Workshop Report: Clearwire on track with rollouts and app tools, but MSO partners struggle with Business Models

Author's Disclaimer: Unlike many "would be journalists" that are either always negative on WiMAX, or are "perennial pollyannas" that produce an endless stream of recycled "happy talk," this author tries to be balanced and objective of WiMAX in general and the WiMAX events covered in particular. This author been covering WiMAX for over 6 years now, with more than 200 published articles on that technology.  I report what I hear and see on view graphs presented and/or video clips.  This author has no business relationships with Clearwire or any other WiMAX related company or entity. Please read on……

Introduction

Clearwire briefed potential application developers at a well attended CLEAR Developer workshop in Santa Clara, CA on March 2, 2010. The key sessions were Upcoming 4G WiMAX APIs and Tools, The 4G WiMAX Business Opportunity for Developers, and the wrap up session revealing where Clearwire is now and where they're going. You can find all the Sessions and speakers here.

We will skip the discussion of WiMAX APIs and Tools, which was already covered in detail at the Feb 10th IEEE ComSoc SCV meeting (you can access the slides at: http://www.ewh.ieee.org/r6/scv/comsoc/Talk_021010_CLEARDeveloperOverview.pdf).

Nonetheless, we noticed a lot of keen interest amongst developers who were accessing Clearwire's Silicon Valley 4G Innovation Network using 4G USB sticks (AKA dongles) attached to their notebook PCs. It seems indoor coverage worked fine in the Santa Clara Convention Center, where the workshop was held.

However, we were quite disappointed that neither Comcast or Time Warner Cable had any new services (other than high speed Internet) to tell us about.  This despite the video content owned by Comcast and the managed networks that MSOs own (which could be used for transport and delivery of premium services).  More about this later in the article.

The Wholesale Opportunity

Clearwire (CLRW) was said to own more licensed spectrum in major cities than any other wireless network operator. Their "4G" network, known as CLEAR, is now covering more than 34 million points of presence (POPs) as of 4Q-2009.1 It is also commercially available in 27 different U.S. cities including Seattle, Honolulu and Maui. CLRW plans to build out their mobile WiMAX network to reach 120 million POPs by the end of 2010. They will have launched CLEAR service in most major U.S. cities by the end of the year including New York, San Francisco, Boston, Houston, Kansas City and Washington, DC. By this time next year, the CLEAR network will stretch from coast to coast and cover all the major U.S. cities.

In addition to selling "4G" fixed and mobile wireless broadband Internet access, Clearwire has MVNO (wholesale) agreeements with three of their large investors –Sprint, Comcast, Time Warner Cable– who are reselling the service under their respective brand names. These partners were said to have a combined customer base of approximately 100M subscribers and their well known brand names would help the combined entities achieve a critical mass of customers much quicker than if only Clearwire was selling WiMAX services.2 Wholesale resellers will also drive WiMAX ecosystem development and investment, according to Randy Dunbar, Vice President, Wholesale Marketing & Strategy, Clearwire.

Mr. Dunbar told the audience that Clearwire has recently seen a lot of interest from potential MVNO resellers. These MVNOs may include companies involved in: consumer electronics, retailers, CLECs, pre-paid/targeted market segments, smart grid and Machine to Machine (least understood by Clearwire, but with tremendous potential). The new resellers will help Mobile WiMAX deployment in diverse market segments such as: mobile consumer, home entertainment, power Internet user, SOHO, small business, large enterprise, vertical business', road warriors (i.e. business travelers).

Currently, there is only one known hand held device available for CLEAR -the Samsung Mondi. "4G" access is currently obtained using an external USB modem or "dongle," embedded WiMAX in a PC, or a "personal" WiFi hotspot (many of which require an external USB dongle to access the WiMAX network). But Mr. Dunbar said that a "range of connected devices" are coming for CLEAR. These devices include: smart phones, STBs, DVR, mobile modems, MIDs (Mobile Internet Devices), Consumer Electronics gadgets (such as portable media players). Randy hit my hot button when he stated that programmed video and time/place shifted video would be delivered via the 4G CLEAR network (see next section of this article).

