirmed last week that it plans to discontinue its customer relationships with Clearwire. Comcast’s Infinity2Go service, which utilizes the Clearwire network, will be taken offline during the next six months. However, Comcast said it plans to retain its 9% equity stake in the WiMAX provider “for the foreseeable future.”

On the heels of the spectrum deal and Comcast’s departure, Clearwire announced last week that it will seek $300 million in a new public equity offering. Sprint has said it will buy an undisclosed number of private voting shares of Clearwire.

For its part, last week Verizon CEO Lowell McAdam stated at an industry event that the company will now discontinue its fixed LTE trials with DirecTV. However, in a statement given to FierceWireless, Verizon spokesman Jeffrey Nelson maintains that the conclusion of Verizon’s trials with DirecTV were not a result of Verizon’s partnership with the cable companies. Further, Nelson reports that Verizon continues to hold discussions with DirecTV on LTE, although the company has nothing new to report out of the trial.

Verizon to Acquire Large Chunk of AWS Spectrum via Cable Companies

Jesse Ward — Mon, 05 Dec 2011 17:02:52 +0000

Verizon Wireless announced last Friday that it has agreed to pay $3.6 billion to a consortium of cable providers for 122 advanced wireless services (AWS) spectrum licenses covering approximately 259 million people, or more than 85% of the U.S. population.

As part of the purchase agreement with SpectrumCo LLC — a joint venture controlled by Comcast Corp. which includes Time Warner Cable, Inc. and Bright House Networks -– the cable companies will be able to re-sell Verizon Wireless services on a wholesale basis, adding wireless to their service bundles. For its part, Verizon Wireless also will be able to sell the cable companies’ services. It’s unclear at this time if Verizon will choose to market the cable companies’ wired services in areas where is also is the incumbent telco.

Additionally, the cable companies and Verizon Wireless said that they “have formed an innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services.”

SpectrumCo’s sale and transfer of its advanced wireless spectrum to Verizon Wireless is subject to approval by the FCC and review under the Hart-Scott Rodino Act and other customary conditions.

SpectrumCo paid nearly $2.38 billion in 2006 for its spectrum holdings, which it won at the FCC’s AWS-1 auction. Technically, it was enough to make the venture the nation’s fifth largest wireless provider. There was speculation that the companies would attempt to build and operate a wireless network, but the majority decided to take a wait-and-see approach to their spectrum assets. Initially, the venture included Sprint Nextel Corp., which dropped out in 2007, and Cox Communications, which first attempted to build a wireless network and then withdrew its cards in 2009, taking cash and spectrum interests with it.

Of note, all of the cable companies which stand to benefit from this transaction also are investors in Clearwire. In fact, Comcast and Time Warner Cable now market Clearwire’s 4G WiMAX services. In all likelihood, this deal means that the cable industry will have to exit the Clearwire venture. It also raises questions about whether Sprint will have to take on additional equity to keep Clearwire afloat.

Needless to say, this arrangement also further shines a spotlight on the AT&T-T-Mobile acquisition, which AT&T has said is all about acquiring AWS spectrum. Verizon has just taken away one option by which AT&T could acquire spectrum if the merger does not go through as proposed.

For more, see this release.

What’s Next for Dish? LightSquared?

Steve Fravel — Mon, 26 Sep 2011 19:17:07 +0000

According to an article published by Bloomberg, Dish Network might partner with or buy its way further into the wireless business. Earlier this year, Dish Network, the nation’s second largest satellite entertainment provider, acquired spectrum in transactions that resulted in the purchase of DBSD America and Terrastar Network. Last month, in a paper filed at the FCC, Dish Network requested permissions to offer mobile high-speed Internet services to its customers.

Speaking with Bloomberg, Dish Network CEO Joseph Clayton said, “We’ll look at partnerships, acquisitions, all of the above,” in response to whether Dish was considering purchasing or partnering with Clearwire or Sprint. He added, “there are several missing pieces, wireless infrastructure, additional technology capabilities and even distribution are pieces that we are working on. Stay tuned.”

This all leads to the question of what Dish’s plans mean for LightSquared, who previously announced a deal with Sprint. LightSquared must pass through more rounds of testing and verification to clear the way for its wholesale wireless distribution service. The GPS industry, the Department of Defense, Federal Aviation, and agricultural and surveying interests are all on record opposing LightSquared due to demonstrated interference in the spectrum. LightSquared published an open letter in major newspapers this morning designed to take the issue to the underserved.

