August 3rd, 2009
Why Clear is toast
Clear, the WiMax project backed by cable operators, Sprint, and Google, has hit Atlanta with plans to hit more cities.
It’s doomed.
It’s doomed because of bundling and long-term contracts, policies our politicians and regulators have been enabling so long most people can’t imagine business being done any other way.
I would love to try out Clear. I have an extension being built on my home. With Clear I wouldn’t have to run wires to connect it with my existing LAN. I would love to get true broadband from any office I visit.
Imaging combining what is now your wired and wireless Internet access into one fixed monthly charge. Almost makes me want to download a movie.
But it’s not happening. My old cellphone broke a few months ago. It’s the main line for the house, so my dear wife insisted we get a new wireless contract. Now I’m obligated for two years.
The same problem occurs with the wired connection. My Internet access is bundled along with my television bill. (There are too many trees here to reach the satellite.) The savings just aren’t there.
My guess is much of the market, perhaps most of the Atlanta market Clear is trying to reach, is in the same straits. Long-term contracts, bundling of equipment and service, and monopolies all conspire to make switching carriers tough.
Then there’s the cost. WiMax does not necessarily need licensed frequencies. But it was the only way Intel could get spectrum for its technology. The costs of securing that frequency are bundled into every Clear bill. It makes the price much higher than it should be.
That’s why Clear required so many partnerships, carefully negotiated over many years, to get going. The current list includes Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks.
By selling our electromagnetic frequency for cash, nearly all of it to the same small number of companies, the government and those companies conspired to make it impossible for new technologies to emerge, for true competition to commence.
Clear is a great example of that. It took a decade to reach the market, and it’s going to fail.
Because government and monopolists were in bed with one another, Moore’s Law was frustrated. Watch and see.
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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| 08/03/09
