Superfast WiMAX comes to Portland
Posted by jlang January 03, 2009 21:00PM
YouTube atop Mount Tabor? Can do. Videoconference on the MAX? Why not?
But really, why?
Billions of dollars hinge on that question, and Portland residents will help provide the answer.
We're second in the nation to get a taste of an ambitious, unproven, new technology called WiMAX. It beams super-fast Web access from cell phone towers all over the metro area to you, wherever you are.
For a fee -- $20 to $50 a month, depending on speeds and how much you use it -- WiMAX holds the promise that you can go pretty much anywhere and connect to the Internet at rates nearly as fast, or maybe faster, than what many people have at home.
For Web surfers accustomed to choosing between cable or DSL at home, WiMAX promises a cheaper, more versatile option. For mobile access, a WiMAX card in your laptop is considerably faster and a little cheaper than today's speediest cellular connections.
Clearwire, the Seattle-area startup behind the new service, believes an increasingly mobile population already wants more than texts and Twitter. As it expands beyond Portland, Clearwire's outsized ambition aims to leave today's technologies in the dust.
Investors are skeptical, and Clearwire's stock is in the tank. Nonetheless, the company has raised billions to fund its vision -- $3.2 billion last year alone --from big-name technology companies including Sprint, Comcast and Google.
Intel, Oregon's largest private employer, has tossed in $1.6 billion. The chip maker is gambling that WiMAX will increase the demand for mobile technology and, in turn, for new products built with Intel chips. All while the nation's economy is in a historic swoon.
"This is not for the fainthearted," said Sriram Viswanathan, who signed the checks to Clearwire as vice president of Intel's venture capital arm and manager of the company's WiMAX program.
"We take big bets," Viswanathan said. "We're about changing not just the company, but changing the industry. Big things require big risks."
Clearwire is marketing its service under a new brand name, "Clear." You may have seen its door-hangers and billboards around town. Its stores and mall kiosks will soon be everywhere in the Portland area, along with retail displays in big box stores and aggressive online and direct mail advertising.
The scale of the ad campaign reflects Portland's importance to Clearwire. The company hopes to make this a model for WiMAX's potential and whet the appetite of the rest of the nation.
Portland's a key test case for the company, which picked the city in part because of Intel's substantial local presence and in part because of a tech-savvy population with an affinity for the latest gadgets and gear.
Portland has bad memories of new wireless technologies, owing to the city's failed bid at creating a municipal Wi-Fi network with California startup MetroFi. That project imploded last year, leaving abandoned wireless antennas atop streetlights and plenty of hard feelings.
WiMAX technology is much more robust than Wi-Fi, providing powerful wireless signals that stretch for miles instead of a few dozen feet.
"It's really the quality of the network that will give us a leg up," said Ben Wolff, Clearwire's chief executive and a 1994 graduate of Lewis & Clark Law School.
That quality comes with a price. Powerful wireless broadcasts require expensive, federally licensed radio spectrum. That's why WiMAX subscriptions cost money, while Wi-Fi is generally free.
WiMAX isn't just mobile. Clearwire is also marketing its service as a low-cost replacement for your cable or DSL service at home. Clearwire plans to add an option for Internet-based phone service within the next few months, and mobile Internet phones within a few years.
In the long run, though, wireless won't be able to keep up with the ever-faster speeds that expanding fiber-optic networks provide. So mobility is where WiMAX's future lies, and Clearwire's.
WiMAX chips are already turning up in new laptops, eliminating the need for plug-in cards. In time, Clearwire expects WiMAX will be built into cell phones, too, providing a faster option for wireless Internet access and perhaps displacing the established cell phone companies.
Despite its formidable backers and rich pedigree -- Clearwire's founder is Craig McCaw, the Seattle billionaire who helped create the cell phone industry -- the product's launch has been rocky.
Investors, initially enthusiastic about WiMAX prospects, now question whether Clearwire has the technological and financial muscle to take on existing wireless carriers.
Clearwire's stock price has fallen more than 80 percent since it went public in March 2007. The company's Portland launch comes nearly a year behind schedule, delayed as much by the company's complicated business partnerships as by technical issues.
Questions arise
Clearwire faces a crucial question, common to new technologies: Can it absorb its massive development costs long enough to attract the customers who will make the investment profitable? Add to the equation that the new service is hitting an increasingly competitive market during a moribund economy, and that WiMAX technology has yet to prove itself technically.
Web surfers already have a lot of mobile options, from free coffee shop Wi-Fi to subscriptions from cell phone carriers AT&T and Verizon.
While the cellular companies charge about twice as much for much slower connections, they have a few big advantages: Large customer bases, plenty of cell phones that can access their networks, and broad coverage that stretches from coast to coast.
By comparison, Clearwire offers WiMAX in only Portland and Baltimore (though Clearwire serves 45 other cities -- including Bend, Eugene, Klamath Falls and Seattle -- with an older wireless Internet technology.)