It’s important to note that Dish Network’s spectrum band does not create interference with GPS applications.

Options for Clearwire?

Steve Fravel — Mon, 22 Aug 2011 19:00:47 +0000

According to a Bloomberg report, nearly all the parties with a financial interest in Clearwire are discussing just what to do with the wireless broadband provider. Sprint is the majority investor, with Comcast, Time Warner Cable, Cox Communications, Cablevision Systems and Bright House owning minority shares of the venture.

The Bloomberg report indicates that without a funding infusion, Clearwire will be out of money at the end of 2012. Clearwire has announced a plan to role out 4G LTE technology as an overlay of its existing mobile WiMax network.

Possible outcomes could include Sprint providing additional investment dollars or acquiring Clearwire outright. The report went on to add that no deal is imminent, but Clearwire’s Executive Chairman John Stanton is in discussions on several possibilities, including alternatives with outside parties, equity investments by these outside parties, or a sale of assets.

LightSquared Over the Hump?

Steve Fravel — Mon, 20 Jun 2011 19:21:56 +0000

As we reported last week, LightSquared had been testing possible remedies to a looming GPS interference problem. Today, LightSquared outlined what the operator is calling a “comprehensive solution” to the interference issues.

As part of its proposed solution, the company will no longer launch its network in a 10 MHz chunk of its spectrum that tests showed caused interference with many GPS receivers. Instead, LightSquared said it recently reached an agreement with Inmarsat, the satellite company that controls an alternative 10 MHz block of spectrum in the L Band, to gain access to a lower spectrum band sooner than it initially anticipated. This new block is located further away from the GPS frequencies.

“Test results show this lower block of frequencies is largely free of interference issues with the exception of a limited number of high precision GPS receivers that are specifically designed to rely on LightSquared’s spectrum,” the company said in its press release.

Further, as part of this revised plan, LightSquared will modify its FCC license to reduce the maximum authorized power of its base-station transmitters by over 50%. This action will limit LightSquared to the power it was authorized to use in 2005.

LightSquared says that this new plan will provide the operator with enough spectrum to serve its growing customer base for the next several years. LightSquared will use this time to work closely with the FCC and the NTIA, as well as the relevant U.S. government agencies and commercial GPS users to explore mitigation possibilities and operational alternatives.

“This is a solution which ensures that tens of millions of GPS users won’t be affected by LightSquared’s launch,” said Sanjiv Ahuja, chairman and CEO of LightSquared. “At the same time, this plan offers users a clear path for LightSquared to move forward with the launch of a nationwide wireless network that will introduce world class broadband service to rural and underserved areas which still find themselves on the wrong side of the digital divide.”

The jury is still out if the operator’s proposed solution fully addresses concerns from the GPS industry and U.S. governmental agencies, and if the solution also will still enable LightSquared to develop a comprehensive, nationwide 4G network.

In related news, LightSquared is reported to have sent letters to its shareholders with details of a deal in development with Sprint Nextel. According to Bloomberg, Sprint Nextel has reportedly reached a 15-year network-sharing deal with LightSquared worth approximately $20 billion, where Sprint and LightSquared will build LightSquared’s nationwide network, and Sprint will be a wholesale user of LightSquared.

This may have implications for companies in the cable industry. The arrangement will allow the LightSquared 4G wholesale network to be jointly deployed nationwide. Comcast, Bright House, Time Warner Cable and Cox all have an interest in Clearwire, Sprint’s WiMAX 4G venture, or Sprint directly.

For Clearwire this represents a question moving forward. LightSquared plans to provide nationwide 4G LTE capabilities, while Clearwire is a 4G WiMAX network. Will the networks compete for customers? Will there be a co-mingling? How will this development affect the cable interest?

For more on LightSquared’s last-minute GPS interference solution, see this press release.

Clearwire Faces Uncertain Future, Conserves Operating Cash

Jesse Ward — Mon, 08 Nov 2010 18:08:25 +0000

Despite posting record subscriber and revenue growth in the third quarter, Clearwire disclosed late last week that it may not have enough funding to continue operating its mobile WiMAX business.

“Our expected continued losses from operations and the uncertainty about our ability to obtain sufficient additional capital raises substantial doubt about our ability to continue as a going concern,” Clearwire said November 4 in a filing.

In an effort to conserve cash, Clearwire announced that it is taking a variety of “temporary” measures designed to conserve cash flow, including:

substantially reducing sales and marketing,
delaying plans to launch Clear-branded smartphones from Samsung and HTC,
suspending Clear-branded operations in select markets including Denver and Miami,
decreasing the number of contractors it employs as well as 15% of its workforce, and
suspending development activities for cell sites that are not part of its current buildout plan.

