McCaw Gets Back Into Wireless
By Carlo Longino, Wed Jun 02 15:30:00 GMT 2004

American wireless pioneer Craig McCaw is moving back into the space through a fixed broadband provider, but does his name assure success?

McCaw formed the first nationwide cellular carrier in the US, then sold it to AT&T in the mid-'90s for $11.5 billion. His success in that venture and his role at Nextel have made him something of the wireless golden boy, and now, since he's entering the wireless broadband market, of course it's going to be a success.

The new venture, Clearwire, will launch its service in two small US cities -- Jacksonville, Florida, and St. Cloud, Minnesota -- and says it will expand to 20 markets by the end of the year. It will run an OFDM-based network using equipment from another McCaw company, NextNet, and could use XO Communications, another company McCaw founded, for backhaul and future telephone connectivity.

While a lot of noise is being made in the press about McCaw's entry into the broadband wireless space, there's nothing about Clearwire that makes it stand out from other upstarts in the field, and certainly brings to mind Monet Networks, the CDMA2000 1x EV-DO provider that shut down earlier this year.

Like Monet, Clearwire is targeting second-tier cities (though that may be generous to St. Cloud) for its initial plans. Monet launched in the upper midwest US and attracted just 3,000 subscribers for its data-only mobile service that delivered speeds of 300 to 700 kbps. Clearwire says it will deliver 1.5-2 Mbps, and that its equipment is "portable" -- a term that makes it sound much better than it really is.

Clearwire's intended as a consumer replacement or competition for DSL and cable modem services. It's portable in the same way a desktop PC is portable -- sure, you can move it around, but it's too big to be easily carried from place to place and has to be powered by an AC adapter. No doubt about it, this is fixed broadband -- no matter how hard Clearwire tries to package it as a mobile, err, portable, service, saying it's going to launch in Canada and Mexico and are buying up spectrum in Europe. If it could shrink the modems down to a reasonable size, like a PCMCIA card, and eliminate the need for a separate power source, it might find more success -- though again, this didn't help Monet.

The new company hasn't announced pricing or service plans yet, though it's doubtful they'll be any lower than the $40 to $50 per month most broadband providers charge. Clearwire also makes a big deal out of the fact that its equipment doesn't require a truck roll and can easily be set up by a consumer, but this is now often the case with cable modem and DSL service as well.

Given that something like 90 percent of US homes have cable TV and even more have telephones, and Wi-Fi offering more utility around the house than this "portable" solution, it's hard to see Clearwire offering much competition when it doesn't offer higher speeds and isn't likely to undercut existing pricing. So where are the benefits for consumers to get yet another bill from yet another company, Craig McCaw or not?