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)

WiMAX Handsets for CLEAR vs Mobile Skype over VZW 3G network

From robust and reliable backhaul, to applications tools for developers, to femtocells,  Clearwire speakers covered a lot of ground at the Feb 10th IEEE ComSocSCV meeting in Santa Clara, CA.  For backgrounder and slides:

http://www.ewh.ieee.org/r6/scv/comsoc/ComSoc_2010_Presentations.php

comms tower

Creative Commons License photo credit: conskeptical

Whither WiMAX Handsets?

For sometime, I've wondered if mobile WiMAX could succeed without any handsets (especially smart phones).  I thought mobile VoIP would be the way to go, because there would be an opportunity to combine voice with various Internet applications and that voice calls would essentially be free as they'd be overlayed over the broadband data network.   However, it does not seem to be happening at all.  This despite one of our esteemed ComSoc Discussion Group members who wrote in a blog post earlier this year, "Mobile VoIP and mobile video are the 2 killer apps for mobile broadband in 2010. Both of these will drive the adoption of technologies like Mobile WiMAX in a way unseen like before."

We don't agree with this assessment and here's our analysis:

During our February 10th ComSocSCV meeting, Simon Ma asked the Clearwire speakers a very relevent question,  "When you do release your WiMAX phone (later this year), will it use mobile VoIP or cellular voice."  Clearwire's Allen Flanagan understandingly refused to answer that question, because the CLEAR handset has not been officially announced nor has the vendor been publically disclosed.  

That got me thinking.  Three of the four CLEAR network operators- Clearwire, Comcast, TW Cable-don't own a cellular network.  So, to make any money from a voice service they would need to either use mobile VoIP or have an MVNO arrangement with another carrier.  But there are evidently technical problems with mobile VoIP (do you know of any carrier that has a mobile VoIP service with paying customers?).  More importantly, the CLEAR footprint is insufficient for good mobile VoIP coverage and that will be true till at least 2011 when they complete most of their WiMAX buildouts.  And then there's the prickly issue of mobile VoIP/WiMAX roaming and handoff with cellular carriers.  Is QoS inherent in the IEEE 802.16e-2005 standard, the answer?

We were surprised to learn that Clearwire has implemented QoS in their current network.  Clearwire David Rees said,   "Clearwire RAN vendors have implemented IEEE 802.16 specification for QoS and Clearwire is currently exercising QoS for fixed and mobile VoIP."  But Clearwire is negotiating QoS with the FCC (part of the FCC’s Open Internet NPRM) and has yet to finalize a policy for offering QoS to application developers.  They are targeting an early 2011 launch for that.  So if mobile VoIP apps were to be offered on handsets before then, they could not use QoS.

Our first conclusion is that mobile VoIP will NOT happen over WiMAX anytime soon, if ever.  Yet Clearwire and Sprint still plan to sell WiMAX enabled phones this year.  Cleawire CEO Bill Morrow recently told the Financial Times that the company's ability to deliver high-speed mobile data to customers will remain its primary competitive advantage, he also acknowledged the company would need to offer traditional voice services to compete with rivals.  "Voice is still very important . . . we will be in the smartphone business and will launch devices this year," he said.  Morrow noted that there is "a natural affinity" between Google's Android operating system and Clearwire's all IP-based network. 

Read more at:  http://www.ft.com/cms/s/0/21bc7d5c-00ad-11df-ae8d-00144feabdc0.html?nclick_check=1

So that leaves GSM vs CDMA for voice.  Let us examine that issue.  It's been rumored that T-Mobile might be an MVNO for CLEAR, in which case Clearwire could be an MVNO for T-Mobile's GSM based cellular voice service.  But that seems unlikely.  So our second conclusion is that the pre-announced Sprint and Clearwire WiMAX phones will use CDMA for voice.  That implies that Clearwire will need to be an MVNO for Sprint's CDMA network. Yeah- reciprocal/ bilateral MVNO agreements between the two companies!

Is a multi-mode phone the answer- one that can work on any network.  We don;t think so.  Can you imagine the power consumption (high) and battery life (short) of a quad mode phone with WiMAX for data/video only, WiFi, CDMA and GSM?  And how expensive would such an unsubsidized phone be?

Will there be a significant global market for a WiMAX phone that uses WiMAX for Internet access and CDMA for voice?  For sure, the CDMA market is much smaller than the GSM market.  And there's no new investment in CDMA infrastructure- its days are surely limited.  But Sprint only has CDMA.

All of this has most likely been recognized by the device makers.  It is probably why you haven't heard announcements from Nokia, Apple, RIM, Palm, Motorola and other smart phone players about making a WIMAX enabled phone.  We think the only prominent WiMAX phone makers will be HTC (that already makes a WiMAX phone for Yota in Russia) and Samsung (that is heavily committed to WiMAX infrastructure equipment and is a leading cell phone maker).