Two Cable (MSO) MVNOs reselling Clearwire's mobile WiMAX network

Comcast, the largest MSO in the U.S., resells the CLEAR network as "Hi-Speed 2go." It's branded mobile WiMAX service is available in Portland, Atlanta, Chicago, Philadelphia, Seattle/Bellingham area. Katie Graham, Director, Wireless Business Development said there were two ways mobile WiMAX could be purchased from Comcast:3

  • "Fast Pack": Cable Internet (home access) bundled with High-Speed 2go
  • "Bolt on": High-Speed 2go for existing High-Speed Internet customers.

A free WiFi router is included in Hi Speed 2 Go offers. More details on the Comcast mobile WiMAX service is at:

http://www.comcast.com/highspeed2Go/#/highspeed2go

http://www.takefastwithyou.com/

Time Warner Cable has been completely spun off from Time Warner as a separate company (which means they don't own any studio, cable or broadcast network content). Their CEO had recently stated that high speed Internet was replacing video as the firm's core product. Time Warner Cable currently serves 14.6M customers in 28 states. They claim to be the third largest broadband ISP in the U.S. with 9M subscribers. Brian Coughlin, Manager, Wireless Platforms for Time Warner Cable, told the audience that data oriented wireless products and services would be first priority for the company, with voice and mobile phones later. Brian stated that, "Digtial media and service must be adaptable" and that an ecosystem would be required for this. I took this to mean that digital media and video services needed to be able to adapt to broadband access via mobile WiMAX, but I was wrong (see below for the reason).

This author asked the two MSO panelists why premium video services or VoD have not been offered over mobile WiMAX.  The moderator, Randy Dunbar of Clearwire, stated that was an excellent question and that he believed, "The technology is ahead of the business models." . Some of the explanations given by the panelists were:

  • "We (the industry) haven't figured out how to monetize the video applications." -Randy Dunbar of Clearwire and Brian Coughlin of Time Warner Cable
  • "It's definitely on our radar screen, but we don't have anything we can announce at this time." -TW Cable
  • "Digital content rights are based on a given device, not on a service." -Katie Graham of Comcast

This author was quite perplexed by these justifications for not deploying premium (non-Internet) video over Mobile WiMAX. In particular, it was not clear why Comcast can offer On Demand Digital Video* over their managed network and cable modem based broadband Internet service, but not over mobile WiMAX.  Why not make On Demand On Line available to "Bolt on" mobile WiMAX subscribers who don't have Comcast Cable Internet at home?  If content rights management is the issue, why can't Comcast register each netbook/notebook PC or mobile WiMAX device that will access the video service?

* Comcast On Demand On line service is now called Fancast XFINITY TV.  It requires both Comcast Digital Cable TV and High Speed (Cable modem based)  Internet service.  A Comcast email address is required for access authentication. 

For more details, please visit:  http://www.comcast.net/on-demand-online/

Kittar Nagesh, Service Provider Marketing Manager at Cisco also participated in this panel, which was somewhat of a misnomer "The 4G WiMAX Business Opportunity for Developers."  Mr. Nagesh made three statements I thought were quite important:

  • "Video will be 66% of mobile video traffic by 2013."
  • "The spectrum Clearwire owns is remarkably important. It's important to make use of the spectrum (a wireless network operator) you have. It doesn't matter if it's used for WiMAX or LTE."
  • "Machine to Machine applications will be phenomenally important. It will be an inflection point (for the broadband wireless industry). Innovation will explode in an unbounded fashion."

Shortly after this event, Cisco withdrew from the WiMAX RAN (Radio Access Network) equipment market. They had been selling WiMAX base stations (from the Navini acquisitiion), but they now think there are better opportunities in the mobile packet core via their acquisition of Starent Networks).

Wrap Up Session: Clearwire now and in the near future

Dow Draper, Clearwire Vice President for Product Development and Innovation, told the audience that the average Clearwire customer is using 7G bytes of downloaded data per month — a number that Clearwire only expects to increase over time. That compares with an average 3G data card download of 1.4G bytes/month and an iPhone 3G average download of 200 M bytes/month.

