Re: Clearwire Funding Gap May Put Backers' Plans on Hold

[David Farber <dave () farber net>]

Begin forwarded message:

From: Brett Glass <brett () lariat net>
Date: February 12, 2009 10:16:28 AM EST
To: dave () farber net, "ip" <ip () v2 listbox com>
Subject: Re: [IP] Clearwire Funding Gap May Put Backers' Plans on Hold


> Clearwire Corp. may have to delay its network
> expansion if it fails to close a funding gap of about $2 billion,
> dealing a setback to investors such as Intel Corp. and Google Inc.
> that want to break the phone companies' dominance of wireless  
> Internet.

Dave, and everyone:

It's ironic that Clearwire, already on the ropes financially after a
vast round of new funding, is claiming that the telephone companies
dominate wireless Internet. In fact, there is vibrant competition
in that area. As explained at

http://bennett.com/blog/2009/02/thought-you-had-no-alternatives-for-broadband/

the United States' more than 4,000 WISPs are already accomplishing what
Clearwire is failing to do, even though most are self-financed and
lack access to public capital markets.

This is because the problem with Clearwire isn't just a lack of capital;
its business model simply does not add up.

WISPs, on the other hand, work. (Mine, which seems to have been the  
first,
has worked for 16 years.) In fact, were government regulations not  
stacked
against them (the biggest problem being spectrum policy; there is no  
spectrum
allocated to this service, even though it is the most effective way of
deploying broadband to unserved and underserved areas), WISPs would  
already
be the "third pipe" everywhere in the country.

As it stands, though, WISPs already cover somewhere between 2 and 3  
million
square miles (see the link above for a map that shows the coverage  
areas of
about 1/3 of all WISPs; information is still being gathered from the  
rest)
with service that's competitive both with the telephone and cable  
companies
and with Clearwire. And because they are local businesses, WISPs offer
superior service and support.

My takeaway: it's very likely that the new Clearwire, despite billions  
in
investment from large corporations and a vast pool of licensed spectrum,
will implode just like the "old" Clearwire did. Why? Because its  
business
model simply doesn't work. But WISPs will soldier on... and if given  
even
a few small breaks by government will accomplish one by one, on the  
local
level, what Clearwire will fail to do on the national level.

In other words, as I seem to be saying again and again of late: "The  
third
pipe is local."

--Brett Glass





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