Free Voice over 3G Networks?

And there will be much cheaper methods of making calls on mobile data networks available very soon.  On a February 16th conference call, Verizon Wireless (VZW) and Skype announced an agreement whereby any smart phone on the VZW (EVDO based) data network can download an "always- ON" free application, that will make it possible to initiate and receive Skype calls without consuming any voice minutes.  The hand held devices (i.e. smart phones) that can run this new app will include VZW's band of Research In Motion Ltd. devices as well as its trio of Google Inc. Android-powered devices, including the Motorola Inc. Droid, HTC Corp. Eris and soon to launch Moto Devour.  Skype and Verizon Wireless said the new application was specifically tailored to maximize battery life on a mobile device, despite its always-ON nature. The app will integrate with the smart phone's address book and allow for Skype's presence capabilities.  The smart phone address book would be much richer and deeper when integrated with this mobile Skype capability.  This is because presence status would be available to all callers who would not be tethered to their PCs anymore.  

There were said to be 580M Skype users and 90M VZW customers who could take advantage of this new "mobile Skype" app for smart phones, which is scheduled for late March 2010.   While many think of Skype and VoIP as being synonymous, the aforementioned mobile Skype capability was said to use VZW's circuit switched data network (EVDO) and not VoIP to deliver the Skype calls.  The call quality was said to be "terrific.  All a VZW customer needs is a smart phone and a data plan.

For a very long time, this author has said that mobile WiMAX's main competitor was 3G and not LTE.  With so many iPhone and Android apps, 3G has gotten a lot more attractive.  With essentially free Skype calls over the VZW data network, 3G is even more compelling.

Mobile WiMax vs 3G? (Drum roll) The winner is……………………………………………………………………..

We'll leave it to the reader to answer that question.

Note: This author welcomes any comment, critique or challenge to this analysis.

Clearwire to disclose Developer Opportunities with CLEAR WiMAX 4G

IEEE ComSoc SCV is very fortunate to have two influential Clearwire professionals speak at our Feb 10th IEEE ComSoc-SCV meeting in Santa Clara (logistics and other details at www.comsocscv.org).  The topic is: Developer Opportunities with CLEAR WiMAX 4G

Abstract:

Mobile WiMAX as provided by Clearwire (the CLEAR network) is also available from Sprint, Comcast, and Time Warner, under a reseller/ MVNO agreement in the United States. These “4G” wireless networks represent an opportunity for a new generation of products and services that take full advantage of mobile broadband capabilities.  Ckearwure understands that the true value of 4G WiMAX will be realized through new products and services, and with this in mind is focused on enabling 3rd party applications, services and devices for the CLEAR network.

At what promises to be a very informative meeting, Clearwire's David Rees and Allen Flanagan will provide an overview of the CLEAR network, nation-wide rollout, and device plans. They will provide details on CLEAR’s Innovation Network program and how Silicon Valley developers can get discounted aircards and free 4G network access through 2010 to develop and test their 4G ideas.

Dave and Allen will also walk through the available and planned platform and device services that CLEAR will be providing including location, network session information, connection management, activation, and provisioning. Some of the use cases of these services will be described, including proactive video optimization and location-enabled services.

A lively panel session will follow these presentations. The speakers and moderator will address the role of the application developer in making mobile WiMAX and CLEAR successful. Clearwire's future plans for enabling 3rd party applications and devices will be discussed along with competition from 3G and 3.5G networks. Looking further out, we'll get Clearwire's views on IEEE 802.16m (WiMAX 2.0) vs. LTE.

 
Bio's:

David Rees drives CLEAR’s ecosystem enablement efforts, working with partners and developers to help them realize the potential of WiMAX in their products and services. The ecosystem enablement team is working to support developers through network services, platform APIs, reference implementations, workshops, and other partnering efforts. We also take the feedback and results of developers and use it to help optimize our network and platform roadmaps for developers and partners. David holds a B.S. in Computer Science from Rensselaer and has been in the technology industry for twenty years.

Allen Flanagan manages the CLEAR 4G WiMAX Innovation network program (http://developer.clear.com/innovation), a special program where CLEAR has built out an early access WiMAX network in Silicon Valley with the goal of enabling software developers and technology companies to innovate on WiMAX. He works as part of a focused team of people within Clearwire that deals with WiMAX ecosystem and partner programs. Allen has worked in the High Tech industry for over 15 years in a variety of roles from Enterprise Application development to Technology Channel Marketing. He holds a BS from the US Naval Academy and an MBA from the University of Texas.

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If you plan to attend, please RSVP to LuChang@ieee.org
 
Thanks
 
Alan Weissberger
IEEE ComSocSCV Chairman and Event Organizer