Mr. Draper also said that the S.F. Bay Area can expect commercial WiMAX service by "late 2010," and that "multiple smart phones" would be running on the Clearwire network before year’s end. Dow also hinted at other upcoming devices for CLEAR: MIDs, Portable Media Players (PMPs), tablets and embedded devices. He distinguished between category 1 devices which are tested and sold by Clearwire and category 2 devices which are sold through channels (and presumably retail stores).

"Clearwire will support multiple Operating Systems, especially Android," said Mr. Draper. In summing up he said that thrid party developers, differentiated devices, services, and applications are all critical in attracting customers for Clearwire and their MVNO resellers. While we completely agree with that statement, we think that the devices need to come to market very quickly (they have been promised for quite some time by Intel but haven't materialized). But even more important are the differentiated services, such as video- either for entertainment, education, or surveillance.

Next Clearwire workshop:

4-G WiMAX Developers Symposium, Jun 15 10:00AM to 5:00PM Stanford University

Topics Include:

  • The latest on 4G WiMAX API's and tools
  • 4G WiMAX 101 basics for developers & network and device architects
  • Market opportunities for 4G developers with symposium sponsors: Clear, Time Warner Cable, Sprint, Intel, Comcast, Cisco
  • Business sessions from leading 4G industry executives
  • 4G trends and forecasts
  • Open discussion on the future of mobile internet innovation

Details at: http://scpd.stanford.edu/search/publicCourseSearchDetails.do?method=load&courseId=6650469

  1.  IEEE 802.16e-2005 based Mobile WiMAX (being deployed by Clearwire and partners) is actually 3G according to the ITU-R;   IEEE 802.16m will be the 4G version of mobile WiMAX, but Clearwire has not committed to that yet. (return to article)
  2. Note, Viodi editorial staff was only able to verify 85M subscribers between the three entities of Sprint, Comcast and Time-Warner.  A Clearwire representative told us that the >100M comes from aggregating the subscribers listed in each of the MSO’s and Sprint’s financial reports. It also includes retail and wholesale subscribers for Sprint." (return to article)
  3. Note, there are two versions of the service that Comcast offers, a "Metro" tier which is "4G" mobile WiMAX only and a "Nationwide" tier which provides roaming using both 3G/4G (using Sprint's EVDO network for 3G). (return to article)

15 thoughts on “Workshop Report: Clearwire on track with rollouts and app tools, but MSO partners struggle with Business Models

  1. Very comprehensive article, Alan, as usual.  The comment you make about retail is interesting, especially in the light of Walmart's recent purchase of VuDu.  Although probably unlikely, it wouldn't be a total surprise for a Walmart or some other brand to do something with WiMAX.  

    Check out this article from awhile back for more detail on what I am thinking:

    http://www.viodi.com/newsletter/050201/article2.htm

  2.  

    I have long known about Fancast in the abstract .  Surprisingly, as a Comcast customer, I never had a compelling reason to give it a try until yesterday for the purposes of this article.  I guess that's why they are rebranding to Xfinity.

    This would seem to be the solution for Comcast's provision of video service over WiMAX.  In fact, I would imagine that the the "Connection Manager" that Katie Graham refers to in her presentation could be designed such that it would automatically authenticate the Comcast viewer to allow him to watch Fancast content every time he logged onto the network (I would think it would also be smart enough to rate adapt, based on the network).    

    Maybe it would do one better and have a little video window or button that could be clicked and the Fancast guide and/or videos would automatically start playing without the subscriber having to open a browser.  It will really start to get interesting if Fancast starts to enable IP devices that connect to the TV to display its content. 

    Right now, there isn't much of a compelling reason to go to Fancast.  I have to remember my Comcast ID and password, which half the time I can't and I have to have Fancast at the top of mind (which it generally isn't). 

    In my opinion, this makes Fancast currently on somewhat equal to lower footing than Hulu, but, if Hulu goes subscription and Fancast continues to get more content, particularly content to which a subscriber already has rights (e.g HBO On Demand), then I could see where Fancast could be perceived as a better value for those who are not cordcutters (it really becomes another feature to make the cable service stickier).  

