WiMax deal could lead to universal connectivity
CHICAGO - By year-end, the launch of next generation of wireless networks is expected, blanketing initial service areas with a fast Internet signal - accessible to subscribers from homes, streets and traveling vehicles - and capable of giving mundane home appliances a voice.
In this Jetsonian vision of life, which could take several years to arrive fully, a washing machine embedded with a wireless chip would detect a problem and contact the manufacturer even before the homeowner knew something was wrong with the spin cycle.
The wireless breakthrough, known as WiMax, was dreamed up over the past few years and then beset by financial worries. It was revived Wednesday in a sweeping deal between Sprint Nextel Corp. and Clearwire Corp. that also includes some of the biggest names in technology, including Google Inc., Comcast Corp., Intel Corp. and Time Warner Cable Inc.
The presence of marquee supporters signifies the industry view that the new technology eventually will bring together phone calls, Web access, radio and even television, pushing all of this content through one high-speed pipe and making it fully portable.
As analysts see it, a fast signal available everywhere would break down the traditional barriers between devices and content providers and, for example, allow a consumer to watch a TV program on a conventional set, a phone or a laptop computer, either at home or on the go.
This convergence promises to heighten competition between different players, theoretically pitting cable companies against mobile phone operators and Internet service providers for all types of communication and data transmission because each would be able to offer high-speed connectivity for home and mobile phone service, Internet access and video service.
The presence of Google is one clue to the deal's scope. The Internet giant, one of the most aggressive players in the Internet age, already is getting into the mobile phone arena, developing its own software in partnership with other companies.
The new WiMax venture combines Sprint's wireless broadband business with Clearwire in a new company valued at around $14.5 billion, with $3.2 billion invested by Google and the others.
Announcing the WiMax deal, Clearwire Chairman Craig McCaw said, "The power of the mobile Internet, which offers speed and mobility, home and away, on any device or screen, will fundamentally transform the communications landscape in our country."
Chicago is at the center of the action partly because a major WiMax equipment supplier is Schaumburg, Ill.-based Motorola Inc. When Sprint and Clearwire started working together, they made plans to roll out the service first in Chicago as well as Baltimore and Washington, D.C. Sprint continued to conduct a limited trial in Chicago even when funding problems derailed the previous agreement in November.
Sprint executives say the Chicago network will come online by year-end. According to Motorola, the coverage area spans Gary, Ind. to Rockford. A national rollout is in the picture, with the new Clearwire aiming to reach 140 million subscribers by 2010, as long as funding materializes.
The new Sprint-Clearwire deal means "that the service will be available on a wider basis sooner around the rest of the country," said Barry West, Sprint's chief technology officer. "And obviously, having Comcast and the other partners in there means they can start offering services, like home entertainment services, much sooner than if they were building their own network."
Sprint's WiMax network is designed to transmit data at speeds comparable to mid- and high-tier cable broadband - far faster than what's currently available for wireless Web surfing. This means that using the Internet on a WiMax-enabled mobile phone, for example, will be just as speedy as home Internet connections.
It's also a big leap over today's Wi-Fi hotspots, which typically provide laptop users with Internet access in a cafe or airport. Since the coverage will stretch across metropolitan areas, a user would be able to listen to Internet radio in a WiMax-equipped car while speeding down the highway.
"It's all been debugged," Fred Wright, a senior vice president at Motorola who oversees wireless broadband, said of the Chicago network. "Everything all works, so whenever they're ready, we're ready."
The first products likely to use WiMax will be cards that plug into laptops and desktop modems that allow computers to access the network. Soon after, mobile phones, digital cameras and other portable electronic devices will get embedded WiMax chips. In April, Finnish handset manufacturer Nokia unveiled a WiMax-enabled Internet tablet - a handheld surfing device that has a large touchscreen with a slide-out keyboard. This gadget will be available to consumers for around $479.
West, who will be president of the new Clearwire, said mobile phone makers such as Korea's Samsung and China's ZTE will also offer WiMax devices.
Hamilton Sekino, a parter at Diamond Technology & Management Consultants, expects Sprint to initially offer WiMax laptop cards for a monthly access rate between $50 and $60. But the available packages and future pricing for a fuller range of services will take complex negotiation between the Clearwire investors. And there are skeptics who doubt if the WiMax experience will be as fluid, affordable and easy to adopt as the technology companies promise.
As Sekino noted, all of the participants in the venture see WiMax as a major boon to their core businesses. But they're also competitors - Clearwire offers fixed broadband services that rival those of Comcast and Time Warner Cable Inc.
"It will be a challenge to execute on a single vision and even establish a single vision," Sekino said.
The industry expects the consumer migration to WiMax to be gradual, with Sprint continuing to operate its existing cellular networks so customers won't be forced to upgrade their service and phones.