Clearwire said it may run out of cash as early as mid-2011. The cost-cutting measures are expected to save between $100 million and $200 million this year, and the same amount in the first half of 2011, but that is not expected to cover the shortfall. In fact, the company is not disclosing how much money it will need.

The company said its network now covers 100 million POPs and it is on track to cover 120 million POPs by year-end. Clearwire also said it expects to have more than 4 million customers by the end of the year, double what it had predicted at the beginning of the year and an increase from 2.84 million at the end of the third quarter.

For more on Clearwire’s third quarter growth, see this release.

Clearwire and Sprint to Launch WiMAX Service in Big Cities

Jesse Ward — Mon, 25 Oct 2010 14:20:31 +0000

Clearwire Corp and Sprint announced last week that they will launch 4G mobile Internet services in New York, Los Angeles and San Francisco later this year. Services will be launched by Clearwire under its “Clear” brand and by Sprint which owns a majority stake in Clearwire. In New York service also will be offered by Time Warner Cable and in San Francisco by Comcast.

Subscribers will be able to purchase a wide range of devices, including USB modems, Intel-embedded WiMAX laptops and netbooks, portable Wi-Fi/4G hotspots and other wireless devices, all aimed at making subscribers more mobile and efficient. Each company plans to offer dual-mode 3G/4G devices which will utilize Clearwire’s WiMAX network when in range and leverage Sprint’s 3G network where 4G service is not available. Comcast said that its4G service, branded XFINITY Internet 2go, is sold as part of a Fast Pack that bundles in-home wired Internet with the 4G wireless service.

In regard to launch dates, New York will get service November 1, Los Angeles on December 1 and San Francisco in late December. Clearwire also said it plans to launch 4G service in other major metropolitan areas such as Denver, Miami, Cincinnati and Cleveland before the end of 2010.

Clearwire’s 4G network is currently available in 56 markets across the United States including many smaller cities such as Boise, Idaho; Harrisburg, Reading, and York, Pa.; and Abilene, Corpus Christi, and Killeen/Temple, Texas.

For more, see Clearwire’s press room.

Clearwire Launches Pay-as-you-go WiMAX Service

Jesse Ward — Mon, 30 Aug 2010 20:10:50 +0000

Clearwire today unveiled Rover, a new pay-as-you-go mobile broadband service which utilizes the company’s WiMAX network. The service is targeted at tech-savvy Generation Y customers between the ages of 18-24, and is priced at $5/day, $20/week, or $50/month for unlimited usage.

To use the service the customer will need to purchase a Rover Stick, a $99.99 4G USB modem to use with his/her computer, or a RoverPuck, a $149.99 portable WiFi hotspot that lets the user share broadband access with up to eight devices.

Rover is available in Clearwire’s 49 WiMAX markets nationwide. Users will not be able to roam to 3G networks when traveling to other areas where the 4G service is unavailable.

Although the Rover service is not yet available to Clearwire’s wholesale partners such as Comcast, Sprint, Time Warner Cable and Bright House, the company is interested in expanding its availability.

“Simple, commitment-free wireless services are wildly popular with the Gen Y crowd, and Rover provides them with the first pay-as-you-go unlimited mobile internet offering at 4G speeds,” said Mike Sievert, chief commercial officer for Clearwire. “We’ve built Rover from the ground up with products, pricing and features designed specifically to serve a younger market who knows how you get connected is just as important as where. Expanding our offers to meet this underserved segment is an important new business opportunity for Clearwire as we continue to extend our leadership in mobile broadband.”

“The opportunity for pay-as-you-go mobile broadband should not be underestimated,” said Carrie MacGillvray, program manager and wireless analyst at IDC. “Prepaid – or pay-as-you-go – data provides an option for consumers to experiment with the power of mobile broadband without being saddled with a two-year commitment. A prepaid mobile broadband service can offer consumers the ability to access and share Internet service, at home or on the go, in an affordable way.”

For more, see this release.

Clearwire to Conduct LTE Trials

Jesse Ward — Thu, 05 Aug 2010 15:39:01 +0000

Clearwire, champion of WiMAX, announced yesterday that it plans to conduct trials of rival 4G technology LTE, including multiple coexistence scenarios between LTE and WiMAX radio technologies. Chief Executive Bill Morrow said in an interview that he will decide by year’s end on the direction it will take with its national network.