Clearwire hopes to make WiMAX available to a quarter of the nation's population by the end of 2009, and nearly half of it by 2011. But it will be years before WiMAX matches cellular's reach.
click to see chart full size
And there aren't any widely available WiMAX phones yet, and only a handful of laptops come with WiMAX built in. Everyone else has to buy (about $50) or rent ($5 a month) a WiMAX card that plugs in to the side of the computer.
Technology worth it
If Clearwire's got a steep climb ahead of it, the company insists its technology makes the trip worth taking. Scott Richardson helped develop WiMAX technology as an Intel vice president in Hillsboro, then left to continue the work with Clearwire.
"I realized that my passion for the technology was greater than my passion for working inside (Intel)," he said.
Now Clearwire's vice president for strategy, Richardson works out of the company's 50-person office on Portland's South Waterfront. Clearwire stands out from the cellular carriers, he said, because it's staked out more hard-to-get, federally licensed radio spectrum. That gives it the capacity to continue increasing speeds, he said.
"As long as the user demands the fastest possible Internet experience on the go, we can be the leader," Richardson said.
People clearly want mobile Web access, said Steve Clement, a research analyst who follows Clearwire for Pacific Crest Securities in Portland.
"The bigger question is how much bandwidth do people need mobily? And if it turns out they need tons and tons, Clearwire is in pretty good shape," Clement said.
However, he added, "There's a real question as to whether there's huge demand for that in a mobile environment."
And Clement said Clearwire has additional challenges: It has to build a network that can compete with the broad cellular footprint. It has to offer a markedly superior product, at a competitive price, to lure customers away from the entrenched cell phone carriers.
The receding economy is sure to slow Clearwire's expansion, he said, by limiting the company's access to cash. Even with the billions Clearwire has raised, the company is burning through hundreds of millions of dollars as it sets up its network and says its funding is only sufficient to last through this year.
"They're going to have to be more prudent in how they use their resources," Clement said.
Clearwire has been testing WiMAX in Portland for several months with Intel employees and select customers. The service has been available online since the beginning of December, but Clearwire's real push begins with a formal launch Tuesday.
Already on board is Sam Churchill, a Portland telecom enthusiast who edits a Web site called dailywireless.org. He signed up for the home version of Clearwire's service at the beginning of December.
"I like it fine," he said. "I haven't had any problems with it. It's been working well from Day One."
Though Churchill is a techie, he said the setup would be easy for anyone -- simply load the software and plug the antenna in to the computer.
With a WiMAX antenna perched in a windowsill in his Northwest Portland apartment, Churchill said his downloads consistently measure 3 megabits per second, roughly equal to a DSL connection and almost precisely what Clearwire promised.
Connections could slow up as more users join the network, Churchill said, but his early impressions are quite favorable.
"It'll be very interesting over the next few years to see how this plays against cellular," he said. "I think they've got something here."
-- Mike Rogoway;
mikerogoway@news.oregonian.com
WiMAX by the numbers
• $1.6 billion has been invested in Clearwire by Intel
• 80% is Clearwire's share price decline since going public in March 2007
• 5 million U.S. residents live in areas with Clearwire WiMAX today
• 140 million U.S. residents live in areas Clearwire plans to serve by 2011
Sources: Clearwire, company regulatory filings
The players
• Craig McCaw & Clearwire: The Seattle billionaire started Clearwire to remake a wireless industry he helped create. Clearwire hopes WiMAX eventually will displace cell phone data networks operated by AT&T and Verizon. But its start has been complicated by technological delays and complicated business relationships. Its share price is off more than 80 percent since going public in March 2007.
• Intel: The world's largest chip maker has invested $1.6 billion in Clearwire, hoping to open a new path to the Internet and create new markets for its chips. Intel helped midwife WiMAX technology, and much of the testing for the new standard was done in Washington County. Intel has a terrible track record making money on communications hardware, though.
• Comcast and other cable companies: Other than Verizon, few companies offer both mobile Internet access and high-speed Internet connections in the home. Comcast invested $1 billion in Clearwire, and other cable operators put in $650 million more, in hopes of offering customers a mobile option in the future.
What it costs
• CLEAR
Home Internet access: Download speeds from 768 kilobits per second to 6 megabits per second: $20 to $50 a month, depending on speed, plus $5 a month for WiMAX modem. Later this year, Clearwire plans to offer Internet home phone service for $25 a month, plus $15 for a phone adapter.
Mobile Internet access: Downloads at 4 mbps: $30 to $50 a month, depending on how much data you use, plus $50 for mobile WiMAX modem.
• ALTERNATIVES
Home Internet access: Comcast, Qwest and Verizon offer home Internet access at download speeds from 1 mbps to 100 mbps, for $30 to $145 a month, depending on speed. Mobile Internet access: Cricket Wireless, Sprint, Verizon and AT&T offer wireless Internet cards for laptops. Access typically costs $40 to $60 a month, plus $30 or more for a wireless card. Downloads are typically around 1 mbps.
Note: Companies may assess additional activation fees, taxes or other charges
Source: Company Web sites, The Oregonian research
http://www.oregonlive.com/business/i..._to_portl.html
Linear Mode