    Adding in mobility and high speed Internet via WiMAX to Fancast is a feature that competes with DishTV's Sling feature.  The beauty of the Comcast/Fancast approach is that, unlike Sling, they don't need a device in the home to unicast it through their last mile cable network.  They just have to pull it from the cloud based on authentication.
  3. I have a couple of other questions that are probably just fodder for speculation at this point:

    – Will Comcast ever offer Fancast to people who don't subscribe to Comcast's cable or broadband services, say on a stand-alone basis or outside their footprint?  

    – Could a VoIP client be in development that would allow a Comcast voice customer to extend their landline Comcast landline phone over WiMAX at no extra cost?  That starts to become an interesting consumer value proposition.    

    Also, it is interesting, but I supposed expected,  to see where the current WiMAX coverage area is for developers here in Silicon Valley (slide 25 of the Clearwire presentation –

     http://www.ewh.ieee.org/r6/scv/comsoc/Talk_021010_CLEARDeveloperOverview.pdf

    The currents spots seem to be centered around Intel, Google and Facebook with Cupertino (Apple) in a future innovation coverage.  

  4. For the record, I've had only one phone conversation (Dec 1, 2009) with a Comcast rep regarding their plans for mobile WiMAX, but have never received any information (i.e. email or verbal)  from anyone at the company elaborating on their Hi Speed 2 Go program.   There were no replies to several emails sent thereafter, requesting clarification or comments, e.g. on what other analysts had written.
    Prior to the Dec 1, 2009 conversation, the following articles about mobile WiMAX in the U.S. were published that might be related to Comcast's mobile WiMAX plans:

    Assessment of Mobile WiMAX in the U.S.  (Comcast is not mentioned)

    http://viodi.com/2009/12/01/assessment-of-mobile-wimax-in-the-u-s/
     
    -Comcast to roll out WiMAX service

     
    http://www.wimax360.com/profiles/blogs/comcast-to-roll-out-wimax
     
     
    -Femtocellls
    http://www.wimax360.com/profiles/blogs/comcast-trialing-femtocells
     
    -Potential of Premium video content over WiMAX, e.g. Comcast on demand on line 
    http://www.wimax360.com/profiles/blogs/highlights-of-clearwires
     

  5. Comcast's "Bolt on": High-Speed 2go for existing High-Speed Internet customers.

    I was unable to find the moniker "Bolt On" in any Comcast literature or web site.  More importantly, it's not apparent what "existing High-Speed Internet customers" means.  For example, if someone is NOT an existing Comcast high speed Internet customer (e.g. they have dial up or DSL Internet at home or no home Internet at all), can they buy Hi Speed 2 Go? 
    Will Comcast sell a  Nationwide 3G/4G Hi Speed 2 Go plan to a road warrior who is not domiciled in a city or geographical area that Comcast branded 4G Mobile WiMAX is available in?  For example, a business executive living in Silicon Valley (no 4G WiMAX available) who travels extensively to areas in the U.S. where Comcast offers 4G Mobile WIMax service.
    We were hoping to have either an email dialog or at least one phone conversation to clarify these (and other issues), but unfortunately Comcast's WiMAX team chose not to reply to my email requests.

  6. ADVANTAGE:  Clearwire

    Comment submitted anonymously to the IEEE ComSocSCV Discussion list (IEEE members- sign up instructions at http://www.comsocscv.org):
    The reality is that Clearwire is a tour de force with respect to wireless communication – it achieves five nines availability. It makes wireless communication appear to be a wire-line fat dumb pipe.  Furthermore it preserves the illusion through orders of magnitude growth. The illusion is created by adapting in real time to changing circumstances; the Clearwire network is definitely smart.
    The market advantage of five nines availability is that Clearwire, unlike most mobile communications, can be used for the most sensitive messages, including government, hospitals, banking, …, etc.  Clearwire is a premium service which will command, in time, a premium price.  Clearwire VOIP  will be better than normal cellular service, provided one remains within the service area.
     
    The QOS advantage of Clearwire over basic cellular service is partly dependent upon local weather. Central and southern California may not be Clearwire's best business opportunity.
     
