Sprint-Clearwire Rides Again, LTE Makes Inroads

West isn’t worried about the big dumb pipe specter, however, pointing to the fact that only the network provider can offer QoS. "If someone wants to download Skype, they can certainly do that,” said West. “As the network gets busy, it would have to be higher up on the QoS stack because those bits need priority over streaming videos and downloaded content. And if you want to access those higher QoS levels, you will need to pay more as a development."

That's one way to hang on to the value prop. Clearwire is planning to release APIs for developers to gain access to the creation of such services.

There’s also the information operators can access. "The mobile provider has the intelligence of the customer location, presence and usage patterns — and can leverage that information for personalization and targeted advertising," noted Locklear.

And, the operator’s ability to integrate services is another benefit.

“We’re talking about two- and three-screen contiguous and seamless communications,” said Wolff, who was also CEO at the pre-JV Clearwire, the only other major 2.5GHz spectrum holder besides Sprint, and a company known for offering DSL and cable modem services with fixed WiMAX. “We're all about simplifying and creating a less confusing experience for consumers, and that’s fairly unique. Other companies offer wireline and wireless — but over diverse networks. This is the idea of having a single IP network.”

That’s an attractive prospect for the other service providers involved in the deal. In addition to investing in the new Clearwire, Bright House Networks, Comcast and Time Warner all will have MVNO deals for 3G and WiMAX from Sprint and Clearwire, respectively (who also will have reciprocal MVNO services with one another). Besides giving the cablecos a powerful quad-play strategy, the arrangement also has the added benefit of instant scale — in theory.

"When you build a network, it's important to load it quickly," said West. "The first customer is a very expensive one. Sprint has 50 million subs to upsell, and now we can combine the customer base of the cablecos, so we can load up the network quickly, and that impacts the viability of the business."

While the concepts of employing WiMAX to deliver a wider array of services and applications sounds great, WiMAX's fortunes clearly have been on a roller coaster ride in the United States. First, there was the hype, an almost inevitable occurrence with promising new technologies in the communications industry. The industry then began working on standards, which gelled relatively quickly. Then the problems began.

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