Clearwire Still Sees Challenges After FCC OK

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The head of WiMax operator Clearwire said its work is just beginning after the U.S. Federal Communications Commission's approval Tuesday of the company's joint venture with Sprint Nextel.

The FCC voted on Tuesday to allow Clearwire and Sprint to form New Clearwire, a service provider that will combine the frequencies held by both entities and eventually build a national mobile broadband network. The commissioners pushed aside objections by AT&T that the deal would hurt competition by putting too much spectrum in the hands of one entity.

"To have the commission act as quickly as they did ... we're very gratified by that," said Benjamin Wolff, CEO of Clearwire, at the Wireless Communications Association International (WCAI) conference in San Jose, California. He was interviewed by WCAI President and CEO Fred Campbell.

But the two carriers still only have one commercially available mobile WiMax network between them, in Baltimore, and the national infrastructure will have to be built from scratch in a harsh economic environment.

"I think the challenges are just beginning, to be candid," Wolff said. He cited the logistics of deploying as many as 37,000 cells, making sure technology from several infrastructure providers works together and working with device manufacturers to design products that are easy for consumers to use. Unlike cell phones, those will be sold by retailers, with no carrier subsidy.

"This is going up against all the traditional paradigms associated with the wireless business, so it is no small task," Wolff said.

But he said he wouldn't trade his own position with those of mobile giants Verizon Wireless and AT&T Mobility. The main reason is New Clearwire's spectrum holdings, which he said include more than 100MHz in many markets and more than 150MHz in some. That compares with chunks of only about 25MHz acquired by Verizon and AT&T in various markets through this year's auction of 700MHz frequencies, he said.

Wide swaths of radio frequencies make it possible to provide high speeds to more customers more economically, Wolff said. One element he didn't mention was that the 700MHz spectrum, which in the past has been used for TV, travels farther and penetrates walls better than the 2.5GHz frequencies New Clearwire holds.

In addition, neither Wolff nor Campbell brought up New Clearwire's potential challenges in the current market in getting financing for its buildout, which some analysts believe will be a significant barrier to its success.

The company has all the spectrum it needs and has no plans to try to get more, Wolff said. Clearwire has said the joint venture should have service in the top 100 markets in the U.S. by the end of 2010.

There are more than 480 client devices for mobile WiMax under development, and there should be about 100 certified by the WiMax Forum by the end of this year, Wolff said. Any certified WiMax device will be allowed on New Clearwire's network, he said.

Before Wolff's appearance, Campbell laid out the group's vision for a National Wireless Broadband Strategy. It called on policy makers to minimize the barriers to deployment of wireless broadband, including zoning laws, taxes and coordination of radio frequencies. In addition, radio-frequency resources should be maximized for wireless broadband, which requires large chunks of spectrum, Campbell said. The strategy also calls for universal-service programs, which today are aimed at subsidizing wireline phone service for the poor and rural residents, to help support deployment of wireless broadband for those populations.

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