    The advantage of a fat dumb pipe is that it doesn't care whether the application is mobile to mobile, or consumer. Both will be found on Clearwire.  But, in order to preserve the bandwidth and QOS advantages, Clearwire will, in time, need to raise prices in order to reduce demand.  At that point, Clearwire will become the preferred network for advertisers to reach the most prosperous consumers.
     
    The term "road warriors" is overly broad.  It includes, soccer moms, marching band moms, doctors, psychologists, and a whole host of people who are mobile, but not roadies or warriors in any real sense.  A more nuanced market
    segmentation scheme would be helpful.
     
    Anonymous
     
    AW Comment:  I believe the commenter is referring to 5 nine's availability  and huge capacity of Clearwire's backhaul network (a bottleneck for most cellular carriers).  
     
    I don't believe QoS or even bandwidth is effected much by local weather.  Rather, I believe that received signal strength and other RF parameters vary widely within a cell or sector and are diminished towards as a subscriber moves toward the outer perimeter of the cell/sector or is indoors behind steel walls/ concrete.  That's why I believe the RF awareness capability will be so valuable for app developers- they can adjust the video or graphics quality to match existing RF parameters sensed by the receiver PHY layer.

  7. Will "4G" Mobile WiMAX be able to handle OTT Video?
    Based on this article, it's not likely there will be any premium video services delivered over mobile WiMAX anytime soon.  What about OTT (Internet) video?
    In a new report titled,  OTT Video: Service Providers Face a Gathering Storm,  Heavy reading states,
    "Service providers can leverage to manage this phenomenon – such as DPI (Deep Packet Inspection), policy, and local caching – and weighs the viability of some potential revenue-generating options for service providers. It also explores what other members of the value chain – including content owners, P2P enablers, and CDNs – are doing to reduce the network impact of online video."
    As AW correctly points out in his comment response above, the RF characteristics (signal strength, signal to noise ratio, etc) will varify depending on the user's location within a cell/sector.  But it will also varify widely while the user is in motion, e.g. in a train, bus or other vehicle.  Hence the OTT video frame rate, pixel size, and other video parameters must change accordingly to prevent video freezes, distorted video, and loss of lip synch.  Have the Mobile WiMAX service providers figured out how to do that?  If not, they won't be able to deliver a good quality video experience over their fat (but dumb) pipe.
    Heavy Reading:  "However, this (OTT) video content does travel over their networks, and its high-bandwidth, low-latency requirements, coupled with widespread usage, are causing significant problems for service providers. Broadband pipes are getting clogged, and service providers are having to develop new ways to manage the challenges posed by broadband video traffic.

    This problem is not going to go away: Even as service providers struggle to manage video traffic on their networks today, it is projected to increase exponentially over the next five years. Network operators will have to identify ways to either manage this traffic, or monetize it so that they can pay for continual network upgrades."
    Will Clearwire, Sprint, TW Cable, or Comcast be able to manage all the network traffic to prioritize OTT video over email and casual web surfing which don't require low latency and jitter controls?  We think Clearwire will have to take the lead on that, because the other WiMAX providers listed are reselling the CLEAR network.    And when will there be video players optimized for mobile WiMAX from Microsoft, Adobe, Real Networks, Apple, etc?

     

  8. The 4G WiMAX Business Opportunity for Developers?
    This article doesn't state what actual business opporunities for developers were discussed or identified during the panel session where Clearwire, Comcast, TW Cable and Cisco partipated.  If there are no services other than best effort Internet, what are the business opportunities for application developers?
    Further, it doesn't seem like Clear or its three resellers/MVNOs (Sprint, Comcast, TW Cable) will financially benefit from Internet video or Location Identification (which Clearwire plans to make available for free).  Are they all facing disintermediation?
    There don't seem to be any revenue sharing business models (e.g. for eReader downloads, mobile banking, premium video, mobile advertising, etc) for any of these mobile WiMAX operators to make any additional revenue.  Even worse, if they subsidize WiMAX embedded netbooks or devices how will they get any ROI from offering only a monthly uncapped data subscription plan?
    Finally, the M2M apps (other than video surveillance) probably could get by with 2G and certainly don't need 6 or 7M bits/sec downstream and 1M bit/sec upstream.  So they are not likely to be a big revenue generator for WiMAX operators.  Then, what's left?