The trials will take place in Phoenix in the fall of this year and early next year, the company said in a news release. Clearwire plans to utilize equipment from Chinese vendor Huawei, and the base station platform from Samsung that it currently uses for its mobile WiMAX deployments. The trials will utilize Clearwire’s 2.5 GHz – 2.6 GHz spectrum band.

Clearwire is preparing for three test scenarios:

FDD LTE: Clearwire intends to conduct frequency division duplex (FDD) LTE tests using 40 MHz of spectrum, paired in 20 MHz contiguous channels, of its 2.5 GHz spectrum.
TDD LTE: Clearwire will concurrently test time division duplex (TDD) LTE, in a 20 MHz configuration, which is twice the channel size currently used in its 4G WiMAX deployments.
WiMAX and LTE: Clearwire also will test WiMAX co-existence with both FDD LTE and TDD LTE to confirm the flexibility of its network and spectrum strength to simultaneously support a wide-range of devices across its all-IP network.

Clearwire expects to confirm the capability to produce real-world download speeds that range from 20 Mbps -70 Mbps. In a thinly veiled dig at Verizon’s LTE network plans, the carrier said, “This is expected to be significantly faster than the 5-12 Mbps speeds currently envisioned by other LTE deployments in the U.S., which will rely on smaller pairs of 10 Mhz channels or less.”

In regards to devices, Clearwire plans to work with dual-mode 4G chip-maker Beceem and other partners to “determine the best methods for enabling end-user devices to take advantage of a potential multi-mode WiMAX/LTE network.”

Other participating vendors — and wireless operators — are expected to be announced at a later date.

In the past Clearwire stated that it would be open to (eventually) migrating from WiMAX to LTE, so the trials are not completely out of left field. However, Clearwire is the poster child for WiMAX technology in the U.S. If Clearwire jumps ship, could this spell doom and gloom for the WiMAX marketplace?

For more details on the trials, see Clearwire’s release.

Time Warner Cable Intros 3G/4G Mobile Hotspot

Jesse Ward — Mon, 12 Jul 2010 15:34:21 +0000

Following Sprint’s lead, last week Time Warner Cable (TWC) launched a personal hotspot device called Intelligo that enables any device with Wi-Fi connectivity — and up to five devices simultaneously — to connect to TWC’s 4G mobile network and a nationwide 3G network for Internet access on the go.

The Intelligo, built by Sierra Wireless, costs $49.99 after a $50 mail-in rebate and a two-year contract. Pricing for Time Warner Cable’s Road Runner Mobile service — advertised as providing up to 6 Megabits per second downstream — varies from region to region.

Through its investment in Clearwire, Time Warner’s Road Runner Mobile WiMax service is available in Dallas, San Antonio, and Austin, Texas; Charlotte, Raleigh and Greensboro, N.C.; Honolulu and Maui, Hawaii; and Kansas City, Mo. Customers also are able to access Clearwire’s WiMAX mobile service in Atlanta, Baltimore, Chicago, Houston, Las Vegas, Philadelphia and Seattle. Where WiMAX service is unavailable, TWC customers can roam on Sprint Nextel’s nationwide 3G network.

The Intelligo is identical to the Overdrive personal hotspot offered by Sprint. Back in January, Sprint was the first Clearwire partner to launch a mobile hotspot. Sprint sells the Overdrive for $100 with a $50 rebate and a two-year contract.

Sprint has billed its wireless hotspot as both a fixed and mobile service which can replace a customer’s wired broadband connection. “Through a single connection, you can bypass your cable provider and stream HD movies from content distribution providers (such as Netflix, Amazon and Blockbuster) right to your TV; connect your Xbox 360 and game real-time with someone located across the globe; move pictures wirelessly from your camera to a digital picture frame and surf the Web on your laptop while streaming Pandora,” the company said in a press release.

In related news, Clearwire announced it is making its Clear Spot 4G and Clear Spot 4G+ personal hotspots available nationwide, and is filling pre-orders of both devices. The Clear Spot 4G simultaneously connects up to eight WiFi devices. It will set you back $99.99, or you can lease the device for $4.99 per month. The Clear Spot 4G+ simultaneously connects up to five WiFi devices, and gives users the additional capability to roam on Sprint’s 3G network outside Clearwire’s coverage area. The Clear Spot 4G+ costs $224.99 or can be leased for $5.99 per month.

For more, see this Time Warner Cable release, Clearwire release and Sprint release.