WASHINGTON-Craig McCaw, who made a fortune in the cellular industry before stumbling in satellite and local telephone ventures, last week unveiled plans to leverage wireless technology to compete against dominant telephone and cable TV companies in the lucrative high-speed Internet market.
McCaw will pursue his broadband wireless vision as chairman of Clearwire Corp., a new firm based in Kirkland, Wash., which controls key spectrum and technology assets as a result of strategic investments and acquisitions in recent years.
McCaw’s Clearwire play gives wireless broadband legitimacy and bolsters the stature of the emerging business in the eyes of Wall Street, an incalculable benefit that comes at a time when regional Bell telephone companies and cable TV operators are scrambling to sign up residential and business broadband customers. It also possibly gives McCaw a first-to-market path to the emerging WiMax technology.
“We come into this opportunity with our eyes open to the challenges and difficulties associated with competing against giants in the communications arena,” said McCaw, who delivered the keynote address at the Wireless Communications Association International conference last Wednesday.
Clearwire plans to launch service this summer in Jacksonville, Fla., and St. Cloud, Minn., where technical trials are being conducted.
While McCaw has put Clearwire in position to compete against DSL and cable broadband on a national scale, his ambition-perhaps tempered by bad experiences with XO Communications Inc., Teledesic L.L.C. and ICO Global Communications-appears somewhat restrained. But the strategy, though cautious and measured, has the potential to evolve into something big and disruptive.
“We very modestly are going forward, respectful of the littered wasteland of bankrupt companies in telecom,” said McCaw.
McCaw said broadband access should be simple and cheap, a plug-and-play formula that will be tested in a market where bundling local, long distance, video and high-speed Internet services under powerful brands is becoming the norm.
In the wireless space, mobile-phone carriers offer Internet access at speeds faster than dial-up, but far slower than DSL and cable. Verizon Wireless in the coming months plans to expand its high-speed data-only service, currently available only in a couple of markets for $80 a month.
Clearwire intends to make its mark by undercutting the price of DSL and cable broadband, while simplifying installation, bolstering security and improving customer service.
“We have worked diligently to combine a team of people that have a track record for providing exceptional customer experiences in wireless that we believe can make a difference with a unique and powerful technology,” said McCaw. “Wireless technology can open the gate that has restricted widespread access to broadband services and provide a very simple and satisfying consumer experience.”
Indeed, McCaw said he believes Clearwire offers a broadband wireless solution that will be appealing to developed and developing countries alike.
Last week’s public appearance by the shy, soft-spoken McCaw was made possible as a result of stealth business and regulatory dealings during the past few years.
McCaw now has the key pieces in place for this newest venture, all overseen by a management team comprised of trusted business associates who have worked with him in past enterprises.
He gained access to significant spectrum in the 2.5 GHz band through the purchase of Arlington, Texas-based Clearwire Technologies Inc. and secured valuable technology by buying NextNet Wireless Inc. of Minneapolis. The dollar value of the two deals have not been made public, but one report said McCaw-who struck gold after selling his cellular company to AT&T Corp. for $11.4 billion in 1994-might have paid $80 million for NextNet.
NextNet is a leading provider of non-line-of-sight, plug-and-play broadband wireless access gear. The company’s technology has been commercially deployed for more than two years and is installed in 20 markets around the world, including the United States, Mexico, Canada, Asia, Africa and the Caribbean.
The new Clearwire said it will use NextNet’s Orthogonal Frequency Division Multiplexing technology, modified with its own proprietary technology, to power its IP-based wireless network.