  9. Jack, that was a great comment!
    I will leave it up to Clearwire and their three MVNO partners (only Comcast and TW Cable participated in the referenced panel session) to describe the actual business opporunities for developers, which as you astutely point out, were not disclosed during this panel session.  Only (best effort) Internet access was talked about in the context of the cities and speeds that TW Cable and Comcast are now offering as CLEAR MVNOs. 

    Personally, I think  video surveillance, the topic of our ComSocSCV April meeting, will be a big beneficiary of mobile WiMAX if the operators properly promote it.  But that application was not discussed during this workshop.

    Alan Weissberger
    http://www.comsocscv.org

  10. Interesting that none of the CLEAR WiMAX service providers cared to comment on the commnets or the points made in this article.

  11. It appears that only Clearwire is trying to encourage app developers with tool kits.  Comcast, TW Cable, Sprint are just reselling the service providing ZERO value added.

  12. Apparently, there is no business model for either OTTP or Premium Video services over Mobile WiMAX.  If not, what is it good for?  Faster web surfing or email checking will not be sufficient for users to justify $60 per month when they can get free WiFi access at so many locations.

  13. CNET Report: T-Mobile in talks with Clearwire, cable
    T-Mobile USA's CEO said the company is in talks with Clearwire and cable companies about a possible joint venture, Reuters reported Thursday.
    Speaking at an investor conference in Germany, Robert Dotson, T-Mobile USA's CEO said that the wireless carrier was looking into creating a joint venture with Clearwire, which is building a nationwide 4G network and cable companies, to improve its wireless spectrum opportunities.
    "We continue to look at JV opportunities for additional spectrum…there are a number of different options we look at, (we) have been talking with cable companies, with Clearwire," the news service quoted him as saying. 
    Sprint, Comcast, and Time Warner Cable are already reselling the Clearwire service. Perhaps, T-Mobile is looking to get in on the action as well. The cable operators also have spectrum licenses that they bought in the AWS auction. Cox Communications is the only cable operator that has done anything with this spectrum. But it's unlikely that any of the cable companies would build a nationwide network, so teaming with a nationwide carrier makes sense. T-Mobile could also be looking at ways to partner with the cable operators to get access to that spectrum as well.
    More at:
    http://news.cnet.com/8301-30686_3-20000749-266.html
     
     

  14. Sprint to promote video calling with '4G' phone

    For the moment, Clear is ahead of the competition on wireless data speeds. However, because the network hasn't been accessible from phones and has limited coverage, it hasn't stopped Sprint from losing subscribers. And even if phones could now access Clear, common tasks such as e-mail and Web browsing wouldn't run much faster than on a 3G phone. That's why Sprint is promoting it as a medium for video calling.

    "We really wanted people to be able to experience what 4G can do for them," said David Owens, Sprint's director of product marketing.

    Sprint doesn't have a video chat application for the Evo yet, but will help developers create such software, Owens said.

    Owens said Sprint doesn't plan to limit sales of the Evo phone to markets with Clear coverage, because it will work on Sprint's regular 3G network as well.

    http://www.seattlepi.com/business/1700ap_us_tec_sprint_4g_phone.html

    Comment: We think if Sprint can encourage and instigate a "4G" Video Chat Application for this phone it would be terrific. However, we think that RF Awareness and QoS will be needed over the WiMAX network. Will Clearwire make these two capabilities available to developers this year?

  15. Clearwire apparently moving to LTE-TDD in the U.S. 
     
    Clearwire Paves Way for LTE in US
    Clearwire LLC (Nasdaq: CLWR) is part of a group of operators and vendors that has asked the 3rd Generation Partnership Project (3GPP) standards body to start work on specs that would allow TD-LTE to be deployed in the US in the 2.6GHz spectrum — which is now used for WiMax — in a move that further exposes the operator's interest in the competing proto-4G standard.
    http://www.lightreading.com/document.asp?doc_id=189890&f_src=lightreading_gnews
    This probably means we can kiss WiMAX 2.0 (IEEE 802.16m) goodbye

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