November 9th, 2007
Can WiMAX be saved?
It costs money to build a nationwide network, even a citywide one. Without some assurance of a return, few people want to go up against the current shared monopoly and drive down prices.
That’s the clear message of the Clearwire-Sprint split on WiMAX and the possible failure of Silicon Valley’s WiFi project. (The image is from Vietnam, where mobile WiMAX was tested last month.)
Only one of these is an open spectrum story, of course. Sprint and Clearwire were both using licensed spectrum, slightly higher frequencies than WiFi uses.
The Sprint-Clearwire plan was to spend $5 billion building out a nationwide network of broadband data. Clearwire does serve markets in over a dozen states, claiming it’s making good money in 20 markets, and adds it has expanded its credit facility.
But the resignation of Sprint CEO Gary Forsee in October caused that company to re-think merger plans, meaning its frequencies won’t be built-out any time soon. Clearwire shares tanked on the news.
Susan Crawford believes Google might sweep in and work with Sprint on WiMAX, but service would still cost $50/month.
WiMAX advocates, like Intel, should take a clue from all this.
Closed spectrum will never give you the growth of open spectrum. Auctioned spectrum gives companies a monopoly for use of that spectrum, hence a high rent is needed, and this eventually frustrates most attempts to put the spectrum to use.
With WiFi it’s client gear which defines the market. More clients mean a greater incentive to put up hotspots, which are also cheap. Free (for the price of a cup of coffee) Internet broadband is thus available for laptop users in most major cities. The shops’ own wired broadband defines the network.
But true, citywide wireless competition requires more. It requires more than the benefits Moore’s Law can provide.
The answer, sad to say, lies in politics. Intel, Google, and all the other firms which have made money in WiFi, but no money in WiMAX, need to get together and demand more open spectrum, spectrum defined by hardware, client hardware.
That means a big fight, in Washington, where the Bell monopolists are strongest. But there are tens-of-millions of captive Internet customers who are ready to be energized in that fight, if someone will just lead